UK firms and government agree carbon dioxide supply deal

Businesses, including those in the food and drinks sector, will have access to crucial supply of CO2 until January 2022

The carbon dioxide (CO2) industry has struck an agreement with the government to ensure UK businesses, including those in the food and drinks sector, have access to crucial supply of CO2 until January 2022.

Under the deal, CO2 suppliers have agreed to pay CF Fertilisers – which produces around 60% of the UK’s commercial requirements – a price for its production that will enable the company to remain operational while global gas prices remain high.

CO2 is used to stun animals, such as pigs and chickens, before slaughtering as well as for vacuum-packing meat products and chilling stages of poultry meat production – but it is a by-product of fertiliser production.

It follows an agreement in September when the government struck a three-week arrangement with CF Fertilisers to subsidise one of its plants after its shutdown, as high gas prices threatened food supplies.

Last week, parts of the CO2 industry were also temporarily exempted from a competition law to facilitate the agreement and provide further security of CO2 supplies to UK businesses.

Business Secretary Kwasi Kwarteng said: “Today’s agreement means that critical industries can have confidence in their supplies of over the coming months without further taxpayer support.

“The government acted quickly to provide CF Fertilisers with the support it needed to kick-start production and give us enough breathing space to agree a longer term, more sustainable solution.

“I would like to thank all the parties involved in this agreement who have recognised the importance of avoiding supply disruptions and delivering for UK businesses and consumers.”

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