The UK Government has refused to reveal how much of taxpayers’ money has been given to a fertiliser firm whose US parent corporation is worth around £9bn.

CF Fertilisers UK, which has plants in Cheshire and Teesside plants, was bailed out by the government after a rise in gas prices last September made fertiliser production uneconomical.

Its parent firm in America - CF Industries - recently announced that its net earnings for 2021 amounted to £684m.

The announcement by the US firm of tens of millions of pounds in profit comes as Scots farmers point out that the rising cost of fertiliser is one of the reasons for rocketing food prices - leaving people struggling to afford the basics.

CF Fertilisers is the UK’s sole primary manufacturer of products including ammonium nitrate fertiliser, according to the Chemical industries Association.

HeraldScotland:

CF Fertilisers also produces around 60 per cent of the UK's industrial carbon dioxide (CO2) as a byproduct of fertiliser manufacture.

Food suppliers need carbon dioxide for meat production, the packaging of fresh foods, cooling nuclear reactors, and making dry ice to keep goods cool for transportation.The gas is also used in the process of stunning pigs and poultry for slaughter.

High gas prices made it less profitable for CF Fertilisers to operate its sites in Teesside and Cheshire, and both were closed briefly until the government stepped in last September. There were fears that a rise in the price of CO2 would have an impact on food prices and supply chains.

The emergency deal allowed CF Fertilisers to reopen its two plants. Announcing the bailout, Environment Secretary George Eustice, said that without the "temporary" agreement there would have been food supply problems. When asked about the deal he added: “It's going to be into many millions, possibly the tens of millions but it's to underpin some of those fixed costs.”

In January, it was reported that CF Fertilisers paid out a £4.5m dividend to its US parent group, CF Industries, just weeks before it accepted the British taxpayer-funded subsidy.

Last month CF Industries reported that its net earnings for 2021 was £684m. “The CF Industries team delivered outstanding results in 2021 as strong global nitrogen demand, lower global operating rates and favourable energy spreads drove company-record free cash generation,” said Tony Will, president and chief executive officer, of CF Industries Holdings.


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He added: “We expect global nitrogen fundamentals to remain positive, underpinned by the need to replenish global grains stocks, increased economic activity and global energy dynamics. We are well-positioned to continue to drive strong cash generation, enabling us to invest in our clean energy initiatives, return substantial capital to shareholders and achieve our goal of $3bn of gross debt by 2023.”

In February, the UK Government announced a “new agreement to ensure supplies of CO2” but ministers did not disclose any further details.

A statement said: “The deal will enable CF Fertilisers’ Billingham plant to continue to operate while global gas prices remain high. It means key sectors, including food processing and nuclear power, are ensured supplies of CO2. The government welcomes industry’s agreement which is in the best interests of businesses.

“In September 2021, the government provided limited financial support for CF Fertilisers’ operating costs for three weeks. Industry then came to an agreement in October without taxpayer support to ensure CF Fertilisers on Teesside could continue to operate for three months.”

The Ferret asked the UK Government to disclose how much of taxpayers’ money has been given to CF Fertilisers but it declined to comment.

CF Fertilisers and CF Industries did not reply to our requests for a comment.

Mairi Gougeon, the Scottish Government’s rural affairs secretary, said: “The Scottish Government recognises the importance of domestic fertiliser production to Scotland’s farming and food production industry, which is why I have continually raised the issue of ensuring continued supply to the UK Government.

“We are pleased that since then an agreement has been reached by the CO2 industry so that the CF Fertilisers plant can remain open for now, however we continue to press for a long term solution.”

Priced Out is an investigation by The Ferret, co-published with The Herald, exploring the impact of - and reasons that lie behind – the cost of living crisis in Scotland. Support their journalism by becoming a member for £3 a month. Use discount code PRICEDOUT to get your first month free.