Ministers agree to cover plant costs to keep CO2 production going – reports

A deal to avoid disruption to food supply and the health service will see the Government pay towards the higher energy costs involved in producing CO2, according to reports.

With carbon dioxide vital in the food trade, ministers have sought to take “direct steps” to ensure high gas prices do not lead to empty supermarket shelves by signing a deal with US firm CF Industries.

Spiralling energy costs have led to the suspension of operations at fertiliser plants – which produce CO2 as a by-product – having a knock-on effect on the food industry.

Business Secretary Kwasi Kwarteng has now struck an agreement with fertiliser firm CF Industries, which had suspended operations at its Teesside and Cheshire plants because of the high cost of energy.

CO2 is used across a host of sectors, including in the NHS and the food supply chain.

It is injected into the packaging of perishable foods such as meat and salads to inhibit the growth of bacteria, typically prolonging the shelf life of products such as beef steak by around five days.

The gas is also used to stun animals prior to slaughter, and is deployed as a coolant for medicines and vaccines in the NHS and likewise in nuclear programmes.

The Department for Business, Energy and Industrial Strategy said it is not yet in a position to confirm the details of what has been agreed with CF Industries.

The BBC reported, however, that Mr Kwarteng has approved a letter of indemnity which agrees that the Government, for a time-limited period, will pay the extra energy costs involved with starting production back up in Teesside and Cheshire.

The broadcaster said the CF Industries deal has been drafted so that is an exclusive offer to the US-owned company, meaning other companies who stop production due to high commodity prices will not be able to ask the Government for similar assistance.

Downing Street would also not confirm any details of a deal with CF Industries over the CO2 shortage when asked on Tuesday afternoon.

“The Business Secretary has been in discussions with CF Industries since the weekend on how we get their plants up and running as soon as possible to secure a continued supply of CO2 to UK businesses,” a No 10 spokesman said.