How a previously under-the-radar commodity caused multiple industry shockwaves as supply problems hit.
Until this summer, a shortage of carbon dioxide was the last thing you would have expected to see in the headlines. But in June this year, just as the World Cup was reaching its climax, brewers, soft drinks companies and meat producers announced they were having production problems caused by just that – a CO2 shortage.
Odourless, colourless and slightly toxic, the gas is used for everything from carbonating drinks and prolonging the shelf life of bagged salads to stunning animals in slaughterhouses. Bakers Warburtons even had to temporarily halt its production of crumpets.
The shortage was directly caused by a drop in demand for ammonia, used in fertilisers. Despite its link to climate change, CO2 accounts for just 0.04% of the atmosphere. Revenues from selling the gas are usually moderate at best, and not enough to warrant stand-alone production. Therefore, most commercial CO2 is manufactured as a by-product of other industrial processes.
Those industrial processes where enough CO2 is produced to make it commercially viable to collect include the burning of fossil fuels, large-scale brewing and – importantly for Europe – the production of ammonia. Waste gas is captured and collected by firms that then purify it before it is distributed. This year the usual seasonal slowdown in the demand for ammonia was exacerbated by low prices for the chemical, causing production to drop as plants took time out for maintenance – and resulting in a fall in the supply of CO2.
Logistics and distribution issues in the UK may also have been to blame, with reports emerging that producers were struggling to collect and purify what CO2 was available. “For [CO2 producers] to say there is a global shortage of CO2 is complete tosh. They just haven’t sorted themselves out properly,” one disgruntled beverage manufacturer told The Grocer.
While some retailers are still reporting problems, supply has mostly stabilised. But the shortage does raise questions about how vulnerable the supply is to external shocks, and whether the CO2 industry is doing enough to keep up with demand.