Fizzling out: a shortage of carbon dioxide hits U.K. food and drink industry

The irony is almost perfect: a chemical that threatens the planet because of its overabundance in the atmosphere is in dangerously short supply as a commodity.

Shortages of industrial carbon dioxide have emerged periodically over the last couple of years, but the problem has blown up again in Europe, largely due to the war in Ukraine and President Vladimir Putin's decision to cut supplies of natural gas to Europe, which sent the price of that fuel soaring.

"A lot of CO2 is made, as a by-product, in large factories that make chemical fertilizer and these factories use a lot of natural gas, both as an energy source and a raw material," explained Matt Williams, Climate and Land Programme Lead at the Energy and Climate Intelligence Unit, a British think tank. "Several factories across Europe that make both fertilizer and liquid CO2 have either shut down entirely, or reduced their production significantly."

In the U.K., this is having a big impact on food and drink businesses. Nick Allen, CEO of the British Meat Processors Association, said the U.K. meat industry depends on plentiful supplies of CO2.

"It's extremely important in the pig sector. It's the only way we can humanely stun and slaughter pigs," Allen said. "And it's used for the same reason in the poultry sector."

CO2 is also injected into the packaging of many perishable foods to inhibit the growth of bacteria and prolong a product's shelf life. And, as Emma McClarkin, Chief Executive of the British Beer and Pub Association pointed out, the chemical is pretty critical for her industry too.

"To brew beer, to store it correctly and also in the dispensing and serving, it is absolutely fundamental," she said.

Strong demand for a product that's in short supply can only mean one thing: the cost will rise. According to analysis by the Energy and Climate Intelligence Unit, the price of CO2 in the U.K. has leapt over the past 15 months by a staggering 3000%.

"That suggests to us that the extra bill for the food and drink industry this year could be 1.7 billion pounds ( around $1.9 billion)," said the ECIU's Matt Williams. "That must feed through into retail prices eventually."

Meat industry spokesman Allen said that along with the higher cost of energy, the extra burden of much more expensive CO2 was proving "eyewatering."

"The meat industry at the moment is trading in some of the most difficult circumstances most of our members have ever known," he said.

The same goes for the pub and brewing trade, according to McClarkin.

"The cost of doing business is getting worse and worse, harder and harder. So we really, really have the perfect storm with energy prices up, and now the rising cost of CO2 and not having security in our supply chain. We’ve been desperately trying to rein in our costs but, unfortunately, we may see the price of beer going up as a result," she said.

There is a silver lining, however. The soaring price of CO2 has made the business of capturing the gas and turning it into a marketable product much more profitable. Meat industry spokesman Nick Allen said a number of manufacturers have contacted him to discuss the possibility of trapping and selling their CO2 emissions. Allen believes a climate-friendly solution to the problem facing the food and drink industry could be on its way – although it may take 18 months or more to arrive.

There's a lot happening in the world. Through it all, Marketplace is here for you.

You rely on Marketplace to break down the world's events and tell you how it affects you in a fact-based, approachable way. We rely on your financial support to keep making that possible.

Your donation today powers the independent journalism that you rely on. For just $5/month, you can help sustain Marketplace so we can keep reporting on the things that matter to you.