CF INDUSTRIES has announced it will temporarily halt production at its Billingham fertiliser plant in Teesside, a move likely to put pressure once again on the UK’s poultry sector.
The factory is a crucial producer of CO2, a ready supply of which is critical to poultry processors, who use it to stun birds before slaughter.
Last year CF Industries announced the closure of two of its ammonia production plants, which produce CO2 as a byproduct, prompting a government bailout to keep production going.
The Daily Mail reports that a similar agreement is unlikely to be reached this year.
In a statement, CF Industries said current market conditions forced the closure.
“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 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.
“The Company has notified customers who purchase carbon dioxide (CO2) on a contract basis from the Billingham Complex about the impending temporary halt of ammonia production.
“Once the ammonia plant is safely shut down, CO2 production, which is a byproduct of the ammonia production process, will stop until the plant is restarted.”
NFU President Minette Batters said: “This move by CF Fertilisers to temporarily suspend ammonia production, which is one of the key ingredients to produce fertiliser, is extremely worrying and is a sign of the pressure the fertiliser and energy markets are under.
“We will be monitoring any impact this decision has on the immediate fertiliser market and we will be meeting with CF Fertilisers to understand what this suspension means for future fertiliser orders and how long this temporary halting of production is anticipated to last for.
“The NFU will continue to engage with the government on action to improve the resilience and transparency of the fertiliser market, which is crucial to maintaining and enhancing our domestic food production.
“I am also urging the government to review how this decision impacts CO2 availability in the UK, which is essential in the food supply chain to process and package food.”