Industry strikes fresh CO2 supply deal to avoid food shortages

Fears of potential food and drink shortages have been allayed after a fresh deal was struck keep a vital supply of CO2 flowing.

Last year, producers said shortages were looming after fertiliser firm CF Industries, which produces 60% of the UK’s food-grade CO2, said it would stop selling the by-product amid surging costs.

The Government struck a three-week deal in September before a further deal in October to keep CO2 supply going to firms, but this was due to expire on Monday.

However, the Government has now confirmed it has secured a new deal to ensure a “sustainable” supply of food-grade CO2.

It is understood that the new deal will last until at least the spring, although full details of the deal have not been disclosed.

In a statement, the department for Business, Energy and Industrial Strategy said: “The carbon dioxide (CO2) industry has come to an agreement to ensure UK businesses have access to a sustainable supply of CO2 – an essential component of the national economy.

“The deal will enable CF Fertilisers’ Billingham plant to continue to operate while global gas prices remain high.

“It means key sectors, including food processing and nuclear power, are ensured supplies of CO2.”

There had previously been industry concerns that a shortage in CO2 could result in empty shelves at supermarkets, with fresh produce, meat and fizzy drink firms reliant of CO2 for the production and packaging of items.

Analysts at Jefferies said the deal “helps to remove the potential overhang from either disrupted supply or significantly higher costs to source CO2, which is an overlooked, but important, constituent of sparkling soft drinks and draught beer”.