UK to reopen CO2 plant on Teesside with £100m grant amid supply fears
UK to reopen CO2 plant on Teesside with £100m grant amid supply fears
A £100m government grant will restart a mothballed Teesside CO2 plant to ease shortages affecting food and drink production amid Iran-related supply concerns.
Plans to restart a mothballed CO2 plant on Teesside received a major boost after a £100 million government grant was approved to bolster the country's supply in response to shortages linked to the Iran war. The Teesside site, which was put into mothballs last year after a trade deal with the US cut tariffs on bioethanol—the plant's main product—will be brought back online to safeguard carbon dioxide essential to food and drink manufacturing.
Trade Secretary Peter Kyle confirmed the grant, saying the move would help firms avoid disruption in carbonation, packaging, and refrigeration where CO2 is used extensively. The decision comes as global CO2 markets face volatility amid sanctions and supply chain pressures, underscoring how domestic production is a strategic asset.
Officials say the restart will prioritise reliability and affordability, with the plant expected to create temporary jobs and strengthen regional industry resilience. While the aim is to ensure a steady supply for brewers, bakers, meat processors, and soft drink producers, critics may watch costs and timeline closely as the energy-intensive process ramps up.
Industry groups welcomed the funding, arguing a secure CO2 supply is a backbone of UK manufacturing. Government officials emphasised this is a contingency plan in light of external tensions, designed to reduce dependence on volatile imports and keep daily food production on track. If everything goes to plan, operations could resume later this year, underscoring the government's readiness to intervene in critical supply chains.
