Government announces new agreement to ensure continued supplies of CO2

The Government has reached an agreement with the CO2 industry to ensure continuing supplies to UK businesses, including those in the food processing sector.

CO2 suppliers have agreed to pay CF Fertilisers a price for the CO2 it produces that will enable it to continue operating while global gas prices remain high, drawing on support from industry and delivering value for money for the taxpayer, the Government said.

Two plants, owned by CF Industries, produce 60% of the UK’s CO2 and the shut down in September, caused by soaring gas prices, threatened to cause havoc in the pork supply chain, compounding the already dire situation caused by staff shortages. CO2 is used to stun pigs in most large abattoirs. 

After days of uncertainty in September, Business Secretary Kwasi Kwarteng announced he had reached a deal with CF Industries, involving tens of millions of pounds of taxpayer-funded support for three weeks, to get the plants up and running again. The announcement came just days before some major UK pork plants were due to run out.

BMPA chief executive Nick Allen described the deal as as a ‘huge short-term relief’. But, commenting in early October, he told Pig World that we were still ‘not out of the woods yet’.

But an agreement has now been reached in a rare piece of good news for the pig sector at this time. This price for CO2 reflects the vital importance of this material to everything from our nuclear industry to hospitals to the food and beverage industry, the Government said.

Mr Kwarteng said: “Today’s agreement means that critical industries can have confidence in their supplies of CO2 over the coming months without further taxpayer support.

“The Government acted quickly to provide CF Fertilisers with the support it needed to kick-start production, and give us enough breathing space to agree a longer-term, more sustainable solution.

“I would like to thank all the parties involved in this agreement who have recognised the importance of avoiding supply disruptions and delivering for UK businesses and consumers.”

 

Defra Secretary George Eustice said: “CO2 is vital for our food and drink sectors. The Government has taken decisive action in these exceptional circumstances to allow a deal to be reached which will continue the supply of CO2 to businesses – including thousands of food and drink businesses – up and down the country.”

 

Last week, Mr Kwarteng temporarily exempted parts of the CO2 industry from competition law to facilitate this agreement and provide further security of CO2 supplies to UK businesses.

 

In addition, major commercial CO2 producer Ensus reopened its Wilton plant last week following temporary closure for planned maintenance, further securing supplies. The Wilton plant can produce up to 40 per cent of the UK’s CO2 requirements.

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About The Author

Editor of LBM titles Pig World and Farm Business and group editor of Agronomist and Arable Farmer. National Pig Association's webmaster. Previously political editor at Farmers Guardian for many years and also worked Farmers Weekly. Occasional farming media pundit. Brought up on a Leicestershire farm, now work from a shed in the garden in Oxfordshire. Big fan of Leicester City and Leicester Tigers. Occasional cricketer.