Carbon dioxide supplies are once again at risk, after CF Industries has announced its intention to close its last remaining fertiliser plant at Billingham. The closure of the plant would remove the bulk of the UK’s CO2 supplies from the market.
CO2 is a by product of fertiliser production and is used extensively in poultry production, to stun animals before slaughter and in the packaging of meat.
The British Meat Processors Association (BMPA) said a shortage would pose a serious animal welfare issue and called on Government to step in.
“We knew back in June that the closure of CF Industries’ Cheshire plant would leave UK CO2 supplies vulnerable to anything going wrong with their remaining Billingham plant and that we would be heavily reliant on overseas suppliers to make up the shortfall,” said BMPA chief executive Nick Allen. “Since then, ammonia producers in Italy and Germany have cut production which sent European food and drink companies scrambling to secure tightening supplies of the gas at the end of July.
“Whilst we are in a much better position now than we were a year ago, if CF Industries follows through on its threat to close Billingham the British meat industry will have serious concerns. Without sufficient Co2 supplies the UK will potentially face an animal welfare issue with a mounting number of pigs and poultry unable to be sent for processing.
“It’s for this reason that securing CO2 supplies is of key strategic importance and, following this latest development, we can’t see how Government can sit on the side lines and insist that it’s for companies to work it out amongst themselves. They are going to need to step in.”
CF Fertilisers said at current natural gas and carbon prices, ammonia production is uneconomical, with marginal costs above £2,000 per tonne and global ammonia prices at about half that level.
The Company has notified customers who purchase CO2 on a contract basis from the Billingham Complex about the impending temporary halt of ammonia production. Once the ammonia plant is safely shut down, CO2 production, which is a byproduct of the ammonia production process, will stop until the plant is restarted.
The Company has not yet determined the exact date when it will begin the temporary shutdown of the ammonia plant. At this time, CF Fertilisers UK do not anticipate any impact on employees regarding this announcement given the substantial level of activity that will continue to occur at Billingham.