Farmers to benefit as £100m move restarts key CO2 and bioethanol plant
A £100 million government-backed restart of a major carbon dioxide plant could provide a crucial boost to UK farming and food production amid growing concerns over supply shortages due to the US-Iran conflict and the blockade of the Strait of Hormuz.
Ministers have approved funding to reopen the Ensus facility on Teesside, which was mothballed last year after a US trade deal cut tariffs on bioethanol — its main product. The grant is expected to support an initial three-month restart, aimed at stabilising domestic CO2 supplies.
For farmers, the move is set to reopen a key market for maize and feed wheat, while restoring an important source of animal feed for the North East.
The intervention is significant for agriculture, where carbon dioxide plays a vital role across the supply chain. It is widely used in food processing, packaging and storage, as well as in abattoirs for humane livestock stunning.
CO2 production in the UK is closely linked to fertiliser manufacturing, meaning disruption in energy markets can quickly impact farm businesses. High gas prices in recent years have already forced some fertiliser plants to scale back or halt production, tightening CO2 availability as a knock-on effect. This has previously led to disruption across the food chain, particularly in meat processing.
Concerns are now resurfacing as global energy markets react to escalating tensions in the Middle East. Any prolonged disruption could place further pressure on fertiliser supplies and drive up input costs for farmers already operating on tight margins.
Grant Pearson, Ensus UK chairman, said: “This agreement of support from the UK government is excellent news for our employees and supply chain, and we hope to have the plant back in full operation soon.
“It will also support UK agricultural and fuel markets, including future expansion in sustainable aviation and maritime fuels and the development of greener chemicals.”
Former BP executive Nick Butler warned shortages could emerge within weeks, saying: “There will be shortages and I think the government now should be seriously planning how they’re going to handle that and part of that is maximising supply.”
The government’s move suggests ministers are keen to avoid a repeat of previous CO2 shortages, which caused disruption to meat processing and the wider food supply chain. Past shortages forced some abattoirs and producers to scale back operations, underlining the sector’s reliance on a stable supply of the gas.
Despite mounting concerns, ministers have sought to reassure businesses. Energy minister Michael Shanks told MPs the government was “absolutely not” preparing for blackouts or fuel rationing, insisting the UK has a “strong and diverse range of supplies”.
However, uncertainty remains over how long global supply pressures could last. The situation is being closely monitored by industry groups, with any sustained disruption likely to feed through into higher production costs and renewed pressure on farm businesses.
The reopening of the Teesside plant is seen as a short-term but important step in safeguarding key inputs for the UK’s food and farming sectors.
