Carbon dioxide (CO2) shortages are seriously impacting New Zealand’s beer industry, with some breweries having to halt production.
The country’s sole domestic food-grade CO2 producer in the Taranaki region was shut down on January 9 due to a safety valve releasing ammonia and will only restart limited production in February.
Previously New Zealand had sourced most of its food-grade CO2 from the Marsden Point Refinery, which closed in March 2022 amid much debate given its strategic importance to the South Pacific nation’s oil and gas supplies.
The closure had already caused severe issues last year: CO2 prices spiked from NZD 0.68 a kilo in April previous year to NZD 1.52 in October, despite a three-fold increase in imports of the gas.
Currently, CO2 bottle prices range from NZD 37 each to NZD 216: a 600%+ increase year-on-year.
Domestic gas suppliers must ration CO2 stocks to prioritise health and other critical customers over less ‘essential’ firms including breweries.
The ongoing shortages are causing breweries like Garage Project to reduce production by as much as 50%, leaving 60,000 litres of uncarbonated beer at one brewing site that had to shut down.
Smaller breweries are reportedly even more seriously impacted, with several halting output entirely while waiting for CO2 supplies.
“A lot of the breweries in New Zealand are small businesses, so to have a price increase of that much, potentially will cripple some of these businesses. They can’t pass these costs on always,” shared
“It may mean, both with the shortage and the price increase, that they either pause production of beer, simply because they cannot access the CO2 that they need, or, in some cases, they may actually shut up shop.
“And of course, the wider effect to the food and beverage and hospitality industry is that if beer isn’t being produced – and remember of course they need CO2 to pour beer at bars – they too are going to notice a really huge impact from this.”
The shortage is sparking a typical wave of Kiwi ingenuity. Behemoth has made lemonade in the difficult situation and launched an uncarbonated keg of their Lid Ripper Hazy IPA at their Auckland brewpub.
Curious drinkers can “now you can get a little taste of what life is like without enough Co2…straight out of the fermentor, 20m from our taps, so it could not be fresher, just without a bit of fizz.”
Moving forward, New Zealand’s Ministry of Business, Innovation and Employment is reportedly working with NZ’s gas industry to increase imports to plug the short-term shortages and the longer-term solution of a second CO2 plant being constructed.