UK Deal To Resume CO2 Output Key To Food Firms To Cost Millions

Britain warned Wednesday that a deal to restart captured carbon dioxide production, which is vital for the food industry but was paused owing to surging gas prices, could cost tens of millions of pounds.

CO2 is used in abattoirs to stun animals before they are killed for their meat.

It is used also to carbonate beer and soda, while frozen CO2 or dry ice keeps food fresh during transit.

Carbon dioxide is a valuable by-product of fertiliser production.

The government on Tuesday agreed to pay full operating costs of fertiliser giant CF Industries' plant in Teeside, northeastern England, for three weeks.

The US company last week shut Teeside and another facility in Cheshire in the northwest, blaming the spiking cost of natural gas used to make fertiliser, which in turn gives off CO2 needed especially by the food, health and nuclear industries.

The cost of Britain's intervention is "going to be into many millions, possibly the tens of millions" of pounds, Environment Minister George Eustice told Sky News on Wednesday.

He stressed the move was "temporary" as the CO2 market needs to "adjust" to elevated gas costs.

"Both of them (the CF plants) are going to reopen, to bring (CO2) supplies back online," Eustice added.

The two CF plants account for about 60 percent of Britain's total CO2 supply.

The CO2 shortage has triggered warnings of further pressure on food supplies, which are already hit by insufficient numbers of lorry drivers.

The news comes amid a broader supply-chain crunch that was sparked by Covid and exacerbated by Brexit.

"We didn't forsee that these two plants would need to close," Eustice said.

"There's a lot of turbulence in global supply chains at the moment as world comes out of the pandemic, comes out of lockdown (and) starts to get back to business as usual."

The government insisted on Monday that Britain would avoid a winter gas supply emergency, as soaring prices also threaten domestic energy providers and household bills.