Food and drink industry warns CO2 shortage could impact supply as temporary deal nears end

The food and drink industry has raised concerns the UK could face a potential CO2 shortage, with a government-backed deal supporting the sector due to end this month.

 

CO2 is used in food packaging, fizzy drinks and beer, and to stun animals before slaughter. Food producers have warned that any shortage could lead to issues with the supply of products such as beef, pork and poultry.

 

Last year, CF Industries, which provides 60% of the UK’s food-grade CO2, shut down its two fertiliser plants in Teeside and Cheshire following a sharp rise in global gas prices.

 

The government provided a temporary bailout for the US chemical giant and facilitated a three-month deal for CF Industries to be paid a pre-agreed price to continue production.

 

However, this is due to come to an end after 31 January, and there are fears failure to secure a new deal could lead to another shutdown.

 

When contacted by The Caterer, CF Industries said it was continuing to negotiate with its industrial gas customers “to extend CO2 offtake and pricing agreements”.

 

However, Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA), warned there was a growing threat of disruption to brewers and pubs.

 

“We continue to liaise with suppliers and are urging the government to support those manufacturing processes we depend on for the majority of our CO2,” she said.

 

“The sector urgently needs a longer term solution to avoid further, sudden outages – particularly as energy prices are likely to remain high for some time.

 

“After a devastating winter period for our pubs and brewers these ongoing supply chain disruption adds the burden of additional costs or will seriously hinder our recovery as a sector. However, beer drinkers and pub goers can rest assured there is still plenty of beer to go round.”

 

A spokesperson for the Food and Drink Federation said the security of food-grade CO2 had been a concern “for some time” and could lead to shortages on supermarket shelves.

 

The spokesperson said: “Last year’s government intervention which guaranteed CF Industries production of CO2 until the end of this month was very welcome. But we are concerned that with just days now remaining before that agreement comes to an end, and energy prices still very high, there will be further CO2 shortages once again. This could lead to shortages in the products we find on our supermarket shelves – adding further pressures to families already coping with high food-price inflation.

 

“We will continue to work with the Government on this. It is critical that together we ensure supply can continue and that we build long-term resilience into the production of food-grade CO2.”

 

In 2018, a similar shortage of CO2 led to pubs seeing some beer stocks affected while livestock producers and drinks producers saw their supplies dwindle.

 

However, the Department for Business, Energy and Industrial Strategy (BEIS) said it was not expecting shortages to impact "essential" food production.

 

A spokesperson 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.

 

“We are continuing to work closely with both the hospitality and food and drink industries, and do not expect any significant disruption to essential food supplies.”

 

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