In what has been described as the “worst supply situation to hit the European carbon dioxide (CO2) business in decades”, many consumers of CO2 - especially the carbonated drinks producers - are desperate for supplies of the product.
While the supply position tightened in April, driven by the “usual” turnaround of maintenance procedures in ammonia plants, the position started to become critical when other plants associated with bio-ethanol and chemical production were also shut down for maintenance or for technical issues.
All major suppliers of liquid CO2 have been affected by the raw gas sourcing issues – including Praxair, Messer, Linde and Air Liquide. Even ACP (recently acquired by Air Products) has been impacted by the downturn in CO2 output.
It appears that most of Northern and Continental Europe are struggling for product at this time – the position becoming worse just this weekend when two large and important plants went offline.
What is causing this situation? gasworld has been investigating.
Traditionally, one of the largest sources of food grade CO2 in Europe has been from ammonia plants. While in the past decade, other sources of CO2 have been invested in – including raw gas streams from chemical operations and bi-ethanol plants – ammonia still remains one of the largest sources, especially in Western Europe. Major ammonia plants exist in the UK, Norway, the Netherlands and in France.
However, ammonia is used in fertiliser production and the peak production output for fertilisers is generally from August to March or winter months. Fertiliser companies then plan maintenance or shutdowns in April through to June on a regular basis – but this is coincidently the peak time for production of soft and alcoholic drinks. What has compounded the situation this year is not only the timing of all the maintenance procedures, but that ammonia market prices have fallen to a low and imports are available from outside of Western Europe that has led to European producers prolonging the downtime of the ammonia plants within the region. Also due to the higher pricing of natural gas – a major raw material for ammonia production - the margins in the ammonia business are not that attractive as well.
Well-known brands of soft drinks manufacturers are struggling with production without CO2 and are desperate to obtain product. This weekend saw additional planned maintenance shut-downs in bio-ethanol plants and then one major source in Scandinavia went offline this past weekend. The position of the soft drinks industry has been compounded due to the recent heatwave to hit Europe, resulting in significant additional demand for soft drinks and carbonated beverages.
It appears the UK is hardest hit – with only one major CO2 plant operating as we go to press. Very reliant on imports from Scandinavia and also the Netherlands – the UK is doubly impacted in that there are limited movements across the Channel due to the plant shut-downs in the Benelux and France limiting product to ship.
gasworld spoke to Messer’s Senior Vice-President of Communications, Diana Buss, who stated, “As every year in summer, some of the European ammonia plants are not or partly in operation. In these repetitive situations, Messer tries to secure the customer supply by shifting product within Europe.”
Is there some good news on the horizon? Well, one company is railing CO2 from Poland to the Benelux and BASF’s large CO2 plant at Ludwigshafen has come back on stream. However, the shortage appears to be entrenched for the remainder of June at least. It appears that Southern Europe is facing less of a hardship but the distances from Spain and Italy to the Benelux/UK region is significant to move CO2.