LONDON, March 26 (Reuters) - Britain said on Thursday it would provide 100 million pounds ($133.5 million) to restart production of biogenic carbon dioxide at a shuttered plant on Teesside for three
UK Provides Emergency Funding to Restart CO2 Production at Teesside Plant
Government Response to CO2 Supply Crisis
Emergency Funding Announcement
LONDON, March 26 (Reuters) - Britain said on Thursday it would provide 100 million pounds ($133.5 million) to restart production of biogenic carbon dioxide at a shuttered plant on Teesside for three months to avert any shortages caused by the Iran war.
Background on CO2 Production at Teesside
Closure Due to Market Competition
CO2 was manufactured by Ensus as a byproduct of bioethanol at the Wilton International site until September, when the plant was unable to compete with lower-cost U.S. bioethanol imports after tariffs were cut in a deal agreed with U.S. President Donald Trump.
Importance of CO2 Across Industries
The gas is vital in food and drinks manufacturing, and has many other uses across the economy from operating theatres in hospitals to cooling nuclear reactors.
Factors Leading to Supply Risk
Disruptions in European Supply
The government said disruptions to European fertiliser production had significantly reduced the reliability of CO2 imports, and rising gas prices driven by the Iran conflict, plus unplanned maintenance at several European CO2 producing sites, meant that British supply was at risk.
Government and Industry Reactions
Official Statements
Business Secretary's Comments
Business Secretary Peter Kyle said the government was acting to protect British businesses from the worst impacts of global uncertainty.
"By restarting this plant we've acted swiftly to boost the resilience of our supply chains and protect critical UK sectors like food production, water and healthcare, as well as the jobs and communities that depend on these industries," he said.
Ensus UK Chairman's Statement
Ensus UK Chairman Grant Pearson said the agreement strengthened Britain's resilience in biogenic CO2 supplies.
"We hope to have the plant back in full operation soon," he said.
About Ensus and the Teesside Plant
Company Background
Ensus, which has had operations on Teesside in northeast England, since 2010, is owned by CropEnergies, part of Sudzucker Group.
Production Process and Output
The plant uses distillation and fermentation to convert more than 1 million tonnes of wheat a year into 400 million litres of bioethanol, which is used to make petrol more sustainable.
The process has two by-products: high protein animal feed and carbon dioxide, with a capacity for the latter of 250,000 tonnes annually.
Additional Information
($1 = 0.7490 pounds)
(Reporting by Paul Sandle; Editing by Kate Holton)
