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Britain’s food supply is now vulnerable after one of only two major fertiliser plants in the country shut down due to spiralling energy costs just months after receiving a taxpayer bailout. CF Industries will close its site at Ince, Chester, putting nearly 300 jobs at risk, after the price of natural gas made the plant unprofitable.
It has been shut since ministers intervened to prevent a supply crisis last year by handing CF Industries a subsidy worth tens of millions of pounds. The bailout enabled its Billingham plant to reopen in Teesside, which will now supply all its UK fertiliser output.
The American company produces 60pc of Britain’s CO2 as a by-product of fertiliser production, with the gas used in a staggering range of areas from food to the nuclear sector and NHS. The gas is required to stun animals for slaughter, package meat and also in refrigeration systems. It is also used in fizzy drinks, beer, cheese, fruit and vegetables and crumpets, among other items.
Last year the UK faced a CO2 ‘crisis’ after a 70 per cent rise in wholesale gas prices prompted the company to halt production. Nick Allen, chief executive of the British Meat Processors Association said Britain being reduced to just one plant left food supplies more vulnerable.
‘We’re assured by CF Industries that there will be no disruption to Co2 supplies to the meat industry, however the closure of one of only a handful of facilities in the UK means that future supplies will become somewhat less secure, particularly if something were to go wrong with the remaining plant at Billingham,’ he said. ‘We are becoming more dependent on individual points in the supply chain.’
The National Farmers’ Union (NFU) has warned that high fertiliser prices could discourage farmers from growing the wheat needed to make bread. Prices have risen to around £625 per ton compared to £200 per ton pre-Covid.
NFU Deputy President Tom Bradshaw said: ‘Today’s announcement from CF Fertiliser is a further blow for farmers who are already suffering from incredibly high inflation for fertiliser costs. ‘This closure confirms our fears that the Ince plant may be permanently shut down, having been temporarily closed since last September.
‘This comes at a time when costs and supply face unprecedented risk. This closure is likely to further restrict global supply and we are seeking urgent clarification from CF on the production capabilities of its remaining plant at Billingham.’
Jo Gilbertson, head of fertilisers at the Agricultural Industries Confederation, warned the closure could put further upward pressure on food prices. ‘This will affect all sorts of things. If we don’t have access to nitrogen fertilisers it affects everything from the cost of milk and meat products on the shelves to the price of bread because milling wheat needs the high protein level you get from nitrogen,’ she told the Telegraph.
‘Then you have to import grain and there’s a shortage of that because of the sanctions against Russia and the crisis in Ukraine.’
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A spokesman said: ‘We would like to emphasise that these proposals do not affect the ability of the business to supply CO2 to customers. CF Industries UK continues to provide CO2 exclusively from Billingham as it has since September 2021, and could continue to do so if these proposals are implemented.
‘The proposals would have no immediate effect on the availability of fertiliser in the UK, as the Ince manufacturing facility has not produced ammonia since September 2021. The Billingham facility has enough capacity to meet the demand for a fertiliser that the business had been serving from both plants, prior to the halt in operations in September 2021.
‘The purpose of the proposed restructuring is to position the UK business for long-term profitability and sustainability, and enable it to continue to supply fertiliser, carbon dioxide and other industrial products to domestic customers.’ The company has previously said there was ‘significant uncertainty’ over its two British sites.
A Business Department spokesman said: ‘The closure is a commercial decision for CF Fertiliser and it will not impact supplies of CO2. ‘The Government gave only limited financial support, for three weeks last year, to restart the Billingham plant. ‘Without intervention, the CO2 shortage could have severely impacted the food processing sector, the NHS and nuclear power generation.’ Source
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