A fertiliser factory's decision to pause production has sparked renewed fears over a shortage of carbon dioxide (CO2) needed by the food and drink industry.

Food and farming industry leaders raised serious concerns after CF Fertilisers said soaring energy costs made production "uneconomical" at its ammonia plant near Middlesbrough.

Although the firm says it will import raw materials to continue supplies of its ammonium nitrate fertilisers, the decision will temporarily halt the production of CO2, a by-product used in the slaughter of pigs and chickens as well as in food packaging and fizzy drinks.

The government said it is examining options to secure UK CO2 production. In September 2021, ministers struck a deal keep the plant running after a previous shutdown threatened food shortages and farming crises.

Nick Allen, chief executive of the British Meat Processors Association, said the latest decision had sparked more "serious concerns" in the sector.

"Without sufficient CO2 supplies the UK will potentially face an animal welfare issue with a mounting number of pigs and poultry unable to be sent for processing," he said.

CF Fertilisers said its decision was enforced by "market conditions", but it intends to import ammonia to the factory to enable it to fulfil all orders of ammonium nitrate fertiliser contracted for delivery in the coming months.

But the National Farmers' Union (NFU) said it will be meeting the company to gain "urgent clarity" on the impact its decision will have on the domestic fertiliser market.

NFU East Anglia regional director Zoe Leach said: “Farmers will be worried by news that CF Fertilisers is temporarily suspending ammonia production.

“It’s a sign of the pressure the fertiliser and energy markets are under, pressure which is having serious impacts for farm businesses across East Anglia.

“Growers are already facing soaring costs for UK-produced fertiliser, up 158% year-on-year, with concerns about lack of availability of fertiliser for 2023. This added uncertainty is the last thing they need.”

NFU president Minette Batters added: “The NFU will continue to engage with the government on action to improve the resilience and transparency of the fertiliser market, which is crucial to maintaining and enhancing our domestic food production.

“I am also urging the government to review how this decision impacts CO2 availability in the UK, which is essential in the food supply chain to process and package food.”