Britain tells its food industry to prepare for CO2 price shock

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Natural gas prices have spiked in 2021. Carbon dioxide is a by-product of the fertilizer industry – Britain's main source of CO2 – where natural gas is the biggest input cost.

Britain warned its food producers on Wednesday, September 22, to prepare for a 400% rise in carbon dioxide prices after extending emergency state support to avert a shortage of poultry and meat triggered by soaring costs of wholesale natural gas.

The natural gas price surge has forced some fertilizer plants to shut in recent weeks, leading to a shortage of CO2 used to put the fizz into beer and sodas and stun poultry and pigs before slaughter. It would have to accept that the price of CO2 would rise sharply, to around 1,000 pounds a ton from 200 pounds a ton, Eustice said, adding,"So a big, sharp rise."

It was not immediately clear how the state intervention by one of Europe's most traditionally laissez-faire governments would affect the price of fertilizer – another key cost for food producers – and whether or not it would stoke demands from other energy-heavy industries for similar state support.Ministers, including Johnson, have repeatedly brushed aside suggestions there could be shortages of traditional Christmas fare such as roast turkey, though some suppliers have warned of them.

"We know that 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," he added.But the boss of supermarket Iceland said the temporary arrangement would not solve the food industry's problems.

 

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