CFF produces 60% of the UK’s CO2 from its two plants in northern England, which are currently closed due to the rapid rise in natural gas prices.
There are fears the shutdown in production from the plants will lead to a shortage of CO2 for the UK food industry, and gaps on the shelves at supermarkets.
UK Business Secretary Kwasi Kwarteng is in talks with CFF about restarting the plants in Ince, Cheshire, and Billingham, Teesside.
Kwarteng told Sky News, “We’re definitely looking at trying to secure carbon dioxide supply. I’ve spoken to the CEO of the business, Tony Will. He flew over on Sunday. We spoke very candidly about the situation.
“He said the problem he had was that the natural gas price is much higher than the ammonia which he sells. So essentially what happened last week was that the plant downed tools. And I said of course we’ve got to manufacture this CO2. And that’s what we’re talking about this week. It’s pretty imminent. I hope we have a very clear plan to get CO2 production going again. I’m very confident and hopeful that we can sort it out by the end of the week.”
CFF is an indirect subsidiary of US company CF Industries, a manufacturer and distributor of agricultural fertilisers, as well a manufacturer of hydrogen and nitrogen products, with global headquarters in Illinois. CFF announced on 15th September it had halted operations at both its Billingham and Ince manufacturing complexes due to high natural gas prices, with no known date of a restart. The prices for natural gas were higher than the prices for CFF gets for ammonia and CO2, which prompted the shutdown.
Kwarteng has been in negotiations with Tony Will, the global chief executive of CF Industries, since Sunday about solutions for reopening the two plants.
Kwarteng told BBC Radio 4, “We are looking at ways where the production of CO2 is resumed as quickly as possible. If there is support, that will be on a temporary basis. What I’m focused on is getting production up and running and I will look at every solution to get there. It will come at some cost. It may come at some cost. We are still hammering out the details, we are still looking at a plan. If the input price is much higher than the products [ammonia and CO2] there’s an issue there and we need to resolve that. I’m very hopeful we can get some progress.”
CFF produces CO2 as a by-product of fertiliser and the CO2 is then used by suppliers of meat, poultry and fizzy drinks manufacturers. Some companies in the UK food and drinks industry have said they have ten to 15 days left of CO2, according to reports. CO2 is not only used for refrigeration, but also for slaughter of pigs and poultry.
British Soft Drinks Association fears its members may run out of CO2 as manufacturers have “only a few days” of CO2 left in reserve to produce beverages.
The BSDA said in a statement, “Some soft drinks manufacturers have only a few days of CO2 supply left in reserve. As it stands, most CO2 suppliers are currently not scheduling beyond 24 hours in advance, meaning there is no visibility as to UK stocks and no certainty around deliveries. If soft drinks manufacturers cannot get hold of CO2 supplies after their reserves have run out, production of certain products will have to cease.
“The Government must add the wider food and drink sector to the priority CO2 supply list on the grounds of maintaining product supply to consumers and protecting British jobs. We urge the Government to support the operation of UK fertiliser plants through to the end of the year to stop this issue from rearing its head at Christmas.”
Food and drinks companies are calling for subsidies to ensure there are no CO2 shortages.
The BSDA also says it does not know how much CO2 the UK has in reserve.
It added, “Defra [the UK government department Department for Environment, Food and Rural Affairs] and BEIS are the Government departments leading on assessing overall UK stocks, including trying to deduce how much the two fertiliser plants had in reserve when production ceased.”