Deal reached to ensure continued supply of carbon dioxide

11 October 2021 by
Deal reached to ensure continued supply of carbon dioxide

The government has reached a deal with a UK carbon dioxide producer to ensure continued supply of the gas, allaying fears of shortages further impacting food and drink production.

Increased costs had seen CF Fertilisers, which provides 60% of the UK's food-grade carbon dioxide, stop production at its two plants in Teesside and Cheshire, prompting fears of Christmas meat shortages.

However the Department for Business, Energy and Industrial Strategy (BEIS) has announced a deal that will ensure continued production of the gas.

In a statement, BEIS said: "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.

"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 deal will continue until January 2022.

Ian Wright, chief executive of the Food and Drink Federation, said: "UK food and drink will be relieved by the announcement of a deal which guarantees that CF Industries will continue to produce CO2 until at least January 2022. This should ensure a consistent supply through the vital food and drink production period in the run up to Christmas. Although welcome news, the increased cost of buying CO2 is yet another burden on the food and drink industry which is already facing enormous stresses. This will of course add more pressure on prices for shoppers and diners."

Environment 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."

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