CO2 price rise affecting Irish brewers

Reports of a likely Carbon dioxide shortage for breweries in the UK have not been reflected here in Ireland although a hike in CO2 prices of late of up to 700% has led to some speculation about supplies and input costs.

 

Some of the larger brewers like Heineken Ireland can capture CO₂ during beer and cider fermentation to reuse in the brewing and kegging process. whenever it brews its beers and ciders at the Lady’s Well Brewery in Cork.

The Lady’s Well Brewery aims to be self-sufficient in CO₂ requirements and told Drinks Industry Ireland, “As such we do not envisage any shortage for the purposes of brewing and also the process contributes to the circular economy, led by our sustainability strategy Brew a Better World“.

But as the Cork brewery produces mostly draught beer and much – if not all – of its bottled product is imported, the demand for CO₂ would not be as great as would be the case for Diageo Ireland which is understood to have just invested £25 million in a huge canning facility in Belfast with a throughput of 72,000 cans an hour. Much more of Diageo Ireland’s product leaves the brewery in bottled and canned format and so it’s likely that St James’s Gate would have to buy in the extra CO₂ needed thus putting more pressure on margins.

But what about the smaller independent breweries?

Peter Mosley is Chairman of the Independent Craft Brewers of Ireland.

His members have not experienced any shortage of CO₂ but they have experienced steep price rises from suppliers, he says.

Cuilan Loughnane at White Gypsy Brewing finds it difficult to get accurate information on supplies of CO₂.  

He attended a talk in Munich some weeks ago where a full load of CO₂ was going to cost in or around £75,000 in the UK.

“Our own supplier has told us that CO₂ will be up by €33,000 the next time we buy 11 tonnes,” he told Drinks Industry Ireland, “We’d been buying it for €1.50 a kg but it’s now going up by €3 so it’s going to be €4 or €4.50 per kg.

“Using CO₂ at that price makes it the most expensive part of that bottling line,” he concluded, adding, “For smaller breweries it’s going to be tough Winter.”

 

Carbon dioxide is a by-product of the fertiliser industry. Belarus used be a main supplier of fertiliser but with Putin’s invasion of the Ukraine, this source has disappeared from the market.

Elsewhere, it’s understood that a lot of breweries that normally produce soft drinks and Low Alcohol/No Alcohol Beers have stopped production of soft drinks and NABLABs to concentrate on their beer products.

To get around this, some independent breweries are considering using Nitrogen as a substitute although it’s less efficient in conditioning the beer.

Alot of the CO₂ landed in Ireland is exported to the UK. Despite that, Ireland enjoys a bit of a surplus but this remains an ongoing European problem. And the cost of CO₂ is a problem that’s unlikely to be solved any time soon.