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Proposal to save UK energy-intensive businesses from closure

UK government Business Secretary Kwasi Kwarteng is understood to have submitted a proposal to the Treasury under which steel, chemical and ceramics producers impacted by surging energy prices could be offered state-backed rescue loans in return for limiting bosses’ bonuses and dividends. The proposal is one of several options to save energy-intensive firms from closing in the face of increasing wholesale gas prices, which have surged 250% since the beginning of the year on the back of lower Russian gas supplies to Europe and burgeoning global demand for LNG, especially from Asia.

Meanwhile, the CO2 industry has come to an agreement to ensure UK businesses, including key sectors such as food processing and nuclear power, have access to a sustainable supply of CO2. Under the deal, CO2 suppliers will pay CF Fertilisers a price for the CO2 it produces that will enable it to continue operating while global gas prices remain high. The arrangement will stay in place until January 2022. CF produces around 60% of the 
UK’s commercial CO2 requirements.

In September, the UK government stepped in to provide financing to CF for three weeks so that it could continue operating. The government also temporarily exempted parts of the CO
2 industry from competition law to facilitate the agreement and provide further security of COsupplies to UK businesses.

More recently, Ensus has reopened its Wilton plant following temporary closure for planned maintenance, securing further supplies. The Wilton plant can produce up to 40% of the UK’s CO
2 requirements.

News Item details

Journal title: Petroleum Review

Countries: UK -

Subjects: Energy policy - Energy markets - Electricity markets - Gas markets - Carbon dioxide -

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