Supermarket soft drink aisle empty? It could be the CO2 crisis

The lack of gas has left supermarket shelves empty across the country.

There are only a handful of facilities producing food-grade carbon dioxide in Australia, with just two companies supplying the entire domestic market.

One of these companies, the British multinational BOC, told ACM it was "managing a CO2 supply situation" after outages across several plants hit local production hard.

"Product has been imported to bridge the supply gap however due to many current issues impacting international freight, supply has been impacted except for critical medical, safety and water treatment customers," a spokesperson said.

While the rising concentration of atmospheric carbon dioxide is a key driver of the climate crisis, supplies of purified CO2 have been running short worldwide in the past few years.

These shortages are often sudden and wreak havoc as the effects ripple across the range of industries reliant on the gas.

Critical industries like healthcare and water authorities - which depend upon it for breathing machines, sterilisation and drinking water purification - are always given priority, which often leaves little for other sectors.

Carbonated beverages are usually the hardest hit, but the meat and dairy packaging, baby products and large-scale baked goods industries all depend on CO2 to extend the shelf life of their products.

Australia's supermarket giants aren't immune to the shortage, with a Woolworths spokesperson confirming soft drink supplies had been eroded in its stores.

"We are working to manage these impacts, and a number of alternative products are available to customers while these shortages continue," the spokesperson said.

Coles, ALDI, IGA and Foodworks stores have also suffered, with budget labels like Black & Gold, and the supermarkets' own-brand labels the worst affected.

Canadian dairy multinational Saputo has been forced to bring cheese production at two of its Australian sites down to three days a week as it searches for alternative CO2 supplies.

A spokesperson said the company was trying to "minimise disruptions" and had "sufficient inventory stock levels available to meet consumer needs".

The Australian Dairy Products Federation said a stable supply of the carbon dioxide was "crucial" to the industry and it would "continue to monitor the situation closely".

"Dairy processors affected by the CO2 shortage in Victoria are working hard to limit the impacts and source alternative supplies, whilst bearing the brunt of the additional costs," CEO Janine Waller said.

This isn't the first time Australia has faced a lack of fizz.

In April and May, 2023 supermarket shelves were also bare and the South Australian wine industry was so worried about the supply crisis pushing prices through the roof that it asked for government help to alleviate the shortfall.

A similar crisis hit New Zealand in January 2023 when its only domestic source of CO2 had to shut down for two months, while the UK government stepped in to cap costs and subsidise production when a more serious shortage crippled several food and drink industries in 2021.

Carbon dioxide is captured for commercial use at industrial plants that use natural gas: in the UK it's fertiliser plants, but in Australia and New Zealand it's mostly gas processing facilities.

Massive gas processors like ExxonMobil's Longford plant in Gippsland produce huge amounts of CO2 at a pressure and concentration that makes it the easiest and cheapest source to collect, purify and redistribute the gas on a large scale.

Dwindling investment in the gas industry and instability in global prices driven partly by the push to pivot away from fossil fuels has played a role in the interruptions according to those in the brewing industries hit by the 2023 shortages.

BOC is in the final stages of building a new CO2 plant at Longford that could produce 60,000 tonnes each year, making it the biggest facility in the South Pacific.

But the biggest hurdle facing producers in the longer term will be meeting various governments' strict net zero targets.

Because CO2 being reused for things like food and drink is re-released into the atmosphere, it can't be written off by the gas companies as "mitigation". If the companies were using "carbon capture" to filter it from the air they could write it off, but this is much more expensive.

As governments get more serious about meeting their net zero targets they will almost certainly make it more expensive for the gas companies to offload their CO2, and the price rise will eventually trickle down to the consumer.

While a supply of CO2 will likely remain critical to health care and clean drinking water, the bigger question is whether net zero turns the humble lemonade - or beer - into a niche, luxury product in the future.