• British food industry demands action over CO2 shortage
Britain said yesterday that it could deal with soaring gas prices and would protect customers, after some small energy providers went bust and meat producers said their industry was threatened by the knock-on impact.
The business minister, Kwasi Kwarteng, said after meeting executives from National Grid, Centrica, EDF and the regulator Ofgem that he had been reassured that security of supply was not a cause for immediate concern.
He promised to work with industry to manage the problem.
A jump in energy prices has already forced several domestic energy suppliers out of business and has shut fertiliser plants that also produce carbon dioxide (CO2), used to stun animals before slaughter and prolong the shelf-life of meat.
Consumer groups and opposition politicians have warned that some customers and businesses will struggle to pay higher bills.
Kwarteng said that protecting customers during a time of higher prices is an absolute priority.
“Some energy companies are facing pressure,” he said on Twitter. “Ofgem has robust measures in place to ensure that customers do not need to worry, their needs are met, and their gas and electricity supply will continue uninterrupted if a supplier fails.”
He said that while the country had a diverse range of energy supplies, he would continue to meet with the industry today and tomorrow to discuss what more could be done.
Kwarteng added that the UK’s exposure to volatile global gas prices underscored the need to build more home-grown renewable options.
“Renewable energy has quadrupled since 2010, but there is more to do,” he said.
The government has been moved to act after low gas storage levels, decreased supplies from Russia, demand from Asia, low renewables output, and nuclear maintenance outages combined to send European gas prices to record highs after more than tripling this year.
Dermot Nolan, former head of Ofgem, told the BBC that he expected prices to stay high for up to four months and it was not clear what the government could do to affect market rates – meaning they will remain a focal point in the run-up to the COP26 climate conference in Scotland in November, where governments will seek to agree new rules to suppress emissions.
The food industry was the first to say it needed help.
The shortage of CO2, which is also used to put the fizz into beer, cider and soft drinks, comes when the food industry is already struggling with an acute shortage of truck drivers, which has been blamed on the impact of the coronavirus (Covid-19) pandemic and Brexit.
Nick Allen of the British Meat Processors Association said yesterday that the meat sector was two weeks away from hitting the buffers, while the British Poultry Council said its members were on a “knife-edge” as suppliers could only guarantee deliveries up to 24-hours in advance.
British Poultry Council head Richard Griffiths said he was working with the government to assess stock levels and implement contingency plans, but warned that food supply disruption could become a national security issue.
“Doing nothing is not an option,” Allen told Reuters, adding that given the exceptional circumstances, the government needed to either subsidise the power supply to maintain fertiliser production or source CO2 from elsewhere.
Were slaughterhouses to run out of CO2, the animals would be left on farms, creating additional animal welfare, food supply and food waste issues.
“We hope this can be avoided through swift government action,” British Poultry Council head Richard Griffiths said.
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