Despite ceasing production, the company plans to harness the site’s ammonia import capability to continue to run its ammonium nitrate (AN) and nitric acid upgrade plants.
With the UK relying on CO2 as a by-product of ammonia production, if prolonged, the closure could have a significant impact on the wider food and beverage industry.
Citing high natural gas and carbon prices, CFF UK stated that ammonia production is uneconomical, with natural gas costs at NPB more than twice as high as it was one year ago.
According to the company, marginal costs of ammonia are above £2,000 per tonne while global ammonia prices remain at about half that level.
The news comes just over two months after CFF revealed that it will permanently close its Ince manufacturing facility near Chester.
Anticipating higher costs, CFF announced that it intended to fulfil the current domestic demand for AN by limiting its production to the Billingham facility, which the company deemed ‘best positioned’ for the longer term.
The closure followed a lengthy halt in operations (since September 2021) caused by rising global gas prices, resulting in a restructuring operation that has seen the loss of around 350 jobs.
At its Billingham complex, CFF UK has stated that it will fulfil all ammonia and nitric acid contracts, in addition to all orders of AN contracted for delivery in the coming months.
After notifying customers who purchase CO2 on a contract basis, the company will cease production of both CO2 and ammonia until the plant is restarted.
Assuring that it anticipates no impact on employees, CFF UK revealed that it has not yet determined the exact date when it will begin the temporary shutdown, nor for how long the plant will be closed.
gasworld has reached out to CO2 suppliers and wider industry for further comment.
CFF UK’s announcement comes during a spate of plant closures in the US, resulting in a widespread CO2 shortage and increasing concerns over a strained supply chain.
Read more: US CO2 shortage