What affect will the CO2 shortage have on Britain’s food and drink supply chain?
CO2 is a necessary by-product of making fertiliser and plays a critical role in the food and drink production process. It is used in everything, from stunning poultry and pigs for slaughter to vacuum packaging used to keep salads and meat fresh. Earlier this week The British Meat Processors Association (BMPA) warned that CO2 supplies could run out within two weeks.
What has caused the CO2 shortage?
The national shortage was triggered when two of the largest fertiliser producers halted UK production following soaring gas prices. Approximately 60% of Britain’s CO2 supply comes from two factories in Cheshire and Teesside, which were forced to shut down last week. The price of gas has risen sharply in recent weeks across Europe and has started to push suppliers out of business. In August alone, the cost of natural gas increased by 70% across Europe.
What’s the solution?
The UK Government have been forced to act fast to resolve the issue. An announcement on Tuesday evening said that the factory in Teesside would restart production imminently, following a government financing deal.
However, it is still unclear if the second plant in Cheshire will reopen. The prime minister has been quoted as saying he doesn’t think this will a long-term problem, with Ian Wright (FDF chief executive) predicting that pig and poultry production can resume as close to normal. However, as expected, the closure has already resulted in an increased pressure on labour and logistics due to the backlog.
The Government have committed to building resilience into the production of CO2 to avoid future supply chain problems, once the current issue has been resolved.
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