Gas crisis: Taxpayers to pay towards restart of CO2 production

21 September 2021, 22:35 | Updated: 21 September 2021, 23:30

Kwasi Kwarteng agreed the deal with CF industries
Kwasi Kwarteng agreed the deal with CF industries. Picture: Alamy

By Emma Soteriou

Taxpayers are set to bear the costs of CO2 production to prevent further shortages in coming weeks, it has been announced.

In a deal agreed by Business Secretary Kwasi Kwarteng, "limited financial support" will be provided to American firm CF Fertilisers for three weeks to assist with their operation costs.

It comes as part of an effort to avoid disruptions to food supply across the country as well as the national health service.

The Department for Business, Energy and Industrial Strategy said the "exceptional short-term arrangement" would allow the company to immediately restart operations, producing CO2 at its Billingham plant in Teesside.

CF Fertilisers currently produces around 60 per cent of the UK's CO2. However, it was forced to shut down two plants last week, citing the high cost of natural gas.

Read more: Gas crisis: major CO2 supplier restarts UK production

Read more: No question of lights going out this winter, says Kwarteng amid gas price crisis

Ed Davey criticises government for action on energy crisis

Spiralling energy costs have had a particular knock-on effect on the food industry, with ongoing fears that lack of action could lead to more shortages on supermarket shelves.

Ian Wright, chief executive of the Food and Drink Federation, previously warned that shoppers may notice products missing "in about 10 days" if a solution was not found.

CO2 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.

Martin Lewis warns of stark choice for some this winter

Following the announcement, Business Secretary Kwasi Kwarteng said: "This agreement will ensure the many critical industries that rely on a stable supply of CO2 have the resources they require to avoid disruption.

"The quick and decisive action we have taken to resolve the issue shows the seriousness with which we have approached it.

"In our ongoing response to manage the impact of global gas price rises, we will continue to protect businesses and consumers."

Meanwhile, Environment Secretary George Eustice said: "We have acted decisively to ensure that CO2 supplies, which are critical to some of our food sectors, continue to be available following some exceptional events.

"However this is a short term intervention to provide the space and time for market adjustment."

Prime Minister Boris Johnson said on Tuesday afternoon that the Government would take "direct steps" to ensure availability of the gas.

Business Sec says the UK gas supply is secure

Tony Will - the head of CF Industries - said: "We want to thank The Honourable Kwasi Kwarteng, Secretary of State for Business, Energy and Industrial Strategy, and his entire staff for working tirelessly to bring about this agreement enabling restart of the plant and averting a potential CO2 supply disruption impacting many industries, including food and beverage availability to UK consumers.

"We look forward to working with Secretary Kwarteng and the UK Government on developing a longer-term solution, including the development of alternative suppliers of CO2 for the UK market."

More Latest News

See more More Latest News

Breaking News

Two detained following Gatwick Airport bomb scare as police 'ramp up presence' in terminal

Breaking
Conor McGregor

Conor McGregor raped woman in hotel, civil jury finds, as she is awarded damages

Donald Trump

Donald Trump hush money sentencing postponed as judge says president-elect can seek dismissal

Backpacker Sarisha said the Nana Backpackers Hostel offered free alcohol in exchange for good reviews

Hostel at centre of 'mass methanol poisoning' offered free shots in exchange for good reviews, backpacker claims

Parents of British lawyer killed in Laos 'mass methanol poisoning' pay tribute to 'kind and loving daughter'

Parents of British lawyer killed in Laos 'mass methanol poisoning' pay tribute to 'kind and loving daughter'

Queen Camilla to miss Royal Variety as she continues recovery following chest infection

Queen Camilla to miss Royal Variety as she continues recovery following chest infection

Gatwick South Terminal to reopen after bomb scare but passengers still face flight delays and cancellations

Gatwick South Terminal reopens after bomb scare but passengers still face flight delays and cancellations

London, UK. 22nd November 2024. Police cordon and firefighters on the scene at the Embassy of USA in London following a controlled explosion of a suspicious package. Credit: Vuk Valcic/Alamy Live News

Police say US embassy 'suspect package' was probably a hoax after carrying out controlled explosion

Many Britons again faced freezing temperatures overnight

Brits brace for Storm Bert: Met Office issues amber weather warning for snow - with up to 40cm set to fall

Harshita

'We will never forget you till our last breath': Family of Harshita Brella pay tribute - as manhunt continues for killer

Live
Gatwick airport.

LIVE: Gatwick Airport South Terminal evacuated after 'suspicious item found'

Exclusive
Negative images from Band Aid did 'more bad than good' for Africa, says rapper Fuse ODG

Negative images from Band Aid did 'more bad than good' for Africa, rapper Fuse ODG tells LBC

Gatwick Airport South Terminal evacuated after 'suspicious bag found near train station' as bomb squad called in

Gatwick Airport South Terminal evacuated after 'suspicious bag found near train station' as bomb squad called in

Simone White will be 'sincerely missed', a tribute to her has said

Devastated colleagues pay tribute to British lawyer as Laos ‘methanol mass poisoning’ death toll rises to six

Colette Fairbanks was sacked after sharing ‘offensive’ posts

Brexit views not protected from workplace discrimination, tribunal rules after woman sacked over ‘offensive’ posts

The Metropolitan Police carried out a controlled detonation of a suspect package near the US embassy in London

US Embassy in London on 'lockdown' as police investigate 'suspect package'