UK Environment Secretary Defends Bailing Out Private US Firm During CO2 Shortage
The UK governments bailout of a private US firm that supplies carbon dioxide to the food industry will run into many millions of pounds, the environment secretary has said. George Eustice said the financial support was necessary for three weeks to enable CF Industries, a fertiliser company that supplies CO2 as a byproduct, to restart production at one of its sites.
Food suppliers need carbon dioxide for meat production and packaging of fresh foods, but high gas prices had made it uneconomic for CF Industries to operate its sites in Teesside and Cheshire. It supplies about 60% of the CO2 that the UK needs for food production. Eustice said taxpayer support would be needed for only about three weeks until the market adjusted with more supply from elsewhere and customers of CF Industries adapted to a higher carbon dioxide price.
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The Department for Business, Energy and Industrial Strategy said the exceptional short-term arrangement with the US-owned firm would allow the company to restart operations immediately and produce CO2 at its Billingham plant in Teesside. The firm has another site in Cheshire, which remains closed. Retailers and suppliers had warned on Monday that supermarkets would begin to run short of poultry, pork and some other fresh foods by the end of next week if the government did not take action.
Richard Griffiths, the chief executive of the British Poultry Council, had on Tuesday urged the government to act, saying the gas shortages could affect the slaughter of up to 20 million birds a week in the UK, most of which were chickens. Ian Wright, the chief executive of the Food and Drink Federation, had said the potential shortages of CO2 were a real crisis and added: The just-in-time system which underpins both supermarkets and the hospitality industry is under the most strain it has ever been in the 40 years it has been there.
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https://www.theguardian.com/politics/2021/sep/22/bailout-of-us-carbon-dioxide-supplier-will-cost-uk-taxpayers-many-millions