UK set for another carbon dioxide shortage as fertiliser plant halts production again

The UK could be set for another carbon dioxide shortage after one of the UK’s main producers terminated production due to high energy costs.

US outfit CF Fertilisers announced earlier today they are halting production of ammonia at their Teesside factory – instead importing the gas from the States.

Carbon dioxide is produced as a by-product of ammonia production, and CF Fertilisers are one of the UK’s key suppliers.

The business department fears that alternative CO2 supplies will only meet fifty to sixty per cent of UK demand.

CO2 is used in the production of everything from medical kit to craft beer.

Last year, CF Fertilisers received a short-term bailout from the UK government to continue the production of ammonia despite high energy costs. So-called ‘food grade’ CO2 is used to carbonate water and alcoholic drinks, dispense beer in pubs, to ‘stun’ animals before slaughter and crucially to keep food cool during shipping.

The carbon dioxide shortage prompted fears of empty shelves in supermarkets and pubs being unable to serve pints.

City PM understands that the government is confident there will be sufficient CO2 to cover critical national infrastructure demand, such as that required for the running of nuclear power plants and the medical supply chain, but that other users including drink manufacturers may experience some shortages.

This evening Emma McClarkin, Chief Executive of the British Beer and Pub Association, said “the timing of this news couldn’t be worse” amid worries over inflation and energy costs.

“This news raises serious concerns for the sustainable supply of Co2 to the brewing and pub industry,” she said.

“A guaranteed supply is essential for operations across pub and brewing businesses and this announcement comes at a time when they are already facing extreme cost rising that are threatening businesses and people’s livelihoods across the country. We urge the Government to urgently convene stakeholders to ensure there is a reliable supply of Co2 to our industry and others that depend on it.”

CF Fertilisers confirmed to City A.M. that ammonium nitrate and nitric acid production will continue at the site using ammonia imports from its global production network.

It has also said they will be able to fulfil all orders.

However, the National Farmers Union has raised concerns about availability of ammonia following the announcement.

NFU 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.

“We are engaging with businesses across the food and drinks industry to understand any potential impacts”.