CO2 industry strikes deal to prevent shortages

A fresh deal has been struck to keep supplies of vital industrial-grade carbon dioxide flowing by keeping a key production site open.

When CF Industries' plant at Billingham shut briefly last year, it caused a crisis, threatening CO2 supplies to the food, medical and nuclear sectors.

At the time, the firm said high natural gas prices made the plant unviable.

A three-month deal allowing it to continue operating expired on Monday.

But the government said major CO2 users had now reached a new agreement with CF Industries.

Details of the deal have not been disclosed, but the BBC understands it will last until at least spring and come at no cost to the taxpayer.

"The carbon dioxide industry has come to an agreement to ensure UK businesses have access to a sustainable supply of CO2 - an essential component of the national economy," the business department said in a statement.

"The deal will enable CF Fertilisers' Billingham plant to continue to operate while global gas prices remain high. It means key sectors, including food processing and nuclear power, are ensured supplies of CO2."

In September, government provided financial support to reopen Billingham. A deal was then struck between CF Industries and its customers to keep the plant open for three months without further subsidies.

The Food and Drink Federation had warned that without an extension of that deal, CO2 supplies could be interrupted, leading to food shortages on shelves.

The UK continues to face soaring wholesale gas prices which have driven up costs for businesses and households.

Ammonia prices are currently at a record high, nearly double the level seen in September.