The great carbon dioxide crisis in the UK
Friday, July 20, 2018
The majority of my recent dispatches have concerned the problems of supply and demand with certain high-GWP HFCs caused by the onward march of the F-Gas regulations. With everyone continuing to worry about the price of the likes of R404A and R410A, it came us quite a shock for the industry to find itself suddenly in the grip of a full-blown carbon dioxide crisis.
This was the result of a perfect storm where carbon dioxide processing plants in Northern Europe had regular summer shutdowns that coincided with heatwave-driven demand for some main end uses — namely for "beer gas" for the pubs and for soft drink production. The U.K. particularly found itself running short of CO2 stocks.
You may have seen the headlines, since our national media in the U.K. got very excited about the prospect of the shortages of CO2 causing the beer taps to run dry and the soda to go flat.
In the space of a few days, excitable headlines about a "national CO2 shortage" appeared to have created a self-fulfilling prophecy, and the U.K. quickly found itself in short supply of many forms of the gas.
The national press had a field day, as the varied applications of different grades of CO2 were exposed to the public glare and their impending crisis assessed. As all good chemists will know, CO2 is not just used to create fizz, but it is also added to prepack salads; used in meat preparation and slaughtering; and of course, to produce dry ice for any number of transportation refrigeration uses.
Soon brewers were announcing that they were unable to produce certain beers and bakers were having to stop production of English crumpets (CO2 is used to make the holes) — a true national crisis.
Of course, somewhere within this carbon dioxide infrastructure sits the users of CO2 for refrigeration, given it is the natural refrigerant of choice for so many large retailers. As a relatively low-volume user of the gas compared to the brewers et al., the cooling industry entered the national crisis relatively confident that they could ride it out with some good stewardship.
But that was to underestimate the nature of the U.K. customer, who, when faced with a potential supply crisis, tends to attempt to buy up everything in sight, just to be on the safe side.
Soon, the carbon dioxide processors were telling their refrigerant customers that additional supply would need to be diverted to the insatiable food and drinks sector. The knock-on effect was felt instantly — one refrigerant distributor reported that overnight, its stocks that would have been sufficient to supply all anticipated orders had been wiped out.
Now, at this point I should add that refrigerant contractors and their customers were not wholly a model of restraint and at least one major customer sought to stockpile a large volume.
Wholesalers and distributors alike sought to send a message out through we, the trade media, to the customer base not to panic. One said, "If contractors don’t panic-buy lots of additional stock, there will be sufficient refrigerant to ride out the crisis."
But soon it became clear that there would be little wiggle room.
One distributor confessed that the surplus stock it thought it would have for ad hoc purchasers was gone — and most said supply would have to be limited to regular customers only. The wholesalers’ message became a little more direct, "Don’t buy additional stock in excess of what you need for current jobs."
As I write this in mid-July, the "crisis" has not brought any refrigeration projects to a close, but the CO2 refrigerant trade suppliers are still reporting that things are tight, and have not returned to normal service as quickly as expected. The upstream processors are not back in production after the shutdowns, but there has clearly been a widespread raiding of gas that needs replenishing.
The initial messages of caution appear to largely have been heeded by refrigerant customers, although at least one supplier believes we are not quite out of the woods yet.
The carbon dioxide crisis has taught us one or two lessons, though — the principles of buying cautiously and not skewing the market by stockpiling will surely come in handy as the R404A market continues to tighten in the wake of the first higher-GWP bans.
At the same time, more than one observer has noted that the events of the past few weeks might have demonstrated that carbon dioxide might be a “natural” refrigerant, but it isn’t just plucked from the air, and that it has to be processed from somewhere.
Even though it has a very attractive GWP, it could be subject to the same laws of supply and demand as every other refrigerant. This could serve as food for thought for the U.S. and other markets internationally.
- 10 negative employee behaviors that undermine success
- EPEE: Cooling has an essential role to play
- Selling your business? What tenants need to know about their lease
- Are independent pharmacies really that profitable?
- Back to the future with Ford bioplastics
- 7 key elements of an effective new employee orientation program
- Can solar energy compete with fossil fuels?
- US vs. Europe: Comparing different approaches to renewable energy
- Help your patients comply with getting vaccinated easily
- Is your small business making YouTube videos yet?
- Simple changes we can expect to see in workplace environments
- Can controversial coal be shipped from old military bases?
- A better way to explain the job to candidates
See your work in future editions
Your content, Your Expertise,
Your Industry Needs YOUR Expert Voice & We've got the platform you needFind Out How