A tightening in carbon dioxide (CO2) supply is beginning to hit the US beverage market, with one brewery stating that its supply has been cut for the foreseeable future.
In a recent Instagram post, Everett, Massachusetts-based Night Shift Brewing said it could be over a year until it gets more supply for its brewing operations.
This comes as gasworld earlier this month reported that some states were witnessing a tightening in supply due an apparent contamination in the raw gas.
As understood at the time, CO2 firms operating in liquefaction and purification were faced with a contaminated product and could not fully operate.
Fast forward to today, and it’s clear the situation is getting worse and affecting those who need CO2 to create and deliver their products to customers across the US and beyond.
CO2 is used widely in the food and beverage industry as a refrigerant and is also used in Modified Atmosphere Packaging (MAP) to improve shelf life and in carbonating drinks.
Dry ice (solid CO2) has increasingly been used to keep food frozen during home delivery, a trend that has boomed during the coronavirus pandemic.
As explained by Night Shift Brewing, “Breweries depend on CO2 to make beer, so this [the supply cut] was pretty awful news to get.”
“Seems like this will be an issue that impacts a lot of local breweries, so we’re probably one of many breweries facing this new threat to our business.”
Supply chain issues have been impacting a number of industries across the US for quite some time now, as a result of a variety of headwinds.
For Night Shift Brewing, this means that the company has had to move all of its brewing operations to Framingham’s Jack’s Abby and Pawtucket, R.I.’s The Guild Brewing Co.
“Fortunately, we have contract brewing relationships set up with @jacksabbycraftlagers and @guildri, who have both now offered to brew beer for us and help fill our immediate production gaps,” the company wrote in a post.
“Given both the immediate and long-term issues at Everett, we’ve made the decision to move the majority of our beer production to Jack’s Abby and IBG.”
Whilst this may seem like a lifeline for the brewery, it has big consequences. As explained by the firm, the CO2 shortage and other contributing factors could result in ‘one of the most heart-breaking circumstances to ever face business.’
Contamination and closures
Speaking to Sam Rushing, President of Advanced Cryogenics, earlier this month, gasworld heard that the situation has been underway for a few weeks.
He elaborated, “As I understand it, the once always reliable natural sources from firms are now finding contamination in the raw gas. This is a large part of the problem at present for the central thru middle part of the country.”
“All the raw gas sent to the CO2 firms for liquefaction and purification are faced with contaminated product; thus they cannot operate at this time.”
According to Higgins, a Meel Group company, there are a number of ways that CO2 can become contaminated by other compounds, such as oil and grease vapour, rust and pipe scale and plasticiser compounds.
Higgins highlights that failure to address contamination issues can leave a product at risk of bad tastes, strange odours, spoilage, and product recalls.
In addition to contamination issues, Rushing alluded to more typical ammonia plant challenges, adding, “I am also told the large CO2 supplies in Augusta, Georgia, sourced from ammonia production, are also unavailable at present due to a 60-day ammonia plant turnaround.”
Ammonia production is a key sourcing route for CO2 production. In fact, ammonia plants have traditionally been one a large sources of food-grade CO2 and while in the past decade other sources of CO2 have been invested in, including those raw gas streams from chemical operations and bioethanol plants, ammonia remains one of the largest sources.
Any shutdown in ammonia/fertiliser plants for an extended period naturally has an impact on the CO2 supply chain at some stage, as we have seen many times; CO2 shortages are almost an annual occurrence, as anyone in the industry knows.
Ammonia is a seasonal feedstock, with the peak production output for fertilisers generally from August to March, or during the winter months; hence why fertiliser companies often plan maintenance or shutdowns from April through to July.
Ammonia as a feedstock occupies a far greater share of the European sourcing pathways for CO2, with bioethanol a more dominant feedstock in the US, however such a fine tightrope of supply and demand means any disruptions to sourcing can have a significant impact.
Rushing added, “The longer this continues, the more difficult supplies will become. As to when it will be resolved, all I can say is that any time since the start of this contamination is too long; all of this leads to much higher prices, allocations, and significant shortages of product.”
gasworld has reached out to a number of players in the US CO2 market and hopes to provide you further insights as soon as possible.