Uncertainty surrounds the future of a fertiliser plant on Teesside as a Government deal to support production comes to an end.
Around 300 people are employed at the CF Industries plant in Billingham, where production was halted last year when rising energy costs made its operation unviable.
The Government stepped in to help the company, which also has a site in Cheshire, as a side product of CF’s operations is the production of CO2 that is vital for the food industry.
Read more : go here for more North East business news
But with that arrangement coming to an end at the end of January, there are fears that the factory could again close down.
When approached by BusinessLive, the company said: “CF Industries continue to negotiate with our industrial gas customers to extend CO2 offtake and pricing agreements.”
But it did not respond to direct questions on whether the end of its arrangement with the Government would affect the future of the site.
Meanwhile, the Food and Drink Federation (FDF) has raised fears over CO2 supplies, saying it was “critical” the Government acts to keep supply moving. It said that the end of this deal could result in shortages in supermarkets, with fresh produce, meat and fizzy drink firms reliant of CO2 for the production and packaging of items.
Kate Halliwell, chief scientific officer at the FDF, said the security of food-grade CO2 supplies has been a “concern for our industry for some time” and warned that this could be another crunch point.
“Last year’s Government intervention which guaranteed CF Industries production of CO2 until the end of this month was very welcome,” she said.
“But we are concerned that with just days now remaining before that agreement comes to an end, and energy prices still very high, there will be further CO2 shortages once again.
“This could lead to shortages in the products we find on our supermarket shelves - adding further pressures to families already coping with high food-price inflation.
“We will continue to work with the Government on this.
“It is critical that together we ensure supply can continue and that we build long-term resilience into the production of food-grade CO2.”
The Government has highlighted that further CO2 supplies, such as from Ensus at Wilton on Teesside, have come online and there have been increased imports.
A spokeswoman for the Department for Business, Energy and Industrial Strategy said: “The Government’s three-week arrangement with CF Fertilisers was necessary to immediately restart operations while a longer-term industry-led agreement was sought without further taxpayer support.
“Without Government intervention, the CO2 shortage could have severely impacted the food processing sector, the National Health Service and nuclear power generation.
“We welcome industry’s agreement in October to ensure CF Fertilisers on Teesside can continue to operate even during the current period of high global gas prices. It is for the CO2 industry to ensure supplies to UK businesses.”
You can join the BusinessLive North East conversation on LinkedIn and Twitter
