Comment: Long-term answers to the UK's carbon dioxide shortage Published on: 17 February 2022 Writing for The Conversation, Jas Kalra and Jens Roehrich explain how the government can manage supply chain risks for strategic products such as carbon dioxide. , and , The UK鈥檚 supply of carbon dioxide (CO鈧�), which is essential for everything from critical NHS operations to keeping food fresh while being transported, remains in jeopardy. It was for the second time in a few months thanks to between leading supplier CF Industries and the UK government, which keeps CF鈥檚 two English plants up and running until the end of April. After that, however, it is not yet clear what will happen, and fixing this problem is not going to be easy. CO鈧� shortages have been a recurring issue for some time. Since as far back as the , the UK seems to have been facing an impending crisis every few months. The worst so far came in 2021 when CF Industries, which supplies 60% of the UK鈥檚 requirement as a byproduct of making fertilisers, announced it would be shutting its plants in Teesside and Cheshire because the in natural gas prices had made them commercially unviable. In October 2021, the UK government had no choice but to give the American firm a cash injection 鈥渢ens of millions鈥� of pounds. When that expired at the end of January, the second three-month deal was done. It is not clear what will happen after April. So what does a long-term solution look like? Supply chain risks When it comes to understanding supply chain risks, many companies use the . Created in 1983 by Peter Kraljic, the economist and former director of management consultancy McKinsey, it can equally be used to analyse a nation鈥檚 supply requirements. It breaks products into four categories by weighing supply-chain risks and the effect on profits if the product is not available. The products that need to be taken most seriously are the 鈥渟trategic items鈥� on the top right-hand side of the matrix (pictured above). These face severe supply chain risks and a big threat to profitability if they are not available. The supply of CO鈧� clearly falls into this category. Yet by focusing on short-term deals instead of long-term agreements, from sources with limited production capabilities, the government is treating this commodity more like one in the Kraljic鈥檚 bottleneck category (high supply risk but low impact). Typical of an item in the bottleneck category, this has put the government into a passive position in which it is entirely dependent on limited sources of CO鈧� supply and is having to pay . Bridging and buffering To address this problem, recommends a combination of what are referred to as buffering and bridging approaches. A bridging approach focuses on working with your existing suppliers to ensure you are informed in advance about possible disruptions and their consequences. The government was in fact given this information about CF Industries, but have heeded it. Clearly there are lessons there for the future. A buffering approach is about strengthening your supply of the product by building up larger inventories, forging relationships with alternative suppliers, and investing in infrastructure like storage facilities to cope with disruptions to supply and demand. In particular, developing alternative suppliers would help move the nation鈥檚 CO鈧� supply into Kraljic鈥檚 leverage items quadrant 鈥� high impact in the event of a shortage but with low supply risk. To this end, the government should establish a centralised procurement body with responsibility for CO鈧� supply. It would be tasked with signing long-term framework agreements with suppliers, with clauses incentivising continuity of supply, early warnings, regular and detailed risk assessments, and possible risk/reward sharing. Having said that, it鈥檚 probably not an option to import CO鈧�. As a relatively cheap commodity, the specialist equipment required to move it from another part of the world (so far at least) to be too expensive to justify the outlay. We know from the theory of that where a product is highly uncertain, in high demand and can鈥檛 be substituted, it is more economical in the long-term to vertically integrate the supply chain 鈥� in other words, do everything yourself. This points to a long-term investment to increase the UK鈥檚 national CO鈧� capacity. This probably entails looking beyond the fertiliser industry. For example, making bioethanol creates CO鈧� a by-product. The UK some 260 million litres of bioethanol a year, and the government could invest in more. Since bioethanol is a sustainable fuel for road vehicles, so this would be two wins for the price of one. Another solution would be to buy CO鈧� from . These use bacteria to extract gases from organic waste, and some are already up and running in the UK. One long-term answer might be carbon capture technology, which aims to trap the CO鈧� released from burning natural gas to make electricity. The UK already has plans for building and scaling this technology in the 2030s, though this is costs come down 鈥渟ufficiently鈥�. To ensure that carbon capture becomes viable, the UK needs to , including in the infrastructure to convert the CO鈧� into a suitable source for commercial customers. A parallel approach would be to rethink UK procurement of natural gas. The UK less than 6% of its annual demand, about 20% stored by Italy, France, and Germany. Greater storage capacity in the UK would have reduced its exposure to changes in the price, which might have prevented CF Industries from halting production in 2021. , Assistant Professor in Supply Chain Management, and , Professor of Supply Chain Innovation, This article is republished from under a Creative Commons license. Read the . Share: Latest News 缅北禁地 expert highlights climate crisis in a new film A leading 缅北禁地 climate scientist is featured in a new film about how the climate and nature breakdown will affect the UK. published on: 14 April 2026 Neolithic tombs reveal ancient kinship ties Male individuals buried in Neolithic chambered tombs in northern Scotland were often related to each other through the paternal line and some were interred in the same or nearby tombs, research shows. published on: 14 April 2026 We are our Memories New exhibition by Fine Art graduate Trish Hudson-Moses, 22 April 鈥� 4 May 2026 published on: 10 April 2026 Facts and figures
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