Carbon Dioxide Shortage Squeezes Craft Brewers

Carbon dioxide (CO2) is in short supply, both gas suppliers and brewers have confirmed.

Most commercially used CO2 is a byproduct of ethanol production, which is used for gasoline. If ethanol is not produced, neither is CO2.

“When COVID hit back in the spring, driving suddenly was really reduced, which means there wasn’t demand for gasoline,” Compressed Gas Association (CGA) president and CEO Rich Gottwald told Brewbound.

A trade group that represents the industrial and medical gases and equipment industry, some CGA members provide CO2 to several industries, including food, dry ice and beverages.

Brewers have many uses for CO2, including purging tanks, packaging beer in bottles and cans and pushing kegged beer through draft lines in taprooms. But they face a lot of competition in procuring CO2 from the country’s depleted inventory. The beverage industry — alcoholic and non-alcoholic — ranks third in commercial use of CO2, behind the food industry and dry ice, which is used in pharmaceuticals, water treatment, metal welding and more. Food producers use CO2 at nearly four times the rate of beverage makers.

Due to the shortage, CO2 distributors are spreading their supply to customers.

“There’s only so much CO2 availability right now, and I know that my network is doing the best they can to make sure that everyone gets some of it so that no one has to shut down,” Gottwald said.

Gottwald added that shortages have improved since the spring when the pandemic first upended American life.

However, breweries are beginning to feel the pinch. One northeast regional brewery had to order CO2 from Canada when inventory on this side of the border ran out, which led to packaging delays.

In California, Russian River Brewing Company is facing similar issues, co-owner Natalie Cilurzo told Brewbound.

“We have refineries here in California, but because nobody’s driving to work anymore, gas sales are way down and so the refineries aren’t running,” she said. “We’ve been buying CO2 from the Midwest.”

Pre-pandemic, about half of Russian River’s revenue came from its brewpubs in Santa Rosa and Windsor, which were forced to close in mid-March. The company pivoted to focus on packaged beer for the four markets where it distributes, including California, Oregon, Colorado and Philadelphia, Pennsylvania.

Russian River’s cost for CO2 has doubled and the quantity of their next order was slashed by 75%, Cilurzo said.

“Not only has the price doubled, but supply is going down,” she said. “And now it’s definitely starting to affect the production side.”

In anticipation of a shortage, the supply chain subcommittee of the Brewers Association (BA) published a guide on reducing CO2 use in April.

“A reliable supply of carbon dioxide is dependent upon a number of global and political factors, and brewers would do well to economize their resources in the event of a supply shortage,” the BA wrote. “As an added benefit, economizing brewery CO2 can help to achieve financial and sustainability goals.”

To conserve as much CO2 as possible, the BA recommended performing routine system maintenance to catch leaks, measuring precise usage during cellar operations and using nitrogen to purge empty containers when packaging.