Why is fuel-linked CO2 ‘crisis’ set to impact meat, beer, and fizzy drinks?

The government has intervened to restart CO2 production after concerns that meat, beer and fizzy drinks could be in short supply as a result of the skyrocketing prices of natural gas.

Wholesale gas prices have risen sharply, partly as a result of higher demand as economies around the world begin to recover amid the ongoing Covid pandemic.

The high prices have also been blamed on lower flow of gas to the UK from Norway and Russia, and maintenance issues at some gas sites.

Carbon dioxide (CO2) is used to stun animals before they are slaughtered, and the gas is also used in meat processing and storage.

CO2 is also used to make beer and soft drinks fizzy. The gas is a by-product of making fertiliser.

Two fertiliser plants, in Teesside and Cheshire, suspended their operations indefinitely this week as a result of the global shortage of natural gas that is used to power them.

This chain of events has had a knock-on effect on supplies of meat and carbonated beverages.

After dire warnings about shortages from the food industry the government stepped in and decided to subsidise a US-owned fertiliser manufacturer to ensure the supply of CO2.

Business secretary Kwasi Kwarteng brokered the deal that will mean millions of pounds of taxpayer money will provide “limited financial support to towards CF Fertilisers’ running costs to prevent a food supply shortage at Britain’s supermarkets.

The deal will be in place for three weeks and Environment Secretary George Eustice said the agreement is "going to be into many millions, possibly the tens of millions".

He told Sky News: "The truth is, if we did not act, then by this weekend, or certainly by the early part of next week, some of the poultry processing plants would need to close, and then we would have animal welfare issues - because you would have lots of chickens on farms that couldn’t be slaughtered on time and would have to be euthanised on farms. We would have a similar situation with pigs.

"There would have been a real animal welfare challenge here and a big disruption to the food supply chain, so we felt we needed to act."

The deal means that CO2 operations at the Billingham plant in Teesside can immediately restart, officials at the Department for Business, Energy and Industrial Strategy (Beis) said.

Mr Eustice suggested the second plant would also be brought back online.

Meat producers and food industry chiefs had called on the government to step in and warned that if they didn’t then food shortages would soon follow.

Ian Wright, the chief executive of the Food and Drink Federation, warned on Tuesday that consumers would start seeing shortages in poultry, pork and bakery products within days.

He told BBC’s Today programme that the Co2 problems come on top of Brexit-related issues and a shortage of lorry drivers.

He said: "We have been saying for several weeks now that the just-in-time system which underpins both our supermarkets and our hospitality industry is under the most strain it has ever been in the 40 years it has been there.”

"It is a real crisis."

After the government intervention later that day Mr Wright welcomed the deal, but warned that the supply chain continues to be fragile.

He said: "I think it’s a temporary solution but it’s a welcome one, and means there won’t be many noticeable shortages on the shelves, although there are already some because of staff shortages."

Mr Wright warned that although food would continue to enter warehouses in the lead-up to Christmas, "the supply chain is so fragile that any other shock might do it in as well".

Prior to the government’s plan, Richard Griffiths, chief executive of the British Poultry Council, told the BBC: "We grow and slaughter around 20 million birds a week, the vast majority of those are chicken. We also trade, so total consumption in this country is somewhere around 30 to 35 million birds a week.

"It will be a real challenge if there is a shortage of CO2 to the point that slaughterhouses cannot process the birds. That is really the worst case scenario, which is why we are so hopeful that the Government can step in here."

Fresh fruit and vegetables could also have been impacted by the shortage of CO2, according to the Cucumber Growers Association, as greenhouses are pumped with the gas to boost crops.

The healthcare sector was also under threat due to the shortage of CO2, as the gas is used in surgical procedures. Although not mentioned by the government, CO2 is also used in the manufacturing industry, as well as refrigeration.