Finance

Government brokers long-term solution to CO2 production problem


The Government has brokered a deal with carbon dioxide producers industry to ensure supplies continue to be available from plants in the North.

The rising price of gas forced a major CO2 producer, CF Fertilisers, to shut down its plants last month in the North East and the North West, choking off supplies that are used across numerous industries including stunning animals for slaughter, extending the shelf life of food, aiding in surgical operations and cooling nuclear power plants.

Carbon dioxide is a by-product of fertiliser manufacture and the US firm supplies around 60% of the UK’s needs.

Read more : go here for more manufacturing news

The Government stepped in for a three-week period to prop up the firm in a move that was expected to cost “possibly tens of millions” of pounds, according to Environment Secretary George Eustice.

But now the Business Secretary, Kwasi Kwarteng, said a “more sustainable solution” had been found.

The deal means that until January 2022, those who buy CO2 from CF Fertilisers will pay a set price, which will allow the company to continue operating while global gas prices remain high.

And the Department for Business, Energy and Industrial Strategy (BEIS) said this reflected “the vital importance of this material to everything from our nuclear industry to hospitals to the food and beverage industry”.

Mr Kwarteng said: “Today’s agreement means that critical industries can have confidence in their supplies of CO2 over the coming months without further taxpayer support.

“The Government acted quickly to provide CF Fertilisers with the support it needed to kick-start production, and give us enough breathing space to agree a longer-term, more sustainable solution.

“I would like to thank all the parties involved in this agreement who have recognised the importance of avoiding supply disruptions and delivering for UK businesses and consumers.”

Mr Eustice added: “CO2 is vital for our food and drink sectors. The Government has taken decisive action in these exceptional circumstances to allow a deal to be reached which will continue the supply of CO2 to businesses – including thousands of food and drink businesses – up and down the country.”

Last week, Mr Kwarteng temporarily exempted parts of the CO2 industry from competition law to facilitate the agreement and provide further security of CO2 supplies to UK businesses.

Previously, Mr Eustice had warned that companies would have to accept a large rise in CO2 rates, with a possible fivefold increase from £200 a tonne to £1,000.

Most Related Links :
Business News Governmental News Finance News

Need Your Help Today. Your $1 can change life.

[charitable_donation_form campaign_id=57167]

Source link

Back to top button