UK food and drink firms warn of shortages as ‘bailout’ of CO2 industry ends
UK food producers and brewers have warned of shortages of meat, beer and fizzy drinks, as well as higher prices, after the government opted not to renew support for the carbon dioxide industry.
Meat processors, brewers, bakers and soft drink producers all use CO2 in making and packaging their goods. It is also required for the humane slaughter of animals including pigs and chickens.
The Department for Business, Energy and Industrial Strategy (BEIS) said last autumn it had brokered a deal between businesses in the CO2 sector, to ensure supplies of the gas to the food and drink industry, as well as hospitals and nuclear power plants.
It came after the government was forced to use taxpayer money to fund a short-term bailout for CF Industries, which accounts for 60% of the UK’s CO2 supplies, to prop up the company and stave off supply chain chaos.
CF Fertilisers, which is owned by a private firm in the US, had halted production at two of its plants, Billingham on Teesside and Ince in Cheshire, as a result of rocketing prices of gas required to power its operations.
However, the three-month deal came to an end on 31 January, and BEIS said it was now up to the CO2 industry to work together.
A spokesperson from the department said: “We welcome industry’s agreement in October to ensure CF Fertilisers on Teesside can continue to operate even during the current period of high global gas prices. It is for the CO2 industry to ensure supplies to UK businesses.”
During the three-month deal, customers of CF Fertilisers had agreed to pay a set price for CO2 until at least the end of January.
The deal was intended to give the industry time to develop alternative sources of food-grade CO2. The Guardian understands that while some extra production
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