THE Government is being urged by meat producers to step in to protect the food supply chain, after the sharp rise in gas prices resulted in a cut in the supply of carbon dioxide (CO2) to the industry, putting hundreds of North East jobs at risk.

Two large fertiliser plants in Teesside and Cheshire, which produce CO2 as a by-product, have shut as a result of the sudden hike in wholesale gas prices.

CF Industries, a leading global manufacturer of hydrogen and nitrogen products, said this week it is halting operations at its Billingham manufacturing complex as well as it site in Ince, Cheshire due to high natural gas prices.

It said "The Company does not have an estimate for when production will resume at the facilities."

British Meat Processors Association chief executive Nick Allen said CO2 is essential to both the humane slaughter of livestock and extending the shelf-life of products.

He told the BBC Radio 4 Today programme: “If we haven’t got the CO2 supplies, on the packaging side that reduces the shelf-life of products going on the shelves at a time when we are really struggling because of all the transport problems.

“This has come as a huge shock, it has happened so quickly. I think everyone is outraged in the industry that these fertiliser plants can shut down without any warning whatsoever and suddenly take something which is so essential to the food supply chain off-stream just like that.

“We really need Government to step in now and actually do something.”

Back in April, the company said its international competitiveness "continues to be undermined" by planned new charges for its use of the national gas pipeline system.

It is one of a number of gas-intensive chemical and energy companies on Teesside using only a few miles of the network, and being protected from the full cost by a tarrif discount. But Ofgem adjusted the tarrif, which CF said represented a six-fold rise.

The Northern Echo:

Meanwhile the Business Secretary said energy security is “an absolute priority” as he prepared to hold talks with industry representatives amid concerns about a rise in wholesale gas prices.

Kwasi Kwarteng will speak to chief executives from energy suppliers and operators to discuss the extent of the impact of surging prices.

The rise has been blamed on high global demand, maintenance issues and lower solar and wind energy output.

A former head of the regulator Ofgem warned Britain is likely to face high energy prices for the rest of the year.

Dermot Nolan, a former Ofgem chief executive, said the increases were the result of depleted stocks following a cold winter last winter, reduced supply from Russia, and increased demand for liquefied natural gas from the Far East.

He told the BBC Radio 4 Today programme: “It is not obvious to me what can be done in the very short run. Britain does have secure relatively diverse sources of gas, so I think the lights will stay on.

“But I am afraid it is likely in my view that high gas and high electricity prices will be sustained for the next three to four months.

“It is very difficult to see what the Government can do directly in this regard.”

Mr Kwarteng tweeted: “Today, I’ll be speaking to chief executives of the UK’s largest energy suppliers + operators to discuss the global gas situation.

“Britain has a diverse range of gas supply sources, with sufficient capacity to more than meet demand.

“We do not expect supply emergencies this winter.

“Energy security is an absolute priority. We are working closely with @ofgem and gas operators to monitor supply and demand.”

It is understood Mr Kwarteng has meetings on Saturday with senior executives from Ofgem, Centrica, National Grid, Energy UK, Octopus, Ovo, SSE, EDF, ScottishPower, Shell Energy, E.ON, Bulb and SGN.

OGUK Energy Policy Manager Will Webster said: “This price surge shows how we continue to need  UK gas. Letting  production fall faster than we can reduce demand risks leaving us increasingly dependent on other countries, and at the mercy of global events over which we have no control.

“While the UK continues to use oil and gas, we should make the most of the resources in our control while working for a low-carbon future.” 

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