AN agreement has been reached which will keep a North East fertiliser plant operational, the Government has said.

CF Fertilisers, which has a plant in Billingham, ceased production last year when rising energy costs made its operation unviable.

A three-month agreement to support production came to an end yesterday, prompting uncertainty and fears of shortages of food and drink products.

The company provides about 60 per cent of the UK’s carbon dioxide supply – which is crucial to a number of industries, including stunning animals for slaughter, extending the shelf life of food, aiding in surgical operations and cooling nuclear power plants.

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The Department for Business, Energy and Industrial Strategy (BEIS) said today the carbon dioxide (CO2) industry had come to an agreement.

Tees Valley Mayor Ben Houchen said the news came as a relief to hundreds of Teesside workers. 

A government spokesperson said: “The carbon dioxide (CO2) industry has come to an agreement to ensure UK businesses have access to a sustainable supply of CO2 - an essential component of the national economy.

“The deal will enable CF Fertilisers’ Billingham plant to continue to operate while global gas prices remain high.

“It means key sectors, including food processing and nuclear power, are ensured supplies of CO2.

“The government welcomes industry’s agreement which is in the best interests of businesses.”

CO2 is vital to a number of industries. Meat processors, brewers, bakers and soft drink producers all use carbon dioxide in the making and packaging their goods.

It is also required for the humane slaughter of animals.

The Government was forced to use taxpayer money to fund a short-term bailout for CF Industries last September when production ceased in Billingham, choking off supplies of the fertiliser by-product.

Industry then came to an agreement in October without taxpayer support to ensure CF Fertilisers on Teesside could continue to operate for three months.

A BEIS spokesperson said today: “In the longer term, the government would like to see the market take measures to improve resilience, and we are engaging on ways this could happen.”

Yesterday, the Food and Drink Federation (FDF) called on the Government to act to keep the supply moving. 

Labour’s Alex Cunningham, the MP for Stockton North, called on the Government to “look seriously” at its role in ensuring a sustainable supply to avoid last minute deals. 

He said: “Although details are thin, I am pleased that an industry-led agreement has been reached which will enable CF Fertiliser to continue production at its Billingham plant, protect local jobs, and supply the many businesses and others from food processors to hospitals who rely on the CO2 off-product.

“While this is good news, I am concerned that the Government is relying solely on industry taking the initiative, while refusing to acknowledge the role government can play in ensuring the supply is sustainable and we avoid last minute deals that cause uncertainty in the sector and anxiety amongst employees.

"I have repeatedly emphasised the need for a Government-supported Industrial Strategy to support businesses like CF Fertilisers, but would urge the Business Secretary to look seriously at this again.”

Mr Houchen said: “I am delighted that an agreement has been reached that will keep CF Fertilisers operational, this will be a huge relief for the hundreds of Teessiders that work for the firm at their Billingham plant.

 “Since the company temporarily stopped production is September last year, I’ve been working closely with both CF and the government to reach a long-term sustainable solution and will continue to do so.

“Today’s deal will give certainly to both local workers and those industries that rely on carbon dioxide, especially those involved with food production.”

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