(Bloomberg) --
The cost of carbon dioxide that Britain’s food sector needs for slaughtering animals, packaging items and giving soda its fizz could soar fivefold as the state moves to avert shortages, the environment secretary said.
The government on Tuesday agreed to give “limited financial support” to help CF Industries Holdings Inc. restart a fertilizer plant halted by high gas prices, where CO2 is made as a byproduct. That will cost “many millions” of pounds and leave food and beverage makers paying more for the vital ingredient, Environment Secretary George Eustice told Sky News.
“We need the market to adjust,” Eustice said. “The food industry knows that there’s going to be a sharp rise in the cost of carbon dioxide, probably going from 200 pounds ($273) a ton, eventually closer to 1,000 pounds.”
CO2 is used to stun pigs and chickens for slaughter, as well as in packaging to extend food’s shelf life and for the ‘dry ice’ that keeps items frozen during delivery. Fertilizer output at CF Industries’ two sites that it halted last week provide as much as 60% of Britain’s CO2 production.
The British Poultry Council on Tuesday welcomed news of the government’s intervention, but said it’s the start of a “long road ahead” and food must be treated as a national security issue.
“Hopefully this will kick-start supply immediately and the impact on food availability for customers will be minimal,” said Richard Walker, managing director of frozen food retailer Iceland. “But what happens the next time gas prices spike?” he said, adding that the country needs to diversify its CO2 supply.
©2021 Bloomberg L.P.
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