Prices for CO2 are on the rise again as the European heatwave pushes up demand, but food and drink suppliers are unlikely to encounter the same shortages of gas that crippled the sector in 2018, experts suggest.
Italian prices for CO2 currently sit at €2,710 per metric tonne, according to Mintec, up 6% on this time last year. However, there are no reports of serious shortages, with supply currently meeting demand across Europe, says Rabobank senior beverages analyst Francois Sonneville.
While the UK food and beverage industry is unlikely to experience the same shortage of food-grade CO2 that caused havoc across Europe last June, however, the vulnerabilities that precipitated last year’s crisis still exist, he warns.
Commercial CO2 is sourced from industries that have a high-volume CO2-rich gas stream as a by-product - such as ammonia and hydrogen production from natural gas.
Last year, the combination of high demand around the World Cup, low production due to factory closures for maintenance, and a power outage at an Air Liquide plant in Cheshire dramatically reduced availability of the gas.
In a report published on the crisis in April 2019, the FDF warned of a “structural weakness” in the UK’s CO2 supply chain that needed to be addressed if shortages were to ‘be avoided in the future’.
Major gas suppliers and food giants such as Coca-Cola have since invested in new carbon capture techniques, says Sonneville, but smaller companies are unlikely to follow suit due to the vast expense and risk involved.
“The large players are willing to invest in alternatives which do not lead to immediate returns,” he adds. “The smaller players are waiting for technology to come up with an alternative means of supply.”