Freight Industry Warns CO2 Shortage Is Severely Impacting Air Exports

Air cargo exports of New Zealand products are being severely impacted by the critical shortage of liquid CO2 and dry ice, says the industry body representing freight forwarders.

The Customs Brokers and Freight Forwarders Federation of New Zealand (CBAFF) is calling on the Government to investigate options to increase domestic production of food grade CO2 – including the possibility of reopening the Marsden Point refinery, which produced CO2 as a by-product of its refining operation.

Liquid CO2 is used to create dry ice, with many thousands of kilograms used weekly to fly high quality perishable goods, including meat, fish, dairy and pharmaceutical products, internationally.

CBAFF chief executive Rosemarie Dawson said many of its freight forwarder members are reporting difficulties with shipping customers’ product out of New Zealand because they cannot source dry ice.

“Dry ice is an absolutely necessity for a lot of product that goes out of this country,” said Ms Dawson. “A number of our members are telling us they simply haven’t been able to ship their customers’ air freighted product.

“For instance, one company which would normally use seven to 10 tonnes of dry ice a week for air-freighting perishable goods, is currently only able to source about 200kg and last week they could not source any dry ice in the North Island at all.

“Dry ice cannot be ‘stockpiled’ it only has a shelf life of four to seven days. The cost of dry ice has also risen from $4per kg to $18 per kg since October. – There are two distributors of dry ice in New Zealand and they can import some liquid CO2 but it is nowhere near enough to meet demand.”

Since the closure of Marsden Point last year, New Zealand has had just one domestic producer of food grade liquid CO2, Todd Energy’s Kapuni plant in Taranaki. This closed in a safety-related shutdown in December with no current indication of when it will reopen.

Ms Dawson said, in the long term, delays in delivery and rising costs could result in New Zealand exporters losing market position.

“We are in competition with Australia, which has dry ice priced at around $3 a kilo and is getting its air-freighted product to market reliably at a lesser cost.

“The shortage can also affect movement of vaccines and other temperature controlled medical supplies. Many overseas customers of New Zealand product also purchase small samples for testing ahead of placing a large order. We have members who have been unable to ship even small 10-20kg samples of items such as pharmaceutical products for testing. Those international customers could look elsewhere.

“Some imports are also affected. One of our members has a client who flies in a weekly consignment of chilled food cultures from Europe. These are then delivered to producers around the country. The forwarder is having to reuse the dry ice that arrives with the product, which creates challenges because it is already three to four days old.”

Ms Dawson said there is a clear need for the Government to urgently identify options for increasing domestic production of food grade liquid CO2.

“For a country highly reliant on our exports, having only one domestic producer left us highly exposed and unfortunately our sector’s fears this would result in a crisis have proved correct.

“We can only hope the Kapuni plant will be up and running again soon but the Government also needs to act to manage risk and future proof a competitive domestic supply of food grade CO2. Whether it is finding a way to reopen Marsden Point or establishing a new facility, it is absolutely critical to the New Zealand economy that a solution is identified and acted upon as swiftly as possible.”

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