End of CF Fertilisers deal raises CO2 shortage fears

By James 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.

Related news

1 comment

Carbon Dioxide

Posted by Nigel Bowyer,

Much is made of the CO2 shortage but nothing about the current price of fertiliser and the effects the escalating costs will have on food production both in the UK and globally

Report abuse

Post your comment

We will not publish your email address on the website

These comments have not been moderated. You are encouraged to participate with comments that are relevant to our news stories. You should not post comments that are abusive, threatening, defamatory, misleading or invasive of privacy. For the full terms and conditions for commenting see clause 7 of our Terms and Conditions ‘Participating in Online Communities’. These terms may be updated from time to time, so please read them before posting a comment. Any comment that violates these terms may be removed in its entirety as we do not edit comments. If you wish to complain about a comment please use the "REPORT ABUSE" button or contact the editors.

Follow us

Products

View more

Webinars