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 CO₂ industry from competition law to facilitate the agreement and provide further security of CO₂ supplies 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 CO₂ requirements.