Carbon dioxide halt piles pressure on UK food, drinks sector

Britain's food and drinks industry on Thursday said the government needed contingency plans to ensure supplies of carbon dioxide after a major producer halted its operations, potentially adding to supply chain problems. Citing high energy costs, CF Fertilisers UK https://www.reuters.com/article/cf-inds-united-kingdom-fertilizers/cf-fertilisers-uk-pauses-ammonia-production-on-high-gas-carbon-prices-idINL4N30031V on Wednesday decided to temporarily halt ammonia production at its Billingham plant in northeast England, which produces CO2 as a byproduct for use in putting the fizz into beer and stunning poultry and pigs before slaughter.

Britain's food and drinks industry on Thursday said the government needed contingency plans to ensure supplies of carbon dioxide after a major producer halted its operations, potentially adding to supply chain problems.

Citing high energy costs, CF Fertilisers UK https://www.reuters.com/article/cf-inds-united-kingdom-fertilizers/cf-fertilisers-uk-pauses-ammonia-production-on-high-gas-carbon-prices-idINL4N30031V on Wednesday decided to temporarily halt ammonia production at its Billingham plant in northeast England, which produces CO2 as a byproduct for use in putting the fizz into beer and stunning poultry and pigs before slaughter. Andrew Opie, director of Food and Sustainability at the British Retail Consortium, said CO2 was essential to the food industry and losing the main domestic source was a concern.

"We have consistently pushed government to ensure a stable supply of CO2 and trust it has contingency plans in place should we lose this supply, but we do not anticipate any immediate problems for retailers," he said. Last October, the industry in Britain https://www.reuters.com/article/power-prices-britain-carbon-idAFL8N2R72YO struck a deal to ensure businesses had a sustainable supply of CO2 during a previous shut down by CF Fertilisers.

Since then, another supplier, Ensus, has reopened its plant in Wilton, northeast England, which had been closed for maintenance, and can supply up to 40% of Britain's CO2 requirements. CF Fertilisers accounts for the bulk of the rest. However, an Ensus spokesperson said that the plant was due to shut for further routine maintenance in September.

The British government said the CO2 market was more resilient than last year when the first shutdowns were caused by already climbing energy costs that have continued to increase since energy exporter Russia invaded Ukraine in February this year. A government spokesperson said there were "additional imports, further production from existing domestic sources and better stockpiles" compared with late last year and that it was also up to industry to act.

"While the government continues to examine options for the market to improve resilience over the longer term, it is essential industry acts in the interests of the public and business to do everything it can to meet demand," the spokesperson said. The pressures on the market are high across Europe.

Last month Italian drinks companies https://www.reuters.com/business/retail-consumer/italian-fizzy-drinks-risk-falling-flat-c02-runs-short-2022-07-27/ warned of a CO2 shortage after some producers cut output. Norway's Yara, one of the world's largest fertiliser makers, said on Thursday it was further curtailing production of ammonia in Europe and Germany's BASF is considering further cuts.

National Farmers Union President Minette Batters said the situation was "extremely worrying" and the industry body was monitoring the impact on the production of fertiliser, for which ammonia is needed, and on CO2. Emma McClarkin, Chief Executive of the British Beer and Pub Association said the latest disruption raised "serious concerns for the sustainable supply of CO2 to the brewing and pub industry".

She said the timing "couldn't be worse" given other strains on supply chains.

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