The UK’s food supply is now ‘vulnerable’ after one of the country’s only two large fertiliser facilities closed owing to rising energy costs just months after obtaining a taxpayer bailout.
After the price of natural gas made the plant unprofitable, CF Industries will close its Ince, Chester, facility, putting roughly 300 jobs at jeopardy.
It has been closed since last year, when ministers intervened to prevent a supply crisis by granting CF Industries a tens of millions of pounds subsidy. The rescue allowed the company to reopen its Billingham factory in Teesside, which will now supply all of its UK fertilizer output.
As a by-product of fertiliser manufacture, the American corporation generates 60% of Britain’s CO2, which is used in a wide range of applications, from food to nuclear power and the NHS.
The gas is used to shock animals in preparation for slaughter, to package meat, and in refrigeration systems. Fizzy drinks, beer, cheese, fruits and vegetables, and crumpets, among other things, contain it.
Last year, the UK faced a CO2 “crisis” as a result of a 70% increase in wholesale gas costs, which forced the corporation to suspend operations.
The British Meat Processors Association’s chief executive, Nick Allen, claimed that reducing Britain to only one factory made food supply more ‘vulnerable.’
‘We’ve been informed by CF Industries that Co2 supplies to the meat sector will not be disrupted, but the closing of one of just a handful of facilities in the UK means that future supplies will be less secure, particularly if something goes wrong with the last plant at Billingham,’ he said.
‘We’re growing increasingly reliant on specific supply chain nodes.’
The National Farmers’ Union (NFU) has warned that high fertiliser prices could dissuade farmers from growing the wheat needed to make bread. Pre-Covid, prices were around £200 per ton, but now they’re around £625 per ton.
‘Today’s news from CF Fertiliser is an additional blow for farmers who are already suffering from extraordinarily high fertiliser inflation,’ said NFU Deputy President Tom Bradshaw.
‘This closure reinforces our suspicions that the Ince factory, which has been closed indefinitely since September, would be permanently shut down.’
‘This comes at a time when supplies and costs are at an all-time high. We are requesting urgent clarity from CF on the production capacity of its remaining plant at Billingham, as this closure is expected to further constrain global supplies.’
The Agricultural Industries Confederation’s head of fertilisers, Jo Gilbertson, warned that the shutdown might put more upward pressure on food prices.
“This will have a wide range of consequences.” If we don’t have access to nitrogen fertilisers, it has an impact on everything from the price of milk and meat goods on the shelves to the price of bread, because milling wheat requires a high protein content, which nitrogen provides,’ she told the Telegraph.
‘Then you have to import grain, which is in short supply due to the Ukraine conflict.’
‘We would want to emphasize that these plans have no impact on the company’s ability to supply CO2 to clients,’ a spokesman said. CF Industries UK has been supplying CO2 entirely from Billingham since September 2021, and it may do so again if these ideas are implemented.
‘The proposals would have no immediate impact on fertiliser availability in the UK because the Ince manufacturing site hasn’t produced ammonia since September 2021.’ Prior to the halt in operations in September 2021, the Billingham site had the capacity to supply the demand for fertiliser that the company had been serving from both plants.
‘The planned restructure aims to position the UK firm for long-term profitability and sustainability, allowing it to continue to supply domestic clients with fertiliser, carbon dioxide, and other industrial products.’
The corporation previously stated that its two British sites were subject to “substantial uncertainty.”
‘The shutdown is a commercial choice for CF Fertiliser, and it will have no influence on CO2 supply,’ a representative for the Business Department said.
‘Last year, the government provided only little financial assistance to restart the Billingham facility for three weeks.
‘Without assistance, the CO2 shortage might have wreaked havoc on the food processing industry, the NHS, and nuclear power generation,’ says the report.