Price of pint to soar in new carbon dioxide supply crisis

The price of beer and bacon could be driven higher by a fresh carbon dioxide supply crisis.

The surging cost of CO2 will add £1.7 billion to the cost of British household grocery bills, according to the Energy and Climate Intelligence Unit.

The war in Ukraine has helped push up the price of a tonne of liquid carbon dioxide by 3,000pc in the last year – from £100 per tonne to as much as £3,000, the EICU said.

Carbon dioxide is used in a wide array of industries, but in particular food and drink, where it is used to add gas to beer and soft drinks.

It is also used to stun and kill animals such as chickens for slaughter as well as cool critical nuclear reactors and keep medicines cold.

Rising energy costs, accelerated by Putin’s war, have had heavy ramifications for industries reliant on carbon dioxide, with production also disrupted due to rampant inflation.

Businesses like pubs, farms and supermarkets are already paying far more for their gas than they did last year – a 71pc increase when comparing the first three months of 2022 to 2021.

Fay Jones, MP for Brecon and Radnorshire and chairman of the Farming APPG, said: “The price of gas is adding thousands of pounds to families’ energy bills. Now, like last autumn, it could affect supplies of CO2 and of fertilisers, and drive up the price of everything from beer to bacon.”

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It is feared that gas prices could rise even further, or supplies could be cut off, which would in turn push up the price of liquid carbon dioxide, or lead to a repeat of last year’s shortage.

In September 2021, soaring natural gas prices forced fertiliser companies to curb output, denting production of carbon dioxide as a by-product.

Matt Williams, of the ECIU, said the UK’s reliance on fossil fuels could “bring the food and drink system to its knees”.
He added: “Rising energy costs are creating an extra cost of hundreds of millions of pounds in the food and drink industry that customers may struggle to avoid.

“If high gas prices, or even blackouts, force factories to close it could create real problems for farmers and the food and drink industry.”

Kate Nicholls, of trade body UK Hospitality, said the industry was “typically seeing 18pc increases in food and drink”.

She added: “The most significant impact has been seen in carbon dioxide where sky-high energy bills have seen plant shutdowns forecast as gas prices make fertile production unviable and pushing carbon dioxide prices above 400pc.

“That has a knock-on effect on the cost and supply of a key component in food manufacturing and will see prices to hospitality and its customers increase further.

“It is a further indicator of why in the hospitality sector, energy support alone will not be enough to address the cost of doing business and more will be needed to insulate consumers from further inflationary price increases.”