The UK has averted a severe carbon dioxide shortage affecting sectors from health to food, after CF Industries, a US producer of fertilizers, and industrial gas companies agreed to keep production until in January of next year.
Soaring natural gas prices have forced fertilizer factories to shut down, leading the government to provide around £ 30million in temporary support last month to CF Industries, a US fertilizer producer that shut down production from its British factories, citing higher energy costs.
CO2 is a byproduct of fertilizer production, and CF Industries has said it will operate its Billingham plant in Teesside until at least January. CO2 is used to make sparkling drinks, stun animals for slaughter and cool nuclear power plants.
Richard Griffiths, managing director of the British Poultry Council, welcomed the deal to ensure the Billingham plant continues to produce CO2, but said it would only provide “a bit of a break”.
He said in the longer term, the food industry should consider producing CO2 itself, potentially with government support.
It was still unclear how much the cost of CO2 would increase as a result of Monday’s deal. However, the price was not the issue, several meat producers said. “It’s the availability that is important,” Griffiths said.
The decision to halt production last month at CF Industries factories, which supply 45% of the UK’s CO2, has sparked chaos for the food industry. Government support for CF Industries is expected to end on Tuesday, raising fears of a further surge in CO2 prices.
Tony Will, Managing Director of CF Industries, said: “We are delighted to have found a commercial solution that allows the Billingham complex to continue operating until January.