Second CO2 plant being considered, more imports on way as Govt eyes issue

Todd Energy's Kapuni gas treatment plant is the only domestic producer of food-grade CO2, but suppliers are investigating another option. Photo / RNZ, Robin Martin

By Madison Reidy

Major suppliers of liquid carbon dioxide are considering setting up another domestic gas production plant, according to a government agency monitoring the nationwide shortage.

The Ministry of Business, Innovation and Employment (MBIE ) told the Herald the gas industry was investigating the feasibility of a second CO2 production plant here, because local supply had dried up. The Herald understands global gas companies BOC and AirLiquide are leading this response.

New Zealand’s only plant that produced food-grade CO2 was the Kapuni gas treatment plant, privately owned by Todd Energy. However, it was shut down over safety concerns, according to AirLiquide.

The Marsden Point oil refinery used to produce a large proportion of New Zealand’s CO2, but that closed in April last year, leaving the country dependent on Kapuni and imports.

BOC said in a statement that it was “actively working on finding a suitable alternate supply of CO2 feed gas that could allow for the relocation of the Marsden Point CO2 plant”.

“However, this is a longer-term solution and we expect it to be a significant period before we can produce more CO2 locally.”

An MBIE spokesperson said the Kapuni plant made up “a sizeable proportion” of New Zealand’s total CO2 use, and had ramped up production prior to its closure.

The agency was in regular communication with Todd Energy as it worked to resume production at the plant.

MBIE was leading a cross-government agency team to keep an eye on the problem and its impact on businesses and consumers, with the Department of Prime Minister and Cabinet, Ministry of Health and Ministry for Primary Industries all involved.

In the meantime, gas suppliers were being forced to ration liquid CO2, prioritising supply to the healthcare sector, and were importing more product.

BOC, a subsidiary of global industrial gas company Linde, told the Herald it started operating a mixed CO2 supply model here last year, following the Marsden Point oil refinery’s closure, but was now having to import additional CO2 from Asia.

“BOC is working closely with its global supply chain to secure more CO2 supplies,” a BOC spokeswoman said.

“We are working collaboratively with suppliers, customers and other industry stakeholders to manage the CO2 supply situation. Rationing is in place and allocations will be reviewed regularly in line with product availability.”

MBIE said increased imports were one measure the market identified as a means to offset any CO2 supply problems before Marsden Point closed.

“The sector has already begun implementing these opportunities, which include increasing production at Kapuni, increasing imports, improving the efficiency of customers’ CO2 use, and investigating the feasibility of an additional domestic CO2 production facility,” the MBIE spokesperson said.

Some companies that required CO2, such as carbonated beverage manufacturers, had switched to using other gases.

“Government is facilitating key sectors and suppliers to work together to understand steps industry can take to mitigate potential impacts.”