Government strikes deal with C02 supplier amid national shortage

Government strikes deal with C02 supplier amid national shortage

The new deal aims to ensure major supplier CF Fertilisers can remain operational, to ensure UK businesses, including the meat industry, have access to a sustainable supply of CO2.

George Eustice, Defra Secretary
The Secretary of State for Environment, Food and Rural Affairs, George Eustice.

According to the government, CO2 suppliers have agreed to pay CF Fertilisers a price for the CO2 it produces that will enable it to continue operating while global gas prices remain high, “drawing on support from industry and delivering value for money for the taxpayer.”

CF Fertilisers currently produces around 60% of the UK’s commercial CO2 requirements.

In September, the government agreed a 3-week arrangement with CF Fertilisers that allowed the company to continue operating while the industry moved towards a further agreement. The new deal runs until January 2022 and aims to ensure that key sectors, including food processing and nuclear power, are supplied with CO2 within this time.

Secretary of State for Environment, Food and Rural Affairs, George Eustice, said: “CO2 is vital for our food and drink sectors. The government has taken decisive action in these exceptional circumstances to allow a deal to be reached which will continue the supply of CO2 to businesses – including thousands of food and drink businesses – up and down the country.”

“What we need now is transparency”

Chief executive of the British Meat Processors Association (BMPA), Nick Allen, said: “The agreement between C02 manufacturers and wholesalers provides some reassurance that supplies will be maintained. However, industry has been given no detail on what the price will be or how it will be calculated going forward. We understand that Business Secretary Kwasi Kwarteng took the decision to temporarily exempt parts of the CO2 industry from competition law to facilitate this agreement; what we need now is some detail and transparency around how the new pricing structure will work.”

“We must now think long-term”

British Poultry Council (BPC) chief executive, Richard Griffiths, said: “We welcome the announcement of a deal between CF Industries and gas wholesalers. Our member businesses have worked tirelessly to mitigate the issues brought on by the recent CO2 episode and the announcement of a deal provides some respite for sectors like our own. We must now start thinking longer-term and look to solutions to build resilience into our supply chains. We are waiting for more information from Government on the deal and look forward to working with them upon hearing further detail.”

“The industry needs more than a temporary agreement”

A spokesperson for the Association of Independent Meat Suppliers (AIMS), Tony Goodger, added: “We welcome the announcement on CO2 as this adds a further piece to the jigsaw that is meat and poultry processing, however any amount of CO2 will be worthless unless we have the butchers to process the meat. We urge Mr Kwarteng and his cabinet colleagues at Defra and the Home Office to reach a quick solution to the issues surrounding Skilled Worker Visas.”

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