CF Industries Holdings Inc., Deerfield, Ill., on Sept. 21 confirmed plans to immediately restart the ammonia plant at its Billingham, U.K. complex at Teesside. On Sept. 15, CF announced it was halting operations at its Billingham and Ince, U.K., manufacturing plants in response to high natural gas prices (GM Sept. 17, p. 1).

The restart follows an interim agreement with the U.K. government reached on Sept. 21 to cover the costs of the restart. “We want to thank The Honorable Kwasi Kwarteng, Secretary of State for Business, Energy, and Industrial Strategy, and his entire staff for working tirelessly to bring about this agreement enabling restart of the plant and averting a potential CO2 supply disruption impacting many industries, including food and beverage availability to U.K. consumers,” said Tony Will, CF President and CEO. “We look forward to working with Secretary Kwarteng and the U.K. government on developing a longer-term solution, including the development of alternative suppliers of CO2 for the U.K. market.”

CO2 is a byproduct of the ammonia production process. CF said safely restarting the ammonia plant at the Billingham is expected to take several days. The restart did not include the Ince plant at Cheshire.

The two CF plants produce an estimated 60 percent of the U.K.’s CO2_.

U.K. officials on Sept. 21 agreed to give “limited financial support” for three weeks that would give the CO2 market time to adapt to higher global prices. “We need the market to adjust,” Environment Secretary George Eustice told Sky News. “The food industry knows that there’s going to be a sharp rise in the cost of carbon dioxide, probably going from 200 pounds ($273) a metric ton, eventually closer to 1,000 pounds.”

Eustice explained to the Guardian that part of the problem was that when CF made its announcement, two other CO2 providers to the U.K. market, one in the U.K. and one in Norway, were both down for maintenance. He said that once these two plants are back up and running, there should be a properly functioning normal market.

In the meantime, Yara International ASA, Oslo, which announced on Sept. 17 that it planned to curtail around 40 percent of its European ammonia production capacity within the next week, told Green Markets on Sept. 20 that it was sourcing ammonia from its plants in Australia, the U.S., and Trinidad to help cover for the production curtailments in Europe so it could maintain stable fertilizer production. The impact of the ammonia production curtailments in Europe on our fertilizer deliveries is currently minor,” a Yara spokesperson said.

Alexis Maxwell, Green Markets Director of Research, said that with European natural gas prices at $25.00/mmBtu, ammonia prices have a firm cash cost of production floor at $825/mt. She added that Yara has a 270,000 mt/y ammonia plant in Trinidad that it recently closed due to low prices (GM Nov. 15, 2019), that it might consider bringing back up.

Norway, which supplies just under one-third of the U.K.’s gas, on Sept. 20 said it would increase natural gas exports to Europe, according to the National Post.

The U.K. also got good news last week from its National Weather Service (Met Office), which said starting Sept. 27 the country will see a shift in the weather, with strong winds that will ease the country’s dependence on natural gas to produce electricity.

Wind speeds have been unusually low this year, with some regions having the lowest average pace in 20 years this summer, according to the Met Office. The calm weather came at a bad time, when gas prices surged as the economy began to recover from COVID-19. The Met Office said recent wind speeds boosted power generation on Sept. 23 to the highest level since May.

More European ammonia plants have been going offline due to the higher gas prices. Ukrainian state-run ammonia producer Odesky Pryportovyi Zavod decided to halt production on Sept. 22, according to Bloomberg. Lithuania’s nitrogen fertilizer manufacturer, Achema, expects to keep one of its two ammonia units offline after the completion of its summer maintenance program, according to NewsBase.

Vienna-based Borealis AG is the latest producer to curtail its production of ammonia in Europe. A company spokesperson on Sept. 23 confirmed that Borealis had reduced its production of ammonia and said it will “further analyze the situation” regarding its plants in Austria, France, and the Netherlands. The spokesperson declined to comment further at this point in time, including on the potential impact on the company’s downstream production.

In the meantime, China is having its own energy crisis. Soybean processing plants in a northeastern Chinese city have been ordered to shut down for at least a week, the latest fallout from Beijing’s moves to cut energy consumption and secure dwindling power supplies, according to a Sept. 24 Bloomberg report.

Plants in the coastal metropolis of Tianjin stopped operations earlier in the week and may not resume production until next month, according to people familiar with the matter. The units have a combined soy processing capacity of about 25,000 tons a day, and Tianjin is one of the country’s crushing hubs.

Some of the plants, including those operated by top agricultural traders Louis Dreyfus Co. and Bunge Ltd., had to suddenly stop after the government cut power supplies, sources said, asking not to be identified as the information is private. They added that this is the first time all the plants have ever been told to shut down completely.

Louis Dreyfus declined to comment, while media representatives for U.S.-based Bunge did not immediately return emails seeking comment.

The shutdowns are another sign of how a severe power crisis in China is roiling commodities from aluminum to steel to now food. Industries across the country have seen their power supplies curbed in the last few weeks over pressure to lower energy use and suppress emissions, and also on fears that surging global energy prices and dwindling coal supplies at home will worsen a power crunch.

China’s top economic planner earlier this week warned that the industry must ensure skyrocketing energy prices don’t raise the cost of fertilizer, which is crucial for food production. Urea futures have soared, tracking a rally in coal.

More than 10 provinces, including industrial powerhouses Jiangsu, Zhejiang, and Guangdong, are rationing electricity and forcing cuts to factory production amid power supply issues and a push to enforce environmental regulations.

The crushing plants convert soybeans into edible oil, used in cooking, as well as meal to produce animal feed. China is the world’s biggest soybean importer and buys large volumes from countries including Brazil, Argentina, and the U.S.