Although the supply of commercial beverage grade CO₂ has been relatively stable for the past year, recent circumstances in California have illustrated how tenuous the supply of beverage-grade CO₂ remains. Permanent and temporary closures and disruptions of major sources of commercial CO₂ has left many brewers in California facing force majeure clauses in their contracts that allow severe allocations and increased pricing.

Why CO₂ Supply Could Tighten Again

Many regions in the U.S. could face similar disruptions in the coming years. The long-term outlook for the availability of beverage grade CO₂ remains fragile. The recent North American CO₂ Summit in Denver, Colorado, cited decreasing supply and increasing demand. Refinery closings in California and current plans to sequester CO₂ from both ethanol production and natural well sources, such as the Jackson Dome, are examples of commercial sources of CO₂ that are being removed from the market.

At the same time, there is a growing demand for commercial CO₂ from emerging industries such as sustainable aviation fuel and dry ice applications. New sources of CO₂, such as direct air capture, biogenic and fuel cell gas recovery are being explored, but converting to these new technologies will be a major challenge for suppliers. Volatile policy decisions around the 45Q and 45Z tax credits are creating additional uncertainty.

What Brewers Can Do Now

The unavailability of CO₂ has the potential to bring production to a halt. Brewers are advised to consider both their short-term and long-term options in the event of a CO₂ shortage in their region. Consider familiarizing yourself with the following resources to help you prepare for CO₂ shortages that many experts feel are an eventuality.

Helpful Tools and Resources

• U.S. Merchant Carbon Dioxide Demand, Supply, and Trends: Discover the ins and outs of CO₂ sourcing and know if your region is at risk.
• Carbon Dioxide (CO₂) Contracting: Understand your current contract and what options are available during a disruption of supply.
• Is Your Brewery Using CO₂ Efficiently? Compare how your breweries CO₂ use compares to your peers.
• Navigating CO₂ Supply Shortages: Access this collection of resources to understand the fundamentals of supply, capture, quality, and economical and safe use of CO₂ in your brewery.