CF Industries Holdings Inc., Deerfield, Ill., is continuing to negotiate with its U.K. industrial gas customers to extend the carbon dioxide (CO2) offtake and pricing agreements agreed to in October, which are set to expire at the end of this month, a company spokesperson confirmed to Green Markets on Jan. 28.
Under the deal struck in October, the food and drink industry agreed to pay more for CO2from CF, which produces about 60 percent of the U.K.’s commercial supply of the byproduct gas (GM Oct. 15, 2021).
Soaring natural gas prices led CF to halt operations at both its Billingham and Ince, U.K., manufacturing complexes on Sept. 15 (GM Sept. 17, 2021). Production resumed at Billingham on Sept. 21 after the U.K. government stepped in with “limited” financial support for the company for three weeks, before facilitating the current deal with the industry (GM Sept. 24, 2021).
The restart did not include the Ince plant at Cheshire, but CF said in a third-quarter earnings call on Nov. 4 it aimed to bring the fertilizer operations at the closed Ince plant back online “in the next few weeks,” but would use brought-in ammonia (GM Nov. 5, 2021). It said producing ammonia at the facility would not make sense given the price of natural gas during the winter months. CF did not respond to Green Markets’ questions this week regarding the Ince plant.
CO2 is a by-product of the ammonia production process. The two CF plants produce an estimated 60 percent of the U.K.’s CO2 .
According to a Bloomberg report this week, the U.K.’s Department for Business, Energy, and Industry Strategy has said the government will not put up further cash, and it is for the CO2industry to ensure supplies to U.K. businesses.
CO2 is vital for many of the U.K.’s food processing and drink sectors. The gas is used in slaughter houses to stun pigs and chickens, for carbonating beer and soda, and extending the shelf life of fresh food, among other uses.
The gas is also used in the country’s hospitals and nuclear power industry, among others.
CF’s two U.K. plants largely produce ammonium nitrate and NPKs.