Finance

CO2 crisis: Brewer says costs will increase as UK bails out CF Industries

One of Greater Manchester’s best known brewing companies has said CO2 costs will increase due to the Government’s decision to bail out US firm CF Industries.

Keith McAvoy, CEO of Seven Brothers Brewing, said the firm has a two to four-week supply of CO2 – so last night’s announcement that the Government will fund production at CF Industries “couldn’t have come any sooner”.

Mr McAvoy, whose firm owns beer houses in Ancoats, Middlewood Locks, MediaCity and Manchester Airport, said: “As little as a three delay in CO2 supply could have a major impact on our business.

READ MORE: How Salford’s Seven Brothers inspired by their dad’s homebrews are now selling their beer to the world

“It is likely our CO2 costs will increase because of the government investment which will have direct impact on our margin.

“The decision has accelerated our plans to carbon capture our own CO2 to make ourselves more independent and self-reliant in times like this.

“In the brewing process one of the biproducts of the fermenting is the release of CO2. We are exploring different ways to capture this and add it to our reserve. Our goal is to become a carbon negative business.”

Business Secretary Kwasi Kwarteng said last night the “exceptional short-term arrangement” with the US-owned firm will last three weeks.

The CF Industries site in Billingham, Stockton-on-Tees

It will allow the company, which last week stopped production at its Billingham and Cheshire plants, to restart operations and produce CO2 at Billingham once more. It’s not yet known when the Cheshire plant will restart.

The BBC reported that the deal could cost tens of millions of pounds.

It’s hoped in three weeks’ time, the CO2 market will have adapted to global gas prices. CF Fertilisers produces around 60% of UK’s CO2, used primarily by the food sector.

Discussing the supply chain impacts of national post pandemic shortages, Mr McAvoy added: “Currently every part of the production and supply chain process is being squeezed.

“We have been impacted by lack of carboard supplies and the access to raw ingredient to make the beer. We have faced challenges meeting deadlines with customers, due to the shortage of HGV drivers effecting our suppliers. Challenges we don’t need coming out of Covid-19.”

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