September Market Update: CO2 Shortage

As a knock on effect of the huge hike in natural gas prices, two factories involved in the supply of CO2 for food production were forced to close in recent weeks. The closing of these two factories would have had a huge impact on food production, in particular where CO2 is used for the humane slaughter of livestock.

With other huge issues surrounding the food supply chain – including the driver shortage crisis – the Government has since stepped in to provide a short term solution to the problem. With Christmas on the horizon, the Government has stepped in to provide financial support (up to a maximum of £20 million) for the company to restart operations and ensure this critical product is not missing from the supply chain.

The announcement was made on 22 September, and with support expected to be in place for 3 weeks, we will be following this closely to see if this issue stabilises or whether there will be any further knock on effects that will affect the food supply chain in the lead up to the festive period.