The UK government will pay millions of pounds to US companies in the coming weeks to secure the essential CO2 supply for the food industry.
Executive Secretary Kwasi Kwaten announced on Tuesday that the government would provide “limited financial support” to CF fertilizers. It produces about 60% of the UK’s carbon dioxide supply, which is used primarily in the food sector as well as in the health and nuclear industries.
Agreed with @cffertilisers To secure the supply of CO2 to important industries
From food processing + healthcare to private nuclear – this is an important resource
Continue to protect businesses and consumers while managing the impact of rising global gas prices
— Kwasi Kwarteng (@KwasiKwarteng) September 21, 2021
CO2 is used to stun animals before slaughter, extend shelf life with vacuum-packed foods, and put fizz in beer, cider, and soft drinks. The solid CO2 is dry ice, which is used for food delivery.
Soaring energy costs have shut down fertilizer plants, including CF fertilizers, and Teesside and Cheshire plants, resulting in a serious shortage of CO2 supplies.
Under the agreement, the government will pay the operating costs of CF fertilizer for three weeks, allowing the company to resume CO2 production at its Teesside plant.
UK taxpayers will probably cost tens of millions of pounds, Environment Secretary George Eustice told Sky News Wednesday.
But Mr Eustis said the government must act to protect the food supply.
“The truth is that if we don’t act by this weekend, or certainly by the beginning of next week, we need to close some poultry processing plants, and then we have animal welfare issues. Will be, “he said. Many chickens will not be slaughtered on time and will have to be euthanized on the farm. The situation is similar for pigs. “
Eustis said the food industry is aware that CO2 prices will “rise significantly.”
“And as its price rises, there will be market signals for these plants to continue production,” he told the BBC Radio 4 Today program.
Kwasi spoke with lawmakers Wednesday, emphasizing that financial support to resolve “imminent problems” is a “very short-term arrangement.”
Ian Wright, CEO of the Food and Beverage Federation, welcomed government intervention.
He said the temporary solution meant “there weren’t many noticeable shortages on the shelves.” But he warned that the supply chain remained fragile.
PA and Reuters contributed to this report.