End of CF Fertilisers deal raises CO2 shortage fears

By Gwen Ridler

- Last updated on GMT

The lack of details surrounding the end of the CF Fertilisers deal has created uncertainty among food firms
The lack of details surrounding the end of the CF Fertilisers deal has created uncertainty among food firms

Related tags co2 gas Meat & Seafood frozen

The end of the Government’s deal with CF Fertilisers to maintain supplies of CO2 gas has created uncertainty among food manufacturers, with concerns of higher prices and sudden shortages.

The Government brokered a deal with the supplier on 11 October to pay a pre-agreed price for the continued production of CO2​ gas at its Billingham plant in Teesside, putting paid to fears of a worse supply shortage than reported in 2018. However, the move left several questions unanswered​.

British Frozen Food Federation (BFFF) chief executive Richard Harrow said there had been no reports of disruptions to CO2​ supplies, but members of the industry had taken steps to ensure they had healthy stocks of the gas.

“We are keeping a close eye on the situation and we encourage the government to take any necessary steps that might be required to keep supplies flowing when the current arrangement with CF Industries comes to an end,”​ said Harrow.

Price pressures until the spring

“The previous shortage was a function of increasing energy prices, and as the outlook is for continued price pressures until the spring, I expect BFFF members will have to endure high CO2​ prices for several more months.”

The British Meat Processors Association (BMPA) raised concerns over the intricacies of the deal, specifically the terms that were agreed between the department for Business, Energy and Industrial Strategy and CF Fertilisers.

“BEIS negotiated the agreement with CF Industries but only they know what the terms are, so we don’t know what agreements are in place for stopping or scaling back production at the end of January,”​ a BMPA spokesman told Food Manufacture.

‘Give us warning’

“BMPA has been lobbying DEFRA​ [the Department for Environment Food and Rural Affairs] to ask BEIS to give the industry some indication about if and when CF may stop production so we’re forewarned and can plan ahead.

Meat processors only deal with the gas wholesalers, so do not possess a full overview of where CO2​ supplies are coming from and what volumes will be available.

“Anecdotally some other suppliers have increased production of CO2​ somewhat, but if CF were to shut down again abruptly, we’d be in the same boat as we were back at the start of the crisis because CF still represents such a large proportion of the UK’s supply (some say up to 60%),”​ the spokesman added.

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