Carbon dioxide shortage: No taxpayer bailout forthcoming this time

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Carbon dioxide shortage could threaten drink manufactruers
Pubs and breweries have faced pressure amid soaring costs.

THERE will be no repeat of a taxpayer-backed financial package to tackle the country’s coming carbon dioxide shortage, City PM understands.

Ammonia producer CF Fertilisers yesterday announced it would be halting production of the fertiliser at its Teesside plant due to too-high energy costs.

Carbon dioxide is produced as a by-product of that process and CF’s decision to shut has created doubts about the UK’s supply of the gas, used in everything from medical supplies to dispensing beer in pubs.

Today government sources suggested there would be no financial package to encourage CF to restart production, as occurred last autumn in similar circumstances.

Government sources estimate other sources will only provide around 50 to 60 per cent of UK demand. British Beer and Pub Association boss Emma McClarkin told City PM it was imperative a solution was found with pubs already facing rising costs.

The carbon dioxide shortage is expected to affect drinks manufacturers and supermarkets too.

CF Fertilisers have been clear that they will still be able to meet all fertiliser orders.

FU President Minette Batters told City A.M.: “This move by CF Fertilisers to temporarily suspend ammonia production, which is one of the key ingredients to produce fertiliser, is extremely worrying and is a sign of the pressure the fertiliser and energy markets are under.

“We will be monitoring any impact this decision has on the immediate fertiliser market and we will be meeting with CF Fertilisers to understand what this suspension means for future fertiliser orders and how long this temporary halting of production is anticipated to last for.”

A Government spokesperson said “we are aware that CF Fertilisers has taken the decision to temporarily halt ammonia production Billingham. Since last autumn, the CO2 market’s resilience has improved, with additional imports, further production from existing domestic sources and better stockpiles.

“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.