Meat industry warns production could be hit by CO2 shortage
Britain’s meat industry is warning of a shortage of carbon dioxide gas without which the food manufacturing process could grind to a halt.
Representatives of the industry have been in emergency talks with the government over the crisis which is a knock-on effect of the Europe-wide surge in natural gas prices.
CO2 is used to stun animals before slaughter as well as for vacuum-packing meat products – but that CO2 is the by-product of the production of fertiliser.
The problem threatens to create a logjam of animals on farms
The spike in gas prices has prompted UK fertiliser factories to suspend or cut production.
That means there is now a 60% shortfall in Britain’s supply of CO2 – and the meat industry fears similar stoppages may be affecting plants in Europe that they would normally have turned to in an emergency.
The British Meat Processors Association (BMPA) said in a statement that the crisis looked set to be “a lot worse” than a previous CO2 shortage experienced in 2018.
“CO2 gas plays a critical and irreplaceable role in the food and drink manufacturing process and businesses can grind to a halt if they cannot secure an adequate supply,” the BMPA said.
“This means that, once their current stocks of the gas run out (estimated to be in less than 14 days) some companies will have to stop taking animals and close production lines, leading to a logjam of animals back to the farms.”
It adds to problems already being seen in the pig industry where farms have tens of thousands of surplus swine because of a shortage of workers at abattoirs – after many of them went home to eastern Europe.
Tighter CO2 supplies could mean production slowing down, the poultry industry said
A shortage in the vacuum-packing process, which adds up to five days’ shelf life to red meat and 14 days’ shelf life for poultry, threatens to pose additional problems – especially given that supply chains are already being gummed up by the shortage of HGV drivers.
Richard Griffiths, chief executive of the British Poultry Council, said: “With fewer than 100 days to go until Christmas, and already facing mounting labour shortages, the last thing British poultry production needs is more pressure.
“If CO2 supplies become tighter and more unpredictable then supply chains will have to slow down.
“Ultimately, no CO2 means no throughput.”
The crisis comes after the closures of fertiliser plants in Cheshire and Teesside owned by US company CF Industries as well as production cuts at ammonia factories across Europe operated by Norwegian company Yara including one in Hull.
BMPA chief executive Nick Allen said: “We’ve had zero warning of the planned closure of the fertiliser plants… and as a result, it’s plunged the industry into chaos.”
The BMPA said it had held talks with the government late on Thursday and they were ongoing.
A government spokesperson said: “We are monitoring this situation closely and are in regular contact with the food and farming organisations and industry, to help them manage the current situation.
“The UK benefits from having access to highly diverse sources of gas supply to ensure households, businesses and heavy industry get the energy they need at a fair price.”
Santander is to buy TSB, becoming the UK’s third biggest bank in the process.
Once completed, the combined bank will have the third-largest number of personal account balances in the UK, and be fourth in terms of mortgage lending, with a total of nearly 28 million customers, Santander said.
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The deal is still subject to approval by regulators and shareholders of TSB’s parent company, Banco Sabadell, but is expected to conclude in the first three months of 2026.
It could mean the TSB brand is no longer visible on the high street, as Santander said it “intends to integrate TSB in the Santander UK group”.
Job losses may also result.
Santander‘s interest in tabling a bid for TSB was first reported by Sky News.
TSB has five million customers, offers business and personal accounts, and is the UK’s tenth largest lender for mortgages and deposits. After cutting jobs and branches last year, it currently employs roughly 5,000 staff and operates 175 branches, the seventh largest network in the UK.
It comes just months after speculation that Santander would leave the UK market, despite denials from the Spanish-owned lender.
File pic: iStock
In recent months, it had rejected takeover attempts from rivals NatWest and Barclays.
Barclays had also bid for TSB.
Banco Sabadell said it was selling TSB “to focus our strategy on Spain”, its chief executive, Cesar Gonzalez-Bueno, said.
Santander has agreed to pay an initial £2.65bn for TSB, with the final price expected to rise to £2.9bn when yet-to-be-announced financial results are factored in.
The price is 1.5 times the value of TSB’s assets.
“This is an excellent deal for customers, combining two strong and complementary banks, creating one of the most substantial banks in the UK and materially enhancing the competitiveness of the industry,” said Mike Regnier, CEO of Santander UK.
A major component within household energy bills is set to rise sharply from next year to help pay for efforts to maintain energy security during the transition to green power.
The industry regulator Ofgem’s draft determination on how much it will allow network operators to charge energy suppliers from 1 April 2026 to 31 March 2031 would push up network costs within household bills by £24 a year.
These charges currently account for 22% of the total bill.
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The findings, which will be subject to consultation before a final determination by the end of the year, reflect demands on network operators to make power and gas networks fit for the future amid expansion in renewable and nuclear energy to meet net zero ambitions.
Ofgem says the plans it has given provisional approval for amount to a £24bn investment programme over the five-year term – a four-fold increase on current levels.
A total of 80 major projects includes upgrades to more than 2,700 miles of overhead power lines.
If rubber stamped as planned, the resulting network cost increases threaten further upwards pressure on bills from next April – a month that has now become synonymous with rising essential bills.
The watchdog revealed its plans as the 22 million British households on the energy price cap benefit from the first decline for a year.
It is coming down from an annual average £1,849 between April and June to £1,720 from July to September.
That’s on the back of easing wholesale costs seen during the spring – before the temporary surge in wholesale gas prices caused by the recent instability in the Middle East.
A new forecast released by industry specialist Cornwall Insight suggested households were on track to see a further, but slight, decline when the cap is adjusted again in October.
At the current level it is 28% lower than at the height of the energy-led cost of living crisis – but 10% higher than the same period last year.
The price cap does not limit total bills because householders still pay for the amount of energy they consume.
Ofgem is continuing to recommend consumers shop around for fixed rate deals in the market as they can offer savings compared with the price cap and shield homes from any price shocks seen within their fixed terms.
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Jonathan Brearley, the regulator’s chief executive, said: ”Britain’s reliance on imported gas has left us at the mercy of volatile international gas prices which during the energy crisis would have caused bills to rise as high as £4,000 for an average household without government support.
“Even today the price cap can move up or down by hundreds of pounds with little we can do about it.
“This record investment will deliver a homegrown energy system that is better for Britain and better for customers. It will ensure the system has greater resilience against shocks from volatile gas prices we don’t control.
“These 80 projects are a long-term insurance policy against threats to Britain’s energy security and the instability of prices. By bringing online dozens of homegrown, renewable generation sites and modernising our energy system to the one we will need in the future we can boost growth and give ourselves more control over prices too.
“Doing nothing is not an option and will cost consumers more – this is critical national infrastructure. The sooner we build the network we need, and invest to strengthen our resilience, the lower the cost for bill payers will be in the future.”
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