Gov must step in on Co2 plant closure plan says BBPA

25-Aug-2022 - Last updated on 25-Aug-2022 at 10:04 GMT

Many uses: hospitality’s need for Co2 is vital (Credit: Getty/Mihail Minin)

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The British Beer & Pub Association (BBPA) has urged the Government to intervene after CF Industries announced a temporary closure its only remaining plant in the UK.

Co2 is vital to the hospitality sector because it is used for many things such as carbonation of beer and soft drinks, to stun animals before slaughter and to help extend the shelf life of food.

BBPA chief executive Emma McClarkin said: “The timing of this news couldn’t be worse as our pubs and brewers are already dealing with severe headwinds and pressures on their supply chains.

“This decision raises serious concerns for the sustainable supply of Co2 to the brewing and pub industry.

Essential for operations

McClarkin continued: “A guaranteed supply is essential for operations across pub and brewing businesses and this announcement comes at a time when they are already facing extreme cost rising that are threatening businesses and people’s livelihoods across the country.

“We urge the Government to urgently convene stakeholders to ensure there is a reliable supply of Co2 to our industry and others that depend on it.”

Production at CF Industries’ Billingham ammonia plant, in the north-east of England, is to be halted because the company says the spiralling cost of gas is making it uneconomical. Co2 is a by-product of the ammonia production process.

The US fertiliser manufacturer said it had not yet decided when the temporary shutdown would occur.

Price will continue to rise

In a statement, the company said: “At current natural gas and carbon prices, CF Fertilisers UK’s ammonia production is uneconomical, with marginal costs above £2,000 per tonne and global ammonia prices at about half that level.

“The current cost of natural gas at natural balancing point is more than twice as high as it was one year ago, with the natural balancing point forward strip suggesting that this price will continue to rise in the months ahead.”

This will be the second stoppage by for CF in the previous 12 months due to soaring natural gas prices. Since September last year, the firm has struck three deals for Government support to continue production with the most recent being in February.