Co2 supply shock could mean food shortages within 14 days
The Co2 crisis that’s unfolding this year probably looks to be a lot worse than the last one in 2018. Co2 gas plays a critical and irreplaceable role in the food and drink manufacturing process and businesses can grind to a halt if they cannot secure an adequate supply. This means that, once their current stocks of the gas run out (estimated to be in less than 14 days) some companies will have to stop taking animals and close production lines, leading to a logjam of animals back to the farms. We already have this situation in the pig industry which is now facing the imminent prospect of a humane cull on farms.
For other companies producing beef and lamb they could continue producing retail packs of meat, but without Co2 used in the vacuum packing process, up to 5 days shelf life would be lost. Given the current food chain disruption caused by a lack of HGV drivers, this could pose an additional problem for retailers.
Nick Allen, CEO of the British Meat Processors Association said: “This crisis highlights the fact that the British food supply chain is at the mercy of a small number of major fertiliser producers (four or five companies) spread across northern Europe. We rely on a by-product from their production process to keep Britain’s food chain moving.”
Once current stocks of the gas run out some companies will have to stop taking animals and close production lines
Both the fertiliser producers and, by extension their Co2 customers in the food and drink industry, are reliant on energy and commodity prices, as well as demand for ammonium nitrate staying high. If one of these gets thrown out of balance factories either slow production or, in this extreme case, completely mothball plants. The result is that Co2 supplies dry up.
While this is not a significant problem for the fertiliser manufacturers, it is of much more strategic importance to the country’s food security. And, it’s this structural vulnerability that BMPA is seeking to address with Government.
At the moment, the Co2 market is very opaque. Supplies are moved around between countries and companies to the extent that we do not know exactly how much European Co2 the British food industry relies on or how much is in the system at any one time. Worryingly, we now understand that multiple plants in Europe, where we would have turned to for emergency supplies, are also to be closed.
In short, the strategic nature of the problem requires a strategic response from Government. Just as the water industry is regulated and monitored closely to avoid public crises, Government should be able to intercede in a more meaningful way to prevent this happening again.
To tackle the current crisis BMPA is lobbying the Secretary of State for Business, Energy and Industrial Strategy for Government support to help prop up UK Co2 production short-term. We also want Government to take a firmer stance with the UK Co2 producers. Nick Allen said: “This time, we’ve had zero warning of the planned closure of the fertilizer plants in Ince and Stockton-on-Tees and, as a result, it’s plunged the industry into chaos. We urgently need the Secretary of State for Business to convene the big Co2 manufacturers to demand that they coordinate to minimise disruption, and provide information to Britain’s businesses so contingency plans can be made.”