Dry Ice Demand Swells as Covid-19 Vaccines Prepare for Deployment

Source: By Jesse Newman, Wall Street Journal • Posted: Sunday, December 6, 2020

Coronavirus shots requiring ultracold temperatures, coupled with holiday food shipments, kick off ‘mad scramble’ for solid carbon dioxide

Covid-19 vaccines awaiting regulatory approval will require ultracold temperatures for shipping and storage, and makers of dry ice are bracing for a surge in demand.

Frozen carbon dioxide, or dry ice, is one piece of a sprawling supply chain being assembled by businesses from airlines to grocers to deliver the shots. Across the country, dry-ice makers are planning to boost production of the frigid storage material needed to ship hundreds of millions of doses to hospitals, pharmacies and physicians’ offices.

Brad Dunn of Cee Kay Supply in St. Louis said dry-ice buyers are asking him, ‘How much can you make and how quick?’

Brad Dunn, vice president of Cee Kay Supply Inc., which makes dry ice at three Missouri plants, said he has fielded calls from public-health departments, medical-supply and logistics companies planning to take part in what Pfizer Inc. has called its biggest vaccination campaign ever.

Pfizer is expected to have the first Covid-19 vaccine cleared by U.S. regulators, kicking off a mass vaccination drive that will eventually include other shots. The drugmaker expects to distribute 25 million doses in the U.S. this year and another 1.3 billion globally in 2021.

Few pharmaceutical products have required such low temperatures for storage and transit. Pfizer’s vaccine must be shipped and stored at minus 70 degrees Celsius to remain stable and effective. The temperature of dry ice is around minus 78 degrees Celsius. A vaccine Moderna Inc. is developing must also be stored at cold temperatures, though not as low as those Pfizer’s shot requires. Once thawed, Pfizer’s vaccine can be refrigerated for up to five days.

Liquid carbon dioxide is delivered to a manufacturer of dry ice, the solid form of the compound, which has a temperature of around minus 78 degrees Celsius.

Mr. Dunn bought a machine in November to boost the volume of dry-ice pellets that Cee Kay Supply can make. He has added insulated tanks to store more carbon dioxide and more than 100 industrial coolers capable of transporting roughly $30,000 worth of dry ice.

Requests for dry ice are preliminary, Mr. Dunn said, since the Food and Drug Administration hasn’t yet authorized a shot for emergency use, though both Moderna and Pfizer are seeking that approval.

“They’re asking, ‘How much can you make and how quick?’” Mr. Dunn said. “We could be busy in December.”

United Parcel Service Inc. said in November that it had increased dry-ice production capacity at its own facilities in the U.S. and Canada to 1,200 pounds an hour. Pfizer said it has also purchased equipment to produce dry ice at its facilities in Kalamazoo, Mich., and Pleasant Prairie, Wis.

Dry ice is typically made from the carbon dioxide byproducts of industrial processes like ethanol and fertilizer production.

Cold Jet LLC has quadrupled production of dry-ice making equipment this year to meet a “mad scramble” for capacity from vaccine manufacturers, logistics companies and others, said chief executive Gene Cooke.

“It’s been like a herd of mustangs,” Mr. Cooke said.

Some hospitals and clinics that are expected to serve as early vaccination sites are worried about potential dry-ice shortages.

Like most health systems, Massachusetts-based Baystate Health doesn’t normally keep dry ice on hand and is searching for alternative sources, said chief physician executive Andrew Artenstein.

“Everyone at the same time is going to need the same thing,” he said.

Topping OffCarbon dioxide used to make dry ice is abyproduct of ethanol output, which hasrecovered after falling early in the pandemic.U.S. ethanol productionSource: Energy Department
.million barrels a dayJan. 2020Nov.0.00.20.40.60.81.01.2

Dry ice, used in frozen-food shipments and fog machines, is made from carbon dioxide, a byproduct of industrial processes like ethanol and fertilizer production. Supplies of carbon dioxide tightened last spring as stay-at-home orders took effect and many Americans stopped driving, slashing demand for ethanol, a corn-based biofuel blended into gasoline.

Ethanol production has since recovered. Carbon-dioxide suppliers are confident they can meet the coming demand for dry ice, said Rich Gottwald, chief executive of the Compressed Gas Association, a trade group. He estimated the vaccination drive would boost demand for carbon dioxide from dry-ice manufacturers by 5% nationally.

Mr. Gottwald said big carbon-dioxide suppliers that also manufacture dry ice haven’t begun increasing production yet because the product has a short shelf life. “As soon as the demand is there, we will ramp up,” he said.

Buddy Collen, general manager of Texas-based Reliant Dry Ice, said he is getting calls from hospitals and health departments as well as existing customers seeking to ensure supplies. Many of Reliant’s eight plants nationwide are already running 24/7 because of high demand from food shippers reaching customers at home, Mr. Collen said. He said he is working to add shifts to run ice machines longer.

“As the time gets closer to the vaccine rollout, it’s going to get frantic,” he said.

With U.S. approval still pending for two Covid-19 vaccines, some dry-ice makers are waiting to boost production because the product has a short shelf life.

Demand for dry ice to ship food has ballooned during the pandemic as consumers order more goods online and producers introduce or expand home delivery, executives said.

Cee Kay’s Mr. Dunn said dry-ice orders from food companies selling everything from pies to steak online have risen as much as 50% this year compared with 2019. Even his own company will use more dry ice than before to send steaks to its 130 employees in lieu of a Christmas party.

Roger O’Brien, chief executive of California-based Santa Monica Seafood, recently paid $35,000 for a dry-ice maker to ensure the company can ship boxes of frozen shrimp and salmon to customers through its new e-commerce division as the vaccination drive gets under way.

The Wisconsin Cheese Makers Association has appealed to state and federal officials to reserve some 350,000 pounds of dry ice each week for the distribution of ingredients needed to produce goods like cheese and yogurt.

Daniel Koerner, co-owner of Massachusetts-based American Dry Ice Corp., said he might have to ration supplies to food companies next year to give priority to vaccine distributors.

“It’s a tricky situation,” he said. “We’ll have dry ice for the vaccine over anything else.”

Demand for dry ice to ship food has ballooned during the coronavirus pandemic as consumers order more online and producers expand delivery options.

—Jared S. Hopkins contributed to this article.

Write to Jesse Newman at jesse.newman@wsj.com

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