The U.K.’s carbon dioxide industry has come to an agreement with CF Industries Holding, Inc., Deerfield, Ill., to ensure a sustainable supply of CO2, the country’s Department for Business, Energy, and Industrial Strategy announced on Feb. 1. The existing agreement between CF and its industrial gas customers expired on Jan. 31 (GM Jan. 28, p. 29).
“The deal will enable CF Fertilisers’ Billingham plant in Teeside, northeast England, to continue to operate while global natural gas prices remain high. It means key sectors in the U.K., including food processing and nuclear power, are ensured supplies of CO2,” the business department said in a short media statement.
The new offtake and pricing deal with CF and its U.K. industrial gas customers, according to some U.K. media sources, could last until the spring. However, it is unclear if this is just conjecture on the basis that natural gas prices may ease with the onset of warmer weather.
CF has not commented publicly on the new agreement. A company spokesperson, in response to Green Markets’ inquiries,said only that “the Billingham complex remains operational and continues to sell CO2 on a contractual and spot basis.”
In its statement, the U.K. business department added: “In the longer term, the government would like to see the market take measures to improve resilience, and we are engaging on ways this could happen.”
CF first halted production of ammonia and CO2(a by-product of the ammonia production process) last September at its two U.K. manufacturing plants amid soaring natural gas prices, prompting fears of a CO2gas crisis in the U.K. last seen in 2018 (GM Sept. 17, 2021).
CF’s two U.K. plants – the other is at Ince, Cheshire – produce an estimated 60 percent of the U.K.’s commercial supply of the by-product gas.
After the government stepped in with a three-week financial bailout, CF restarted its Billingham plant on Sept. 21 (GM Sept. 24, 2021), and a subsequent fixed price agreement, brokered by the U.K. business department, was agreed to between CF and its U.K. CO2 customers on Oct. 11, running until the end of January (GM Oct. 15, 2021).
But CF has kept the Ince plant closed, and this week, once again, did not respond to GM’s enquiries about the company’s plans for the plant.
Back in early November, CF said it aimed to bring the fertilizer operations at Ince back online “in the next few weeks,” but would use brought-in ammonia (GM Nov. 5, 2021).
In addition to ammonia, CF’s two U.K. plants largely produce ammonium nitrate and NPKs.