CO2 shortages a consequence of Government inaction - National

The National Party says the closure of the Marsden Point refinery has put New Zealand in a vulnerable position.

The Kāpuni liquid carbon dioxide plant in Taranaki has been New Zealand's only domestic producer of food-grade CO2 since the Marsden Point refinery was decommissioned last year.

Just before Christmas it temporarily shut down over safety concerns and has no reopening date at this stage.

National Party energy and resources spokesperson Stuart Smith told Morning Report government inaction has been a major cause of the problem.

"[Finance Minister] Grant Robertson was warned that if ACC was forced to sell their 10 percent shareholding in the refinery it would likely close and he just virtually laughed it off."

CO2 shortages were a consequence of this, Smith said.

"We have always suffered from the tyranny of distance and we're also quite a small market so when there's global shortages of things such as CO2, as there is at the moment, we have an issue with a plant not being able to produce it now."

The supply chains have been made much more vulnerable than they need to be, he said.

CO2 is used for diary product cultures and high value exports like meat which is airfreighted out of the country, he said.

"It's really the high end stuff that creates a lot of value for New Zealand as well as everyday products that people just don't realise and actually it's used in medical uses as well."

The Kāpuni closure will have a significant impact on prices, he said.

"One business told me they were paying $5 a kilogram for dry ice and they're now paying $18.

"It's a significant issue that's only going to get worse as time goes on and stocks run down for those that already have some supplies."