BBPA issues warning as high gas prices shut down CO2 plant
Once the ammonia plant is safely shut down, CO2 production will stop until the plant is restarted, and the BBPA said the closure could lead to shortages of beer across the country
The British Beer and Pub Association (BBPA) has warned there are “serious concerns” surrounding the closure of a CO2 manufacturing plant as it will impact the supply of CO2 to the brewing and pub industry.
CF Fertilisers UK, a subsidiary of CF Industries Holdings, announced yesterday (24 August) its intention to temporarily halt ammonia production at its Billingham Complex due to market conditions.
Once the ammonia plant is safely shut down, CO2 production will stop until the plant is restarted. CF Fertilisers has not yet determined the date when it will begin the temporary shutdown of the ammonia plant.
The BBPA said the closure could lead to shortages of beer across the country.
CF Fertilisers intends to use the site’s capability to import ammonia to enable it to continue to run its ammonium nitrate (AN) and nitric acid upgrade plants. However, CF Fertilisers said it expects to fulfil all ammonia and nitric acid contracts and all orders of AN contracted for delivery in the coming months.
At current natural gas and carbon prices, CF Fertilisers UK’s ammonia production is “uneconomical”, with marginal costs above £2,000 per tonne and global ammonia prices at about half that level.
The company said the current cost of natural gas at NBP is more than twice as high as it was one year ago, with the NBP forward strip suggesting that this price will continue to rise in the months ahead.
Emma McClarkin, chief executive of the British Beer and Pub Association (BBPA), said: “The timing of this news couldn’t be worse as our pubs and brewers are already dealing with severe headwinds and pressures on their supply chains.
“A guaranteed supply of CO2 is essential for operations across pub and brewing businesses and this announcement comes at a time when they are already facing extreme rising costs, threatening to close businesses and damage people’s livelihoods. These surging energy prices are impacting pubs and brewers across the whole of their supply chain.”
She added: “Our pubs and brewers are between a rock and a hard place and waiting even a few weeks for the Government to act could be too long. We need a sustainable plan for the supply of CO2 to our industry and urgent help with rising energy bills for businesses before they’re forced to close their doors.”
