Nuclear Power, Food and Other Industries Affected by UK CO2 Shortage, Which is Spilling into Europe

Soaring prices for natural gas have severely affected Europe’s energy sector, driving many companies out of the market and prompting bankruptcies. Fertiliser plants, which use natural gas as a feedstock, have also been troubled by the increased costs. These factories have been an important source of food-grade CO2…

Britain’s carbon dioxide crisis, which has put the medical, nuclear and food industries under threat, has already been acutely felt in Europe, according to one of the world’s largest distributors of gas, Nippon Gases.

What Do We Need CO2 For?

The world widely uses carbon dioxide for cooling at nuclear power plants, for preserving foods, in slaughtering stunned animals and even making fizzy drinks.

CO2 is usually obtained as a byproduct during the manufacture of fertilisers, ammonia or alcohol. The gas is also being emitted by power plants. While the environmentalists are battling against these emissions and trying to cut them to a lower level, purified CO2 remains a very useful product.

Chemical companies that have special equipment, rather than power plants, are tasked with producing ‘safe’ CO2, which is then used in the food and medical sectors.

Fresh meat is displayed for sale in a butchers meat counter in Great Yarmouth, Britain, March 21, 2018

© REUTERS / Hannah Mckay

Why Does the UK Have a CO2 Crisis?

The UK remains one of the largest users of CO2 in Europe. The UK used to rely on two ‘CF Industries’ fertiliser plants in the north of England to serve the Kingdom’s rising needs for fizzy beverages and meat.

However, a dramatic surge in natural gas prices has recently prompted the closure of these factories, which needed the fuel to keep them running.

Britain, which used to get some 60% of its CO2 from these two plants, was left with no other alternatives but to rely on smaller factories and import CO2 from Scandinavia and the Netherlands.

But EU fertiliser companies have also been feeling chills from the carbon dioxide crisis.

What’s the Situation in the Rest of Europe?

The surge in natural gas prices has been felt across the whole continent, so the problem with plants producing CO2 is now affecting more countries than the UK alone.

One of the world’s largest distributors of gas, Nippon Gases, was the first to issue a warning about the carbon dioxide shortages soon spilling over to the rest of Europe.

In 2020, Japanese-owned Nippon Gases sold some $1.5bn of industrial gases to the continent. But the company now estimates that its CO2 supplies have fallen by 50% across the region, according to the Financial Times.

Another large international supplier of chemicals, Norwegian group Yara, said last week that it would shrink 40% of its ammonia production in Europe. According to Yara’s chief executive Svein Tore Holsether, it is just not profitable to sustain fertiliser plants in Europe anymore due to the enormous price of natural gas, which is used as a feedstock for ammonia production.

“We’re running at a huge negative cash flow,” the official explained. “Ammonia production with today’s natural gas prices and today’s spot prices for ammonia is simply not profitable in Europe.”

Yara is planning to shrink its CO2 supplies not only in the UK, but also in Germany, Italy, Norway and the Netherlands.

Apart from the near collapse of the CO2 industry, the surge in natural gas prices has also led to a massive crisis in the energy sector, with companies seeking bailouts and fearing insolvencies. In the UK alone, the prices for natural gas had gone up some 250% since January, according to Industry group Oil & Gas UK.