Food processors warned of rationing amid energy crisis

Irish food processors have been warned that supplies of carbon dioxide critical to their business may be rationed as a result of an energy crisis in Britain.

Multinational group CF Industries suspended production at two British fertiliser plants last week over the soaring cost of natural gas, which is essential to their operations. Carbon dioxide is a by-product of fertiliser manufacture and is widely used in food production.

It is used in everything from the slaughter of pigs and poultry to special packaging that extends the shelf life of meat in shops. Carbon dioxide is also used in the carbonation of drinks, including beer, and, as dry ice, it plays a critical role in the transport of fresh fruit and veg and other perishable food products.

Fertiliser-production is the largest supplier of carbon dioxide for the food sector, although companies also source supplies from industrial gas companies.

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“Some companies have had communications from suppliers to say that their may be rationing of supplies,” said Paul Kelly, director of Food and Drink Ireland, the Ibec group for the sector.

Supplies

However, he said, supplies were coming through at present. Companies would typically have between one and four weeks’ supply, depending on the nature of their business, he said.

There are fears in the UK that meat production could grind to a halt within days if a solution s not found to the crisis.

Mr Kelly said the food sector faced a similar carbon dioxide crisis in 2018, when rationing did take place. However, he noted that Ireland-based food processors and logistics firms at that time did not suffer as badly as their British counterparts.

“There are concerns emerging in the supply chain for food grade CO2,” he said. “A similar supply shortage situation deteriorated quickly in 2018. We will work closely with the Department of Agriculture to ensure that the food sector is prioritised for CO2 supply.”

Ireland no longer produces fertiliser locally so all CO2 from that source would be imported.

The closure of the two British plants leaves only one substantial plant open in the UK. There are reports from Europe of similar downtime at other companies in the fertiliser sector because of high energy prices.

The price of natural gas has jumped a reported 250 per cent this year amid concerns for European supplies, ongoing maintenance at gas production facilities and increased demand from Asia as pandemic restrictions are unwound.