UK natural gas futures have increased nearly fourfold since April, according to data from the Intercontinental Exchange. Prices for gas are also rising sharply elsewhere in Europe, due to depleted stocks, competition with Asia for liquified natural gas and low supplies from Russia.
Food supply ‘fragility’
The arrangement with CF Industries will cost UK taxpayers “many millions of pounds,” according to environment secretary George Eustice. Without government intervention there would have been a risk to Britain’s food supply chain, Eustice told the BBC on Wednesday.
He said he believed that the increased cost of CO2 was unlikely to lead to higher food prices, which are already rising due to higher global commodity price inflation and pressure on wages linked to worker shortages.
The National Pig Association (NPA) said last week that its members were facing their biggest crisis in two decades as a result of labor shortages tied to Brexit and the pandemic.
A dearth of truck drivers and slaughterhouse staff meant that pig farms were running out of space to house their herds and were two weeks away from having to cull animals, the association’s chief executive Zoe Davies told ITV News on Monday.
“Many EU workers have gone home due to a combination of new Brexit restrictions and Covid and are unlikely to return,” the NPA said in a statement last week. Meat processing plants say that efforts to recruit labor domestically have been insufficient to fill “thousands of vacancies across their sites,” according to the NPA.
The looming CO2 shortage “highlighted starkly the fragility in the [cibo] catena di fornitura,” National Farmers’ Union president Minette Batters said in a statement on Tuesday.
“Users of carbon dioxide were given little to no warning that supplies were going to be cut off — an indication of market failure in a sector supporting our critical national infrastructure,” lei ha aggiunto.
CF Industries CEO, Tony Will said the company will work with the UK government to develop a “longer-term solution” to constrained CO2 supply.