United Kingdom Carbon Dioxide Market Size, Share, Trends & Growth Analysis | 2034

The carbon dioxide (CO2) market plays a crucial role in various industries, including food and beverage, chemical manufacturing, healthcare, and energy production. As a colorless, odorless gas, CO2 is utilized for a wide array of purposes, ranging from carbonating soft drinks to aiding in the production of chemicals and pharmaceuticals. In the context of the United Kingdom (UK), the CO2 market has seen substantial growth over the years. In 2024, the UK carbon dioxide market achieved a volume of 725.80 KMT (kilotons), and it is expected to grow at a compound annual growth rate (CAGR) of 1.50% during the period from 2025 to 2034, reaching a volume of 842.32 KMT by the end of the forecast period.

This article provides a comprehensive analysis of the UK carbon dioxide market, its growth drivers, key industry players, market trends, challenges, and the future outlook for the years to come.

Overview of the UK Carbon Dioxide Market

Market Definition and Scope

Carbon dioxide is a naturally occurring gas in the Earth's atmosphere, and it is widely produced through various industrial processes, including the combustion of fossil fuels and the fermentation of organic matter. In industrial applications, CO2 is predominantly used in the following forms:

• Liquid CO2: Used in refrigeration and cooling processes, as well as in the extraction of materials like oils and gases.
• Solid CO2 (Dry Ice): Primarily used for cooling purposes, especially in transportation and storage of perishable goods.
• Gaseous CO2: Employed in diverse applications, including carbonating beverages, fire extinguishing systems, and enhanced oil recovery.

The UK carbon dioxide market, valued at 725.80 KMT in 2024, is segmented into various end-use industries, such as food and beverage, healthcare, oil and gas, and chemicals. Additionally, CO2 is an essential component in industrial applications such as welding, water treatment, and even agricultural production.

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Market Size and Forecast

As mentioned earlier, the UK carbon dioxide market achieved a volume of 725.80 KMT in 2024, and it is projected to witness a steady growth rate of 1.50% from 2025 to 2034. By 2034, the market is expected to reach a volume of 842.32 KMT. This growth is reflective of the growing demand for CO2 across various sectors, particularly in food and beverage carbonation, enhanced oil recovery, and as an industrial gas in several manufacturing processes.

Key Market Drivers

1. Growing Demand from the Food and Beverage Industry

The food and beverage industry is one of the largest consumers of carbon dioxide in the UK. CO2 is predominantly used in this sector for carbonating soft drinks, carbonating beer, and in packaging and preservation. The increasing consumption of carbonated beverages, particularly in regions with high population density like London, continues to fuel demand for CO2.

Moreover, CO2 is also used in the preservation of perishable goods. Modified atmosphere packaging (MAP) employs CO2 to extend the shelf life of fresh foods like meat, fruits, and vegetables. As the demand for convenience foods rises and consumer preferences shift toward healthier, fresh, and packaged foods, the need for CO2 in food preservation is expected to continue growing.

2. Demand for CO2 in Healthcare

Carbon dioxide is used in medical applications, especially in surgeries and diagnostic procedures. It serves as an insufflating agent during laparoscopic surgeries, where CO2 is used to inflate the abdomen and provide clear visibility for surgeons. Additionally, CO2 is used in cryotherapy and respiratory treatments. With the healthcare sector expanding due to aging populations and increasing medical needs, the demand for CO2 in medical applications is set to increase.

3. Environmental Regulations and Carbon Capture Initiatives

With the UK government’s ambitious climate goals, including achieving net-zero carbon emissions by 2050, carbon capture and storage (CCS) technologies are gaining prominence. CO2 plays a significant role in such initiatives, where captured CO2 can be stored or repurposed for other applications, such as enhanced oil recovery or even as feedstock for the production of chemicals.

4. Growth in Oil and Gas Industry Applications

Enhanced oil recovery (EOR) methods often involve the injection of CO2 into oil reservoirs to increase the extraction of crude oil. While the use of CO2 in this field has seen fluctuations based on global oil prices, the overall demand for CO2 in EOR is still significant and is expected to rise over the next decade as energy companies continue to seek ways to optimize oil extraction processes.

5. Technological Advancements in Industrial Applications

Technological advancements across various sectors have also contributed to increased CO2 demand. CO2 is used as a refrigerant in industrial refrigeration systems, which are employed across sectors such as food storage, chemicals, and pharmaceuticals. The drive toward energy-efficient and environmentally friendly cooling systems has led to innovations in CO2-based refrigeration technologies, which further expands market opportunities.

Key Market Segments

1. By Application

• Food and Beverage: The dominant sector for CO2 consumption, driven by carbonation and preservation applications.
• Healthcare: Utilized in surgical procedures and cryotherapy.
• Oil and Gas: Primarily for enhanced oil recovery techniques.
• Chemical Manufacturing: CO2 is used in the production of chemicals like urea, methanol, and carbonates.
• Others: Including applications in industrial refrigeration, welding, and water treatment.

2. By Distribution Channel

• On-site Production: Companies often produce CO2 on-site for large-scale operations in industries such as food and beverage or chemical manufacturing.
• Bulk Delivery: This method involves the transportation of CO2 in bulk via pipelines or tankers to various industries.
• Packaged CO2: Smaller quantities of CO2 are distributed in cylinders or cryogenic tanks for smaller-scale needs, especially in medical and industrial applications.

Key Industry Players

The UK carbon dioxide market is characterized by the presence of several prominent players. These companies play a significant role in the production, distribution, and supply of CO2 to various industries. Among the key players in the market are:

• BOC Limited
• Air Products PLC
• Air Liquide UK Ltd.
• Nippon Gases UK Limited
• PROGASES (UK) Ltd.

These companies are at the forefront of providing CO2 solutions to various industries. They continue to innovate and expand their services to meet the growing demand for carbon dioxide, all while maintaining compliance with environmental regulations.

Market Trends and Opportunities

1. Sustainability and Circular Economy

As environmental concerns become more pressing, there is an increasing focus on sustainability across the CO2 industry. Many companies are working on capturing CO2 emissions and recycling them into useful products. This circular economy model, which involves repurposing CO2 in various industries such as chemicals, agriculture, and fuel production, is gaining momentum and presents significant opportunities for market growth.

2. Rise of CO2-based Refrigeration Technologies

The refrigeration industry is moving toward more sustainable and energy-efficient solutions. Traditional refrigerants with high global warming potential (GWP) are being replaced by natural refrigerants such as CO2. This shift is driven by both regulatory measures and technological advancements that have made CO2 refrigeration systems more viable. This trend is likely to drive future demand for CO2 in the refrigeration sector, contributing to market growth.

3. CO2 Utilization in Green Energy Solutions

Carbon dioxide is being increasingly explored as a raw material for producing renewable energy solutions, including biofuels and synthetic fuels. Companies are looking at ways to capture CO2 and convert it into valuable products such as biofuels, which could reduce the overall environmental impact of energy production. These advancements could open new markets for CO2 in the energy sector.

Market Challenges

1. Supply Chain and Infrastructure Constraints

While demand for CO2 is growing, ensuring a steady and reliable supply of CO2 remains a challenge. The supply chain for CO2 can be vulnerable to disruptions, as seen in recent years when the UK faced temporary CO2 shortages due to supply chain issues and plant closures. Moreover, the infrastructure required to transport and store CO2 safely is complex and costly, which could limit the expansion of the market in certain regions.

2. Environmental and Regulatory Concerns

As the CO2 market grows, so does the scrutiny of its environmental impact. CO2 emissions, if not captured or utilized properly, contribute to global warming and climate change. Strict environmental regulations and sustainability goals are forcing companies to develop cleaner and more efficient methods of CO2 production and consumption. This is a challenge that the industry will need to address to maintain its long-term growth trajectory.

3. Price Volatility

The price of CO2 can be volatile, depending on factors such as global supply-demand dynamics, energy prices, and regulatory changes. For example, fluctuations in oil prices or disruptions in supply chains can significantly affect the cost of CO2. Companies that rely heavily on CO2 for their operations must navigate these pricing uncertainties to maintain profitability.

Future Outlook

The UK carbon dioxide market is poised for steady growth over the next decade. With a projected CAGR of 1.50% from 2025 to 2034, the market is expected to reach a volume of 842.32 KMT by 2034. Several factors will contribute to this growth, including the expansion of the food and beverage sector, advancements in medical applications, increasing demand from the oil and gas industry, and the growth of CO2-based refrigeration technologies.

The key players in the market, such as BOC Limited, Air Products PLC, Air Liquide UK Ltd., Nippon Gases UK Limited, and PROGASES (UK) Ltd., will continue to drive innovation and lead efforts to ensure a sustainable and reliable supply of CO2.

Overall, the UK carbon dioxide market is set to evolve in response to changing environmental policies, technological advancements, and shifting industry needs, positioning itself as a critical component in both industrial operations and sustainability efforts for years to come.

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