Norway’s capital Oslo is introducing a water ban, UK food wholesaler Bookers’ is rationing beer and cider, Coca-Cola said it had “temporarily paused” some of its production lines for short periods and major Scottish abattoir Quality Pork Limited has suspended operations.
These are just four of the areas experiencing problems as a result of the severe carbon dioxide (CO2) supply shortage affecting Europe, and now Mexico.
For the first time in 22 years, the Water and Wastewater Administration in Oslo is introducing water restrictions. The shortage has affected the delivery of CO2 to the treatment plants and CO2 is essential in the water purification process.
According to leading Norway newspaper Aftenposten, Oslo has introduced a ban to horticulture and has asked the municipality to limit water consumption as much as possible. The situation has become so critical that Oslo has launched the reservoir.
British bakery firm Warburtons, who is the UK’s largest producer of crumpets, has been forced to suspend operations at two of its four production sites because it has run out of CO2, which is used in the packaging to keep the products fresh.
Somerset cider-maker Thatchers announced it would be “curtailing production” until they received another delivery of CO2 next week.
Last week, the makers of Heineken’s John Smith’s Extra Smooth and Amstel said supplies had been affected.
But, in a statement, soft drinks manufacturer Coca-Cola said the shortage has not yet disrupted its supply.
“We are currently responding to an industry-wide issue that is impacting the supply of C02 in the UK. Our focus is on limiting the effect this may have on the availability of our products.”
“During this time we temporarily paused some of our production lines for short periods, however there has been no disruption to supply to date and we are continuing to fulfil orders to our customers.”
“We are working closely with our suppliers, partners and customers on a number of solutions as the situation develops.”
Scotland’s largest pig processing plant Quality Pork Limited announced yesterday it was shutting down its abattoir.
Andy McGowen, Chief Executive of Scottish Pig Producers, told the Jeremy Vine show on BBC Radio 2 yesterday that CO2 is the most humane way of stunning the pigs before they go into the slaughter process.
He told Jeremy Vine, “We’re shutting the plant this afternoon because we have no CO2 and it’ll stay shut until we get a delivery. Above all else, animal welfare is vital for us so if we can’t stun the pigs in an appropriate way we won’t operate at all.”
Booker’s, owned by British multinational grocery and general merchandise retailer Tesco, said in a statement it was experiencing supply issues on soft drinks and beer as a result of the international shortage of CO2.
“We are currently working hard with our suppliers to minimise the impact for our customers and cannot comment further at this stage.”
gasworld first broke the news – described as the “worst supply situation to hit the European CO2 business in decades” – last week.
CO2 Supply Update – UK: There are five major sources of CO2 within the UK in which the main gas companies have liquid CO2 production facilities. Over the past month – only two of these sources have been operational – the two plants near Manchester. We now understand that the two major sources in Teesside (which coincidently are the two largest plants in the UK) are being restarted this week/weekend, following routine maintenance and technical issues. It takes 24 to 48 hours following those plant restarts to get quality liquid CO2 to market.
At the same time, there has been a slight improvement in supply in Northern Europe, resulting in two sea-going barge tankers delivering liquid CO2 to the UK import terminals in the past four days.
While a number of end-users such as abattoirs and bottlers have been impacted and also critical of the gas suppliers, the liquid CO2 producers have been desperately trying to supply product from the limited sources they have had over the past 10 days. The main problem is that they are reliant on the owners of the chemical, bio-ethanol and ammonia plants to be operational in order to gain access to the raw CO2 gas. If these plants are not operating then there is simply no raw CO2 to purify and liquefy and hence the supply crunch.
Supply Update – Europe: It appears that a number of plants are beginning to ramp up production in North West Europe. One major plant in the North, that experienced technical issues at the beginning of last week is expected online mid-July. This would be an additional source of liquid to the European supply structure – including the UK.
Commenting on the crisis on various radio interviews – gasworld CEO and Publisher John Raquet believes that there is ”light very much at the end of the tunnel” and that abattoirs, bottling plants and breweries should see an improvement in supply early next week.
“Clearly, there will be a backlog of processing to catch up with and that will take some time – especially within the all important abattoirs – but they should see product deliveries next week,” he said.
Jennifer Willis-Jones, CRU Fertilizer Week’s Senior Editor, told gasworld, “CO2 is a by-product of ammonia production. The amount of CO2 emitted will change depending on the feedstock used in production. “In Europe natural gas is the central feedstock.”
“Static ammonia prices at low levels in recent months combined with rising natural gas costs across Europe have prompted a handful of prolonged plant closures following planned summer maintenance programmes. This means less CO2 as a by-product.”
“There is uncertainty regarding restart dates for ammonia plants. This is because ammonia prices are not forecast to firm significantly over the summer months given increases in ammonia capacity across the globe and stagnant demand. It could be that producers of downstream fertilisers are left with little choice but to purchase spot cargoes from the international market, pushing up prices and perhaps encouraging those ammonia producers who have curtailed production to restart. That would of course boost CO2 levels but at present the production situation is unclear.”
gasworld also revealed this morning that Mexico is the latest country to be affected by a CO2 shortage. The problem has been described as “significant” and is in part borne out of similar issues being experienced in Europe – a problem with the ammonia plants and production reliability – which is the main source of CO2 in Mexico. However, the difference here is the cost and reliability of natural gas supplies to the ammonia plants.
gasworld aims to keep you updated as and when the situation changes.