With the news that the UK Government is set to support US-owned fertiliser giant CF Industries with the operation of its Billingham plant on Teesside – reportedly at a cost of tens of millions of pounds – the end appears nigh for carbon dioxide (CO2) shortages that, if speculative headlines were to be believed, had the potential to ‘cancel Christmas’.
Stories began to emerge and quickly gather pace less than a week ago, when soaring natural gas prices – up 250% since January – forced the hand of CF Industries and the closure of both its Ince (Cheshire) and Billingham fertiliser plants were announced on 16th September.
Against the backdrop of record-high gas prices, margins in ammonia production were squeezed and it became an uncompetitive landscape in fertiliser production. So dire was the situation, CF Industries could give no estimated timeline for operations to resume.
The following day, Yara International announced it was curtailing ammonia production at a number of its European sites, including a plant in Hull. gasworld’s prior understanding that Fertiberia, the Spanish fertiliser heavyweight, would be curtailing operations at some of its production sites, was then also confirmed and as the weekend unfolded, it became clear that another plant in the Ukraine was also to close.
Cue a flurry of headlines and fervent interest in CO2 markets once again…
In the last 24 hours it emerged that the UK Government was looking to stem the looming crisis, with various meetings held, the arrival of CF Industries Chief Executive Tony Wills into the UK, and confirmation yesterday (Tuesday) that the company would be helped with the full operating costs to run its Teesside plant for the coming weeks.
It will see production of ammonia – and therefore carbon dioxide – resume at this key plant in the UK and could potentially mark the shortest of CO2 crises we’ve yet seen.
So what have we learned?
CO2’s invaluable role
The overriding message is surely of how important the CO2 supply chain is to so many other critical sectors – and the growing awareness to that. Major headlines were being written far quicker than three years ago, when an actual CO2 crisis had gripped Europe and Mexico, for example. There’s greater understanding now of the role that CO2 plays in so many end-user markets – not least the food and beverages business.
Three years ago it was the threat of beer being on the line, during a World Cup year no less, that appeared to send shockwaves through the public and mainstream media conscious of CO2. Food concerns also existed then of course, but it was very much billed by the media as a storm in a pint glass – a pint glass that was suddenly half-empty.
This time around it’s been that concern that ‘Christmas is cancelled’ and the poultry sector is under threat, with suggestions of less than two week’s supply of CO2 on hand and bare supermarket shelves just around the corner. The significance of CO2 in chilling food products and even the role of modified atmosphere packaging (MAP) has also been highlighted.
The need for biogenic sources
What we’ve arguably also seen emphasised in the last week is the need for greater investment in biogenic CO2, derived from biomass/biogas operations for example.
This is potentially one of the most promising routes for additional – though incremental – CO2 sourcing, when considered against the backdrop of an inflection point in our wider decarbonisation efforts. If we are to truly move towards a more sustainable energy sector, with a diversified structure comprised of hydrogen, carbon capture, storage and utilisation (CCUS), biogas and more, then surely we need to maximise the opportunities those new markets provide in by-products and offtake gases?
If biogenic CO2 can be generated from biogas or biomethane projects, then surely we have to put our shoulder behind that and leverage every stream of that new nuance. It’s a win-win proposition: increased renewable energy contribution, and increased CO2 supply for those critical consumer industries like food and beverages. The last week reinforces that supposition, when questions have been raised about the security and strategy of national supply chains.
Perhaps this latest ‘crisis’ will also go some way to overcoming the perception challenge with biogenic CO2, defined as CO2 released as a result of the combustion or decomposition of organic material, or biomass, from sectors such as landfills, manure management processes, and feedstock manufacture.
Christopher Carson, Founder and Principal Director at Carbonic Solutions, acknowledged the perceptions associated with such sourcing channels during a gasworld webinar last month (August) and described the hesitancy expressed towards new sources by one of the company’s biggest off-takers – the carbonated soft drink industry. He said, “Those players are very cautious with new sources of CO2, and they want to watch and see before they start using CO2 from sources that aren’t proven.”
“Although it’s been around for four to five years, it’s still seen as new into the industry and unproven from their standpoint.”
As the infrastructure around CO2 sources from biogas increases, Carson believes the market will become more accepting, providing the right testing is undertaken and the right quality systems are put in place within the plants. Could the sheer factor of need also play a part in this acceptance going forward? Necessity is the mother of invention, as the old adage goes; perhaps it may be the catalyst for acceptance too.
After all, in Carson’s own words, “There’s no reason why biogenic biogas sources can’t play a really important role in the future and increasing our CO2 production capacity all the way across the globe.”