Why might there be CO2 shortages? UK carbon dioxide supply crisis explained as private sector deal ends

There have been warnings that the UK could be on the verge of another food and drink supply crisis

Why is the UK facing a CO2 supply crisis and what could it mean? (images: Getty Images)

Warnings of potential food and drink shortages made headlines again after an agreement guaranteeing CO2 supplies expired on Monday (January 31st).

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But how did we get here – and what might happen next?

Here’s what you need to know.

Why is CO2 important?

Although it is the gas that has contributed the most to accelerating climate change, CO2 is also very useful to humans.

Not only does it give carbonated and alcoholic beverages their fizz, but it also stuns animals for humane slaughter, extends the shelf life of food products, facilitates surgery and cools nuclear power plants.

CO2 is essential for the meat slaughtering process and extends the shelf life of food (Image: Getty Images)

Without CO2, our food industry and our energy supply would be paralyzed.

What put the CO2 supply in doubt?

The CO2 supply crisis first emerged in September 2021 when US manufacturer CF Fertilizers announced it would have to close its two UK factories due to high natural gas prices.

Fertilizer production creates CO2 as a by-product, and CA alone is responsible for around 60% of UK food grade carbon dioxide production.

But it is an energy-intensive process.

The UK is heavily dependent on fertilizer maker CF for its CO2 supply (Image: Getty Images)

There has been a global crunch in gas and energy supplies over the past 12 months, pushing prices to record highs.

Reasons for this compression include:

  • A cold winter in Europe last year meant that more gas than usual was used and supplies were eaten up in
  • A largely calm summer in 2021 meant that we depended on gas for our energy, rather than wind power. This meant that it became difficult to replenish depleted gas supplies
  • Demand from China has increased dramatically as the country seeks to revive its economy after Covid-19

The United Kingdom, on the other hand, is one of the largest gas users in Europe, but at the same time has less storage capacity than many other European states.

Following warnings in September that the closure of CF could lead to food shortages from key industry bodies, such as the Food and Drink Federation (FDF), the British Poultry Council (BPC) and the British Meat Processors Association (BMPA), the government stepped in.

Business Secretary Kwasi Kwarteng led a government intervention to end a CO2 supply crisis in the fall of 2021 (Image: Getty Images)

It signed a short-term agreement to subsidize the reopening and operating costs of one of CF’s factories.

This deal was followed in October 2021 by a CO2 industry agreement to buy carbon dioxide from CF at a specified price (which has not been made public) to ensure it can stay open.

It was this agreement that ended on January 31.

What could happen now that the CO2 agreement is over?

CF Fertilizers has not said what the expiration of its agreement with industry CO2 wholesalers means for carbon dioxide production.

The government has hinted it won’t pull out its checkbook for another industry bailout, telling NationalWorld: ‘It’s up to the CO2 industry to secure supplies for UK businesses.’

The World Cup race in England and hot weather led to a CO2 supply crisis in 2018 which led to food and drink shortages (Image: AFP/Getty Images)

Indeed, the Department for Business, Energy and Industrial Strategy (BEIS) believes that the causes of the September 2021 crisis were unprecedented and that the current situation is not the same.

Indeed, another major CO2 producer – Ensus – has since come back online, additional imports have been purchased and companies with anaerobic digesters have started contributing to the UK’s CO2 supply.

However, the food industry believes another shortage is on the horizon as energy prices remain high, with the FDF again calling on the government to intervene.

“This could lead to shortages of the products we find on our supermarket shelves, adding further pressure on families already facing high food price inflation,” said Kate Halliwell, FDF’s chief science officer.

“We will continue to work with the government on this. It is essential that together we ensure that supply can continue and that we build long-term resilience in the production of food-grade CO2.

The BMPA told NationalWorld that if CF shut down again, the UK would run out of 25% of the CO2 it needs.

This deficit could also increase, he suggested, because there was no guarantee that anaerobic digesters would continue to supply the industry “when prices stabilize or come back down”.

He also said there was a “big unknown” about “how long CF will stay in the UK” due to the high production costs here.

NationalWorld has approached CF for comment.

The long and short of this saga is that the UK faces the very real prospect of food and drink shortages.

And it has already happened.

In the summer of 2018, the World Cup race in England and an unusually long period of hot, dry weather increased demand for carbonated drinks, such as beer, and left the UK short of CO2 at a time when most of the plants that produce the gas were closed for maintenance.

This led to beer taps drying up and production of food products, such as Warburtons crumpets, shutting down or operating at reduced capacity for several weeks.

Although the success of football may not be repeated, there is a good chance that the CO2 crisis will occur.

Additional reports per AP

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