Rising gas prices have forced an ammonia factory in the UK to announce its intention to temporarily halt its activities, which will likely result in further CO2 shortages for the food and drink industry.
The CF Industries plant in Billingham, Teeside, typically produces nearly a third of the UK’s supplies of carbon dioxide, which is a byproduct from its ammonia production.
The company has not yet decided on a date for the temporary shut down and plans to continue using the site to import ammonia to fulfill all current ammonium nitrate and nitric acid contracts for as long as it can.
“At this time, CF Fertilisers UK do not anticipate any impact on employees regarding this announcement given the substantial level of activity that will continue to occur at Billingham”, the company said in a statement.
The eventual pause of CO2 production at the plant is expected to impact farmers, meat processors, bakers, brewers, and soft drinks producers, who all either use the gas to make their goods, or in packaging to keep produce fresh. It is also used in slaughterhouses to stun animals like pigs and chickens.
This isn’t the first time production has had to stop in the last year. Soaring energy prices in autumn led the US-owned company to temporarily close its Billingham site, as well as its fertiliser plant in Cheshire. Together, the two sites are estimated to account for 60% of CO2 supplies for commercial use.
The Cheshire site was permanently closed earlier this summer, which has made many companies more reliant on overseas CO2 suppliers, according to the British Meat Processors Association (BMPA).
The organisation also noted that as Italy and Germany have cut their ammonia production, many European food and drinks companies have been left “scrambling” to source the gas.
Nick Allen, CEO of the BMPA said: “Whilst we are in a much better position now than we were a year ago, if CF Industries follows through on its threat to close Billingham the British meat industry will have serious concerns
“Without sufficient CO2 supplies the UK will potentially face an animal welfare issue with a mounting number of pigs and poultry unable to be sent for processing.
“It’s for this reason that securing CO2 supplies is of key strategic importance and, following this latest development, we can’t see how Government can sit on the side lines and insist that it’s for companies to work it out amongst themselves. They are going to need to step in.”
The Government had been supporting the CO2 industry through a subsidies deal, but this ended in January of this year as the Department for Business, Energy & Industrial Strategy said the the sector must find a new alternative and collaborate to address the issue.
The Government has not yet announced any plans for further support.
A Government spokesperson said: “While the government continues to examine options for the market to improve resilience over the longer term, it is essential industry acts in the interests of the public and business to do everything it can to meet demand.”
Inflation is currently affecting every household and business in the UK. Learn how it is impacting the food industry in this Food Matters Live Podcast episode: