In case you missed it, the country has been dealing with a CO2 shortage for much of 2023 thanks to a storm that had been brewing for years. One notable issue in the saga is that there was a delay in informing the industry of the shortage, which could have helped to avoid some of the problems faced.
Since the Marsden Point oil refinery closer in 2022, the Kapuni plant has been the only domestic supplier of CO2. It shut down due to an ammonia leak at the end of last year, which brought all this to a head. Brian Watson of the Brewers Guild told TVNZ there were hundreds of thousands of dollars of losses across their membership base as a result. On June 1 the plant was back up to full capacity after lengthy repairs, but the lofty price of CO2 still hasn’t dropped and it’s still unclear what effects this will have on the industry.
The Brewers Guild spearheaded the issue and have been in talks since January with both Minister Megan Wood and her office, as well as MPI, MBIE and EECA. Guild executive director Melanie Kees says they have continued to work with and advise government agencies of the challenges the industry is facing, which, over the past six months, have included shortages, supply chain issues, cost increases and issues with the supply of alternative gases.
“In some cases we are aware of price increases of over 600%,” says Kees. “We have also discussed how brewing is one of the few industries that has the ability to capture and reuse CO2, which could reduce demand on the supply chain, however that is a costly exercise which is out of the reach of many breweries in New Zealand, hence the request for support in the form of funding, co-funding or incentivising the industry.”
These CO2 shortages affected more than the brewing industry — others that felt the pinch include agriculture, healthcare, food, and water treatment. Breweries have an advantage though, with access to alternative gases and processes that other industries do not. One option is to use nitrogen as an alternative, which can reduce consumption of CO2 by close to 70%. This gas is more cost effective and can increase beers shelf life by reducing the amount of oxygen that can get in. Implementing nitrogen will require new equipment, however, at a cost that can’t always be justified by smaller breweries.
Another alternative that’s gaining traction here is using a recapture system. Breweries that are using or have started looking into recapturing systems include Sawmill, Garage Project, Lion, DB and Eddyline. Earthly Labs offer a recapture kit and Viniquip have recently introduced a new kit to the market that is a smaller and more affordable option.
Aaron O’Keeffe at Viniquip explains that the Dalum units that the company are importing are designed for craft breweries to recover their own CO2 from fermentation and purging of tanks. Where 25 years ago this technology was only affordable to mega breweries with large expensive and complex systems, today any brewery can benefit.
“For a long time there wasn’t really an option for small- to medium-sized breweries,” says O’Keeffe. “Dalum are one of a few companies that have invested in technology to create systems that can be used in small or medium breweries, and even large-sized craft breweries. The footprint is really small — it’s almost the size of a pallet, about 1.2 by 1.2 metres and two or three metres high.”
Recapturing CO2 allows breweries to become more self-sufficient, but when using these smaller kits only a percentage is able to be captured. This amount is dependent on the storage tanks, which can vary in size, and the recovery rates — the Dalum products offer a 65-70% recovery rate.
“If we can offer a CO2 recapture system that helps breweries become that bit more efficient, saves on costs and cuts down their CO2 emissions, we’d love to be able to provide those solutions,” says O’Keeffe.
The issue of CO2 supply isn’t unique to New Zealand, with other countries such as the UK and US having experienced supply-chain issues in the past. Officials from some of New Zealand’s government agencies met with counterparts from the UK as this was going on to better understand how the issue could be handled.
In addition to the recapture systems, other breweries have innovated and found different ways to run to capacity in the months following the shutdown — in part they were driven by the lack of communication around exactly what was going on. A small group of breweries sought CO2 from South East Asia. MBIE is also believed to be investigating a second plant in New Zealand, too.
While Kapuni is back in operation, it is still New Zealand’s only domestic producer of CO2, so another incident could find us in the same boat. We’re not totally out of the woods yet — it’s still not clear to the industry exactly what will happen in the future. Whether there continues to be outages and whether pricing will reduce back to normal levels are the two big questions on everyone’s minds.