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Highlights
- The Carbon dioxide industry and the UK government struck a supply deal on Monday to ensure uninterrupted CO2 supply.
- Businesses can now get CO2 supply at a fixed price until at least January next year.
- US-owned CF Fertilisers, which produces 60 per cent of UK’s carbon dioxide, temporarily closed recently due to UK’s rising gas prices.
The British carbon dioxide sector struck a deal with the government to avoid carbon dioxide (CO2) shortages amid sky rocketing gas prices.
The deal will allow businesses across various sectors, including food processing, to have an uninterrupted supply of CO2 up to January 2022.
CO2 is a critical component used across beer manufacturing, animal slaughter, dry ice production, nuclear industry, hospitals and other industries.
Carbon dioxide supply deal
US-owned carbon dioxide firm CF Fertilisers (CFF) produces around 60 per cent of carbon dioxide in the UK.
However, the company temporarily shut down its two plants, Billingham on Teesside and Ince in Cheshire, located in the north of England, in September, due to soaring gas prices.
The government had bailed out CFF in September as a temporary measure, the Department of Business, Energy and Industrial Strategy (BEIS) was involved as a broker in a longer-term agreement between CFF and its consumers to ensure smooth supply to critical industries.
As per the deal, consumers will have to pay a fixed price for CO2 until at least January of next year. No price details or any additional specifics of the deal were disclosed to the public.
The UK has been facing a worsening gas crisis due to several factors, such as rising global demand, low reserves, low supply from Russia and more, which led to wholesale natural gas prices quadruple since 2020.
The crisis has caused several energy suppliers to go bust and has also started to impact industries in other sectors.
Another major CO2 producer Ensus reopened its Wilton plant last week after it was temporarily closed. The Wilton plant provides up to 40 per cent of UK’s carbon dioxide needs.
Other industries seek government support
The CO2 supply deal comes as other industries have called for a bailout to protect from natural gas price shocks to their businesses as well.
The supermarkets reported lower food inventory levels, and farmers expect around 100,000 pigs to be culled as slaughterhouses would be unable to process animals amid a CO2 shortage.
Steel manufacturing, paper, ceramics and other energy intensive industries have warned that they might have to stop production within days.
