The CO2 crisis looks set to get worse before it gets better after one of only three gas plants currently operating in the UK ceased production due to a power outage.
In a letter sent to customers and seen by The Grocer, Air Liquide UK, which supplies CO2 from a facility at Ince, Cheshire, said its gas supply situation had now “worsened significantly” due to a “sudden and unexpected power outage which affected large parts of Cheshire, including our CO2 facility”.
The outage meant the raw gas feed into the supplier’s plant had ceased, it said, meaning it was “unable to produce liquid CO2 at this facility”.
With its reserve stocks “severely depleted” by the existing shortages of bulk liquid CO2 in the UK, Air Liquide declared “force majuere” with effect from today, meaning it can disregard any existing supply arrangement.
The company said it would now put in place an emergency allocation programme, which meant customers should continue to receive some supplies, albeit at a lower level than normal.
If customers needed additional supplies the company said it would look to obtain them from alternative sources, including mainland Europe. However, it warned this would be “outside the scope of our normal contract commitments” and would incur a cost of £225 per tonne (excluding VAT), in addition to any contracted rate.
Air Liquide said the measures would remain in place whilst it was subject to the “force majeure situation”. Suppliers have told The Grocer the halt in CO2 production could last up to a week.
Local media in Cheshire reported a grass blaze in nearby Frodsham last night which knocked out a power substation transformer.
It is understood the issues at Air Liquide’s plant means only two other plants - one in Manchester and another in Billingham, County Durham - remain in production, with the Billingham plant only coming back online yesterday.
It comes as The Grocer yesterday reported retailers and food manufacturers were facing at least two more weeks of supply disruption, with Asda limiting online orders of soft drinks over the weekend, while Morrisons had run out of a host of soft drink SKUs on its website.
The meat sector is also warning of ongoing difficulties sourcing CO2, with the British Meat Processors Association warning supplies of the gas would take time to filter through the supply chain. The British Poultry Council, meanwhile, has warned its members were in a “cycle of repeating uncertainty”.
Responding to news that Air Liquide’s plant had ceased production of the gas, BPC CEO Richard Griffiths said it was “frustrating” the sector now had to face more uncertainty over the supply of CO2.
“However, our contingency plans are in place and the poultrymeat sector is working hard with government departments to keep the food supply chain moving. With this development it is worth reiterating the need to prioritise supplies to those sectors dealing with animals.”
A spokeswoman for Air Liquide said that while its own CO2 supply situation had “worsened”, this was a “temporary” situation and did not “reflect the overall UK CO2 market situation”.