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Agreement reached to boost CO2 supply to key industries


The government has negotiated an agreement with the carbon dioxide (CO2) industry to ensure that supplies continue to be available.

Rising gas prices forced a major CO2 producer CF Fertilisers to shut down its two factories in the UK last month, stifling supplies used in many industries, including stunning animals for slaughter, extending the shelf life of food, assisting in surgical operations. and cooling of nuclear power plants.

Carbon dioxide is a byproduct of fertilizer manufacturing, and the US company supplies around 60% of the UK‘s needs.

The government stepped in for a three-week period to support the company in a move that is expected to cost “perhaps tens of millions” of pounds, according to Environment Secretary George Eustice.

But now Business Secretary Kwasi Kwarteng has said a “more lasting solution” has been found.

The deal means that until January 2022, those who buy CO2 from CF Fertilizers will pay a fixed price, which will allow the company to continue operating while global gas prices remain high.

And the Department of Business, Energy and Industrial Strategy (BEIS) said it reflects “the vital importance of this material for everything from our nuclear industry to hospitals to the food industry.”

Mr Kwarteng said, “Today’s deal means critical industries can have confidence in their CO2 supplies over the coming months without additional support from taxpayers.

Business Secretary Kwasi Kwarteng at the Conservative Party Conference in Manchester (Stefan Rousseau / PA)

“The government moved quickly to provide CF Fertilizers with the support it needed to start production and to give us enough breathing space to agree on a longer-term, more sustainable solution.

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

Mr Eustice added: “CO2 is vital for our food and beverage sectors. The government has taken decisive action under these exceptional circumstances to enable a deal to be reached that will continue to supply CO2 to businesses – including thousands of agribusinesses – from top to bottom of the country. “

Last week, Mr Kwarteng temporarily exempted parts of the CO2 industry from competition law in order to facilitate the deal and strengthen the security of CO2 supply for UK companies.

Earlier, Mr Eustice had warned that companies would have to accept a sharp increase in CO2 levels, with a possible five-fold increase from £ 200 per tonne to £ 1,000.

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