CO2 industry ensures Christmas supply

The CO2 (carbon dioxide) industry has come to an agreement to ensure UK businesses have access to a sustainable supply of CO2.

The deal will expire in January 2022.

CO2 is used to stun animals prior to slaughter, for meat processing and storage and in the production of beer and fizzy drinks. It is also used in surgical procedures.

The supply issue was prompted by the initial closure of two plants providing over half of the UK’s CO2, exacerbated by the fact that two other plants, one in the UK and one in Norway being closed for maintenance.

One firm, Ensus, has since resumed production and can now satisfy up to 40% of the UK’s CO2 requirements. CF Fertilisers, which produces around 60% of the UK’s commercial CO2 requirements, has also ramped up operations.

From October 2 companies in the UK CO2 industry were granted a temporary exemption from the Competition Act 1998 for the purpose of sharing information and optimising supply.

In the deal announced today, CO2 suppliers have agreed to pay CF Fertilisers a price for the CO2 it produces that will enable it to continue operating while global gas prices remain high, drawing on support from industry.

Today’s deal means that key sectors, including food processing and nuclear power, will be ensured supplies of CO2 until the deal expires.

Business Secretary Kwasi Kwarteng said:
“Today’s agreement means that critical industries can have confidence in their supplies of CO2 over the coming months without further taxpayer support.

“The government acted quickly to provide CF Fertilisers with the support it needed to kick-start production, and give us enough breathing space to agree a longer-term, more sustainable solution.

“I would like to thank all the parties involved in this agreement who have recognised the importance of avoiding supply disruptions and delivering for UK businesses and consumers.”