A factory on Teesside has temporarily paused production prompting fears it could lead to a shortage in carbon dioxide needed for the food and drink industry.
CF Fertilisers, which has a plant in Billingham, said it has temporarily halted ammonia production due to the high cost of natural gas and carbon prices.
It means it will no longer be producing its byproduct, carbon dioxide (CO2), which is widely used in the food and drink industry.
The company said ammonia production is uneconomical at current market prices, with the cost of natural gas more than twice as high as a year ago.
Customers who buy CO2 from CF Fertilisers have been notified production will stop when the ammonia plant is safely shut down.
The company, one of the largest C02 producers in the UK, intends to use the site to import ammonia to enable it to run its ammonium nitrate and nitric acid upgrade plants and said it did not expect there to be an impact on employees.
It expects to fulfil all ammonia and nitric acid contracts and all orders of ammonium nitrate contracted for delivery in the coming months.
A date for the shutdown has not yet been set.
Emma McClarkin, of the British Beer and Pub Association, said: "This news really does raise serious concerns about the sustainability of the supply of CO2 which does impact our brewers and could lead to a shortage of beer throughout the country."
Alex Cunningham, MP for Stockton South, said: “Today’s announcement from CF Fertilisers is extremely concerning and the Government’s immediate priority should be to find a way to get CF Fertilisers producing in a way that is economical, and ensuring the availability of CO2 for the food and drink industry.
"I am fearful that this announcement could mark the end for UK-based fertiliser production as a result of high gas prices, but also gas transportation charges and carbon costs."
A Government spokesperson said: “We are aware that CF Fertilisers has taken the decision to temporarily halt ammonia production Billingham. Since last autumn, the CO2 market’s resilience has improved, with additional imports, further production from existing domestic sources and better stockpiles.
“While the government continues to examine options for the market to improve resilience over the longer term, it is essential industry acts in the interests of the public and business to do everything it can to meet demand.
“We are engaging with businesses across the food and drinks industry to understand any potential impacts."
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