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CO2 Outages – Did We Learn Nothing in 2018?

We blogged last week about the sharp rise in energy prices in the UK and the fact that this was leading some energy-intensive industries to shut-down production.  The situation has now escalated markedly, with the news that our main producer of fertiliser, CF Industries, has shut down production; leading to a massive shortage of CO2 for the food and drink industry.

The shocking thing though is that we experienced a Europe-wide shortage of CO2 as recently as June 2018.  Whilst our blog post at the time focused on the impact on beer production during England’s successful World Cup campaign; the more serious impact on the wider food and drink industry was widely reported too.  Having come so close to disaster three years ago, why has nothing been done to mitigate the risk?

I would suggest (at least) two factors are at play here.  Firstly, it’s a perverse twist of human nature that exposure to near misses in this way tends to make us feel less, rather than more, vulnerable!  For instance, analysis of the Challenger Space Shuttle disaster found that the engineers who were most aware of the catalogue of previous problems with the solid-fuel booster rockets were actually the most confident about the safety of the shuttle.

Secondly, we observe in our business continuity work, that organisations frequently struggle with the business impact analysis.  This is the critical step of identifying what are the most time-critical activities for an organisation and what resources (eg CO2) are required to carry them out.  Clarity on these resource requirements is the basis for both risk mitigation activities and contingency planning for possible disruptions.  It would appear though that, even after the warning in 2018, many in the food and drink industry failed to grasp the criticality of ensuring a reliable supply of CO2.

We are advised today that the UK Government is working to urgently restore CO2 production, and we may still avert a crisis.  Hopefully, this time around, the lessons identified in 2018 will become lessons learned; with food producers making substantive changes to ensure supply chain continuity.