Energy crisis: UK looking at plans to bolster CO₂ supply as shortages threaten food industry

·1-min read

The UK is working on an agreement with a US producer of carbon dioxide (CO₂) to urgently restore supplies to its food processors.

Last week, Illinois-based CF Industries, which sells CO₂ as a byproduct of making fertiliser, announced it would halt production in the UK due to soaring natural gas prices.

Globally, they are up 81% month-on-month, and over 500% year-on year-because of post-lockdown demand and delivery disruptions.

The food processing industry uses CO₂ to stun animals before slaughter and to keep food fresh during packaging, hence it was among the first to feel the impact of the spike in wholesale gas prices.

UK food giants warning of shortages 'within 10 days'

In the UK, costs have tripled this year.

The Food and Drink Federation said that unless a deal is struck soon, shoppers will begin to notice shortages “in about 10 days".

Frozen food giant Iceland has warned that shortages could occur even "in the coming days", if production doesn't go back to normal.

British business secretary Kwasi Kwarteng said the government was discussing a range of options to bolster CO₂ supplies, including subsidising production at CF Industries.

He told Sky News that he was confident to "resolve the situation by the end of the week".

Speaking in the Commons on Monday, he also ensured that energy price caps will remain in place, after the expected 12% increase on October 1.

At the same time, he warned companies facing a hard-time due to the current crisis that the goverment won't be bailing them out.

"The taxpayer should not be expected to prop up companies which have poor business models and are not resilient to fluctuations in price", he told parliament.

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