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Britain is facing another CO2 crisis causing empty supermarket shelves and more rising prices unless a deal is done this week, food and drink companies warned today.
Consumers will have to pay even more for products – or struggle to find them – because of a US fertliser company that produces 60 per cent of the UK’s supply of the gas.
CO2 is used for everything from the humane slaughter of chickens and pigs, to putting the fizz in soft drinks and creating packaging that keeps foods fresh. And it is critical for cooling nuclear reactors and transporting chilled food as well as keeping certain medicines and vaccines cold, and used widely across the NHS.
Last September CF Industries, one of the biggest fertiliser businesses in the world run by multi-millionaire chief executive Tony Will, 55, shut its two plants in Teesside and Cheshire after a large surge in gas prices meant continued production wouldn’t be profitable.
The firm only reopened its UK operation when ministers offered them a state-funded deal worth ‘tens of millions’, before helping secure a three-month price-fixing deal between CO2 producers and industry that will end on at midnight tonight.
CF Industries, which is headquartered in Illinois, insist they ‘continue to negotiate’ with their industrial gas customers to ‘extend CO2 offtake and pricing agreements’.
But Britain’s Food and Drink Federation (FDF) has said a new deal must be struck immediately to avert a 2022 crisis, at a time when the cost of living is also going through the roof.
‘We will continue to work with the government on this’, a spokesman said, adding: ‘It is critical that together we ensure supply can continue and that we build long-term resilience into the production of food-grade CO2’. A lack of Co2 will add further pressures to ‘families already coping with high food-price inflation’.
CO2 is used to stun animals for slaughter, package meat and also in refrigeration systems. It is also used in fizzy drinks, beer, cheese, fruit and vegetables and crumpets, among other items (empty shelves last September)
Business Secretary Kwasi Kwarteng (right) persuaded millionaire CF Industries chief executive Tony Will (left) pictured, to restart production at fertiliser plants that produce 60% of the UK’s CO2 supplies, but had to offer a taxpayer-funded sweetener to get them going again. The deal expires tonight
Oatly ads BANNED over misleading environmental boast that ditching dairy is good for the planet
Two TV ads claimed: ‘Oatly generates 73 per cent less CO2e (carbon dioxide equivalent) vs milk, calculated from grower to grocer’
The UK’s advertising watchdog has banned a high-profile marketing campaign by oat milk company Oatly after ruling its green claims were ‘misleading’.
The Advertising Standards Authority (ASA) launched an investigation into the campaign after receiving 109 complaints, including from environmental group A Greener World.
In one national newspaper ad, the Swedish alt-milk brand claimed: ‘Climate experts say cutting dairy and meat products from our diets is the single biggest lifestyle change we can make to reduce our environmental impact’.
The ASA ruled that consumers would understand the claim to be a ‘definitive, objective claim that was based on scientific consensus’, when in fact it was the opinion of one climate expert.
Oatly claimed that following a vegan diet would reduce a person’s environmental impact more than cutting down their flights, purchasing an electric car, or buying sustainable meat and dairy.
In paid-for ads on Twitter and Facebook, the company insisted the ‘dairy and meat industries emit more CO2 than all the world’s planes, trains, cars, boats etc, combined’.
However, the advertising watchdog found Oatley had ‘overstated’ the emissions of the meat and dairy industry because the company did not take into account emissions covering the full life cycle of transport.
Oatly said it had no plans to repeat the claim and removed posts making similar claims from its own social media channels.
Two TV ads claimed: ‘Oatly generates 73 per cent less CO2e (carbon dioxide equivalent) vs milk, calculated from grower to grocer’.
‘We are continuing to work closely with both the hospitality and food and drink industries, and do not expect any significant disruption to essential food supplies,’ a spokesman from the Department for Business, Energy and Industrial Strategy said.
Industry leaders had warned that another shortage could bring the entire meat processing system to a halt.
Nick Allen, chief exec of British Meat Processors Association said: ‘Our members have been assured, along with the NHS and the nuclear power industry, that animal welfare will be prioritised, so from a meat perspective we have to take that assurance that actually we will be prioritised, and we won’t have problems.
‘But we had a meeting the other day we heard there will be tremendous impact across the brewery industry, soft drinks industry. CO2 is really widely used so if the deal isn’t struck between CF Industries and the suppliers then somewhere there’s going to be some problems, it’s going to be a bit of a bun fight and prices will have to go up considerably.’
CF Industries were accused of holding the country ransom by closing and were blamed for plunging Britain into a crisis that threatened to force farmers to cull animals and leave supermarket shelves empty.
They stopped production in September and insisted it did not ‘have an estimate for when production will resume’.
A deal was struck a week later, said to be costing the taxpayer tens of millions of pounds.
The company has assets of $15 billion and is headquartered in Illinois. It is one of the biggest fertiliser firms in the world and was previously responsible for 25% of US fertilizer.
CF chief executive Tony Will, who was paid £7 million last year, previously shared photos of himself aboard an Egyptian billionaire’s yacht in St Tropez and enjoying a beer on a private jet, according to the Times. He made his Instagram account private shortly before news of the government’s agreement with CF Industries was made public.
Documents seen by The Mail on Sunday show that just a month before the deal was brokered, CF Industries said it would make a $65million (£47.4million) payment to its investors – who include chief executive Tony Will, who owns 488,789 shares.
The Government has warned companies will still need to accept CO2 costs increasing fivefold, from £200 a tonne to £1,000. Ministers are urging industry use the time to find ways around the current shortages, sparked by unprecedented rises in the natural gas market.
CF Industries employs thousands of employees in the US, Canada and the UK.
Around 400 staff are based at the firm’s Cheshire site, where a million tonnes of fertiliser are produced per year, supplying the grass and farming sectors.
It employs around 200 staff on Teesside, and has a supply chain estimated to be worth £500m a year to the region’s economy. Earlier this year, it was revealed the firm was ‘evaluating its options’ in the North East after being slapped with a bill for millions by Ofgem.
CEO Will joined the firm in 2007 before eventually becoming its chief in 2014.
Will was previously the senior vice president, manufacturing and distribution, which put him in charge of the annual production of 15 million tons of fertiliser, distributed through 70 locations.
He was previously Manager for The Boston Consulting Group, Inc., Chairman, President & Chief Executive Officer for Terra Nitrogen Co. LP, Vice President-Business Development at Sears, Roebuck & Co., Partner at Accenture Ltd. and Vice President-Strategy & Corporate Development at Fort James Corp.
Will received an undergraduate degree from Iowa State University and an MBA and a graduate degree from Kellogg School of Management.
The CF industries plant in Billingham, Teeside which the US firm closed amid rising gas prices
The CF Industries plant in Ince, Merseyside. Both plants together produce 60 per cent of the UK’s CO2
Source: Daily Mail