CF Fertilisers to up CO2 prices as taxpayer support ends

The UK’s main carbon dioxide producer is to hike its prices in a government-brokered deal, it was announced on Monday.

CF Fertilisers, owned by New York-listed CF Industries, announced in September that it was temporarily shuttering two plants because of soaring wholesale gas prices. The plants make fertilisers, but also produce CO2 as a side-product, which is sold on to a wide range of industries, from food and drink processing to nuclear power.

CF Fertilisers produces around 60% of the UK's commercial CO2 requirements.

Faced with a CO2 shortage, the government stepped in and brokered a three-week deal to enable CF Industries to restart the plants. It is thought to have involved tens of millions of pounds in subsidies.

But on Monday, the Department for Business, Energy and Industry Strategy said CO2 suppliers had now agreed to pay a price for the gas that will enable CF Fertilisers to continue operating while global gas prices remain high, without the need for subsidies.

Kwasi Kwarteng, business secretary, said: "Today’s agreement means that critical industries can have confidence in their supplies of CO2 over the coming months without further taxpayer support."

George Eustice, environment secretary, said: "The government has taken decisive action in these exceptional circumstances to allow a deal to be reached which will continue the supply of CO2 to businesses up and down the country."

The deal will remain in place until January 2022.