Concerns of a carbon dioxide (CO2) shortage in the US have eased among brewers but some areas are still experiencing spot shortages, according to Chuck Skypeck, Technical Brewing Projects Manager at the Brewers Association.
Disruptions related to the coronavirus (Covid-19) pandemic have impacted the supply of food-grade CO2 and CO2 for soft drinks and beer after ethanol production plants were shut down due to a drop in fuel demand caused by the lockdown in March and April.
Carbon dioxide is captured as a by-product in ethanol production and some geographical areas in the US rely heavily on ethanol plants for their CO2.
At full capacity, ethanol plants capture 3 to 3.5 million tonnes of CO2 annually, roughly 40% of the US national supply, according to trade group Renewable Fuels Association (RFA).
At the lowest point, approximately 80 facilities were completely idle, while another 80 had substantially reduced their run rates, according to the RFA.
Skypeck says some members of the Brewers Association, a not-for-profit trade group dedicated to small and independent US brewers, have been put on allocation due to CO2 shortages and some are still on rations, with some experiencing price increases.
gasworld also understands that some US independent industrial gas distributors have also experienced being put on allocation and price rises during the pandemic.
“As a cautionary note, the way things change nothing surprise me anymore, but things have been looking better, after things looked pretty dire in March and April because ethanol production was down so much,” Skypeck told gasworld.
“CO2 doesn’t travel far from its source typically in the US so all of the shortages we have seen, where we have brewers go on allocation, where we have seen price increases, tend to be fairly regional in nature. For instance, along the Gulf Coast where most of the ethanol comes from petroleum production or natural sources, they didn’t experience any issues. In areas which are more dependent on CO2 from ethanol production we did see allocations and shortages. In some areas both allocations and shortages have been removed and it’s back to normal, in some areas not. The problem area that has continued to be is the Northeast where there is a large dependence upon one CO2-ethanol-producing facility that is still not up to capacity. We’re still seeing spot shortages but it’s not like it was in March and April.”
Skypeck said there was not a huge disruption felt by brewers during any tightening of supply, and the situation is improving generally as ethanol production steadily increases. US ethanol production rose nearly 2% for the week ending July 10, according to data released by the US Energy Information Administration (EIA), which was the 11th consecutive week of growth following sharp drops from late March into April.
Skypeck added, “Some breweries went on allocation, a lot of our smaller members said their sales were down correspondingly, so we didn’t see huge disruption from the CO2 shortage, it evened out. In talking to our members, it’s not forefront of their minds – they have plenty of other issues to deal with and a lot of them are dealing with social distancing on production lines, public facing roles.
“Allocation is still going on in some areas like the Northeast, on the West Coast where there is a fair dependence on ethanol, most of the plants have started up. It’s very regional in nature.”
Coronavirus cases have soared in most US states through June and July and any stay-at-home orders – shutdowns that close city centres and businesses – could trigger more ethanol plant shutdowns and impact on CO2 supply.
“We’re starting to see bars and restaurants close down again in lots of areas,” Skypeck told gasworld.
“Beverage use of CO2 in the US is about 14%, beer and soft drinks, the vast majority goes to food producers so restaurants reopening is going to have an effect on supply but proportionally not that big. There has been reduced demand so that has helped so it’s a factor but not that big a factor.”