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Food firms warn of product shortages if CO2 deal not agreed | |
(32 minutes later) | |
Food and drink firms have raised fears over shortages as a deal that secured vital carbon dioxide (CO2) supplies is about to end without an extension. | Food and drink firms have raised fears over shortages as a deal that secured vital carbon dioxide (CO2) supplies is about to end without an extension. |
CO2 is used for keeping packaged food fresh, to stun pigs and chickens before slaughter and in fizzy drinks. | |
A supply chain crisis was averted last year when the government stepped in to broker a three-month price-fixing deal between CO2 producers and industry. | A supply chain crisis was averted last year when the government stepped in to broker a three-month price-fixing deal between CO2 producers and industry. |
That deal will end this month, with the industry warning it may hit supplies. | |
Industry body the Food and Drink Federation (FDF) said there was just days left to agree a new deal. | |
"We are concerned with just days now remaining before that agreement comes to an end, and energy prices still very high, there will be further CO2 shortages once again," it added. | |
"This could lead to shortages in the products we find on our supermarket shelves - adding further pressures to families already coping with high food-price inflation." | "This could lead to shortages in the products we find on our supermarket shelves - adding further pressures to families already coping with high food-price inflation." |
Critical CO2 supply deal for food industry agreed | |
However, it would appear that the government is unlikely to put up more money to secure supplies, saying it is up to CO2 firms to ensure continued supplies. | |
CO2 is essential across industry and in the National Health Service. | |
One US fertiliser firm, CF Industries, makes 60% of the UK's commercial carbon dioxide as a by-product of producing ammonia for fertiliser. | |
Last year, it temporarily shut its facilities after fertiliser manufacturing became uneconomic because of the rising price of wholesale gas, cutting off a vital source of CO2 for other sectors. | |
The government intervened to persuade CF Industries to continue supplies of the gas until the end of January. | |
To get production re-started, the government made available a three-week financial support package to CF and then brokered a deal to keep prices down until the end of January. | |
CF Industries said it "continues to negotiate with our industrial gas customers to extend CO2 off-take and pricing agreements". | CF Industries said it "continues to negotiate with our industrial gas customers to extend CO2 off-take and pricing agreements". |