UK poultry processors face a significant hike in the price of CO2 used for stunning birds in the coming weeks after the government intervened to support production.
Supplies of CO2 were put under threat after two fertiliser factories that produce the gas as a by-product were shut down as rising gas prices made their operation unviable.
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Without CO2, poultry processors had warned that shelves could be empty within days, prompting government intervention.
According to Defra secretary George Eustice, a multi-million-pound payment has been agreed between the government and CF Fertiliser, which owns the two plants, to support the firm’s “fixed operating costs” for three weeks.
He told the BBC’s Today programme that the intervention would ensure the short term supply of CO2, but in the medium term, the gas would increase in price “substantially” – from £200 a tonne to about £1,000/t.
“The price of carbon dioxide is going to increase substantially, and when that price increases, then the market signal will be there for these plants to continue producing.”
The British Poultry Council’s Richard Griffiths said the intervention was a relief for members, but longer-term solutions were needed.
“We are pleased that the government has listened to us and acted quickly.
‘Start of a long road’
“This announcement is good news for the short-term continuation of CO2 production to keep food moving, but this is just the start of a long road ahead.
“This episode has demonstrated the importance of CO2 in British poultry production to avoid both bird welfare and supply issues.
“Food is a national security issue and must be treated as such: total poultry production in this country is around 20 million birds a week.
“Supply is not something you can simply switch on and off, as this crisis has demonstrated.
“Our member businesses have worked tirelessly to mitigate the issues brought on by shortages these past few days, but we must now start thinking longer-term.
“The run-up to Christmas requires additional pressure on existing supplies as demand increases across the board.
“We look forward to working with Defra and BEIS to look at longer-term solutions to mitigate future impact on food supply in the UK.”