The UK's last fertiliser plant is halting production - raising concerns it could lead to a shortage of carbon dioxide for the drink and food sectors.

CF Fertilisers said soaring energy costs made production "uneconomical" at its ammonia operation at Billingham near Middlesbrough.

Its by-product, CO2, goes into carbonated drinks like beer and cider and is also used in the slaughter of pigs and chickens.

The UK Government said it was examining options to secure CO2 production.

Last September, the government stepped in to meet the cost of running the plant after a shut down due to high gas prices threatened food supplies.

Emma McClarkin, chief executive of the British Beer and Pub Association, told the BBC the timing of the announcement "couldn't be worse" as she also called for the government to intervene.

"A guaranteed supply is essential for operations across pub and brewing businesses and this announcement comes at a time when they are already facing extreme cost rises that are threatening businesses and people's livelihoods across the country."

Energy costs fears for pubs

New research out this week revealed that more than 70% of British pubs do not expect to survive the winter if nothing is done to ease energy costs.

Nick Allen, chief executive of the British Meat Processors Association, said the government will have to act once more over the plant.

He said: "While we are in a much better position now than we were a year ago, if CF follows through on its threat to close Billingham the British meat industry will have serious concerns.

"Without sufficient CO2 supplies, the UK will potentially face an animal-welfare issue with a mounting number of pigs and poultry unable to be sent for processing."

CF said it has decided to pause production amid concerns its costs will continue to surge in the coming months.

"At current natural gas and carbon prices, CF Fertilisers UK's ammonia production is uneconomical, with marginal costs above £2,000 per tonne and global ammonia prices at about half that level," the company said.

A government spokeswoman said it was aware of CF Fertilisers decision to temporarily halt ammonia production at Billingham.

"Since last autumn, the CO2 market's resilience has improved, with additional imports, further production from existing domestic sources and better stockpiles," she said.

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