The United Kingdom carbon dioxide (CO₂) market attained a volume of 725.8 KMT in 2024. The market is estimated to witness a CAGR of 1.5% during 2025-2034, reaching a volume of 840.5 KMT by 2034. This steady growth in the United Kingdom carbon dioxide market reflects the increasing importance of CO₂ across various industries, such as food and beverages, medical applications, and metal fabrication. Key market drivers include advancements in carbon capture technologies, regulatory frameworks, and the growing adoption of sustainable production methods.
In this blog post, we’ll explore the key segments of the United Kingdom carbon dioxide market, assess its production dynamics, and highlight the role of leading companies shaping this market’s future.
Key Market Segmentation by Source in the United Kingdom Carbon Dioxide Market
Ammonia
Ammonia production is one of the primary sources of CO₂ in the United Kingdom carbon dioxide market. CO₂ is a by-product of ammonia manufacturing, which is essential for industries that require food-grade CO₂. Companies like Yara International ASA and Tata Chemicals Europe Limited are playing a vital role in enhancing CO₂ capture through the integration of advanced recovery systems within ammonia production processes. This ensures a sustainable and continuous supply of CO₂ for various industrial applications.
Ethyl Alcohol
Ethyl alcohol fermentation is another significant source of CO₂ in the UK. The growing demand for alcoholic beverages and biofuels is driving CO₂ production from fermentation processes. As sustainability becomes more important, bio-based CO₂, such as that derived from BioCarbonics Ltd., provides a cleaner alternative to fossil-fuel-based CO₂ sources, catering to the rising demand for eco-friendly CO₂ solutions in industries like food and beverages.
Substitute Natural Gas (SNG)
Substitute Natural Gas (SNG) also contributes to CO₂ production in the UK, particularly for industrial applications. As the UK focuses on energy transition efforts, the CO₂ captured from SNG processes is increasingly used in a variety of sectors. Companies such as BOC Limited (Linde) are pioneering technologies that enable efficient CO₂ capture from SNG, while also supporting sustainability goals.
United Kingdom Carbon Dioxide Market Segmentation by Production
Biological Production
Biological production methods such as fermentation and anaerobic digestion are gaining traction in the United Kingdom carbon dioxide market due to their environmental benefits. These processes are more sustainable than traditional combustion methods, with companies like Ensus UK Limited leading the way in bioethanol production that contributes significantly to biological CO₂ generation. The growth of bio-based CO₂ production aligns with the increasing demand for greener alternatives in various industries.
Combustion Production
Combustion remains a prominent method of CO₂ production, especially in energy-intensive industrial processes. However, the environmental challenges posed by combustion have led to the development of carbon capture, utilization, and storage (CCUS) technologies. Companies like Air Products PLC and Air Liquide UK Ltd are actively investing in CCUS systems to minimize the environmental impact while ensuring that CO₂ is still available for industrial use.
United Kingdom Carbon Dioxide Market Segmentation by End Use
Food and Beverages
The food and beverage industry remains the largest consumer of CO₂ in the United Kingdom carbon dioxide market. CO₂ is used extensively in carbonated beverages, food packaging, and preservation processes. With the UK’s vibrant food and drink sector growing, companies like BioCarbonics Ltd. and BOC Limited (Linde) are focusing on sustainable CO₂ solutions to cater to the increasing demand for food-grade CO₂.
Oil and Gas
In the oil and gas sector, CO₂ is used for enhanced oil recovery (EOR) processes, where CO₂ is injected into oil reservoirs to increase production. Although the UK is transitioning towards renewable energy sources, EOR continues to demand CO₂, with companies such as Air Products PLC providing specialized CO₂ for these applications. The demand in this sector is expected to decline over time, but the industry will still remain a key contributor to CO₂ consumption.
Medical Applications
In the medical field, CO₂ plays a vital role in surgeries, anesthesia, and respiratory therapies. The growing healthcare industry in the UK, alongside advancements in medical technologies, is expected to continue boosting demand for medical-grade CO₂. Companies like Nippon Gases and Progases (UK) Ltd are major suppliers of medical-grade CO₂, ensuring compliance with strict safety and quality standards.
Metal Fabrication
CO₂ is widely used in the metal fabrication industry, specifically for welding and cutting applications. As manufacturing activities increase in sectors like automotive and construction, the demand for CO₂ in metal fabrication is expected to grow. Companies such as Tata Chemicals Europe Limited and Air Liquide UK Ltd are key players meeting the demand for CO₂ in these industrial processes.
Other Applications
Other industries using CO₂ include chemical production, water treatment, and fire suppression. These diverse applications ensure a steady and consistent demand for CO₂ across multiple sectors, further strengthening the market’s foundation.
Market Dynamics of the United Kingdom Carbon Dioxide Market
SWOT Analysis
Strengths
- Established infrastructure for CO₂ production, ensuring a stable supply.
- Diverse applications of CO₂ across several industrial sectors.
- Strong presence of both global and local suppliers offering innovative CO₂ solutions.
Weaknesses
- Environmental concerns and dependency on conventional CO₂ production methods like combustion.
- Reliance on limited sources such as ammonia and ethyl alcohol for CO₂ supply.
Opportunities
- Growth of carbon capture, utilization, and storage (CCUS) technologies.
- Increasing demand for bio-based CO₂ production methods that align with sustainability goals.
- Expanding end-use applications in sectors such as food and beverages, medical, and metal fabrication.
Threats
- Stringent environmental regulations impacting traditional CO₂ production methods.
- Competition from alternative gases and substitutes in certain industrial applications.
- Supply chain vulnerabilities due to geopolitical or economic factors.
Porter’s Five Forces Analysis
- Threat of New Entrants: High capital requirements and regulatory barriers limit the entry of new players.
- Bargaining Power of Suppliers: Limited CO₂ sources give suppliers moderate bargaining power.
- Bargaining Power of Buyers: Buyers have access to multiple suppliers but demand consistent quality and delivery.
- Threat of Substitutes: Emerging alternatives may pose a long-term threat to CO₂ demand in specific applications.
- Industry Rivalry: Intense competition among established players drives innovation and price competitiveness.
Regional Insights in the United Kingdom Carbon Dioxide Market
Key urban centers like London, Birmingham, and Manchester drive significant demand for CO₂ due to their industrial concentrations. However, rural regions are also witnessing growth as industries expand into less urbanized areas. Companies such as BOC Limited (Linde) and Air Liquide UK Ltd are optimizing supply chain management to meet regional demand and ensure consistent delivery.
Competitive Landscape in the United Kingdom Carbon Dioxide Market
The United Kingdom carbon dioxide market is competitive, with both global and local players contributing to its growth. Key players include:
- Ensus UK Limited: A leader in bioethanol production and bio-based CO₂ generation.
- BioCarbonics Ltd.: Specializes in sustainable CO₂ solutions for the food and beverage sector.
- Tata Chemicals Europe Limited: Offers industrial-grade CO₂ for metal fabrication and other applications.
- Yara International ASA: Focuses on integrating CO₂ recovery systems within ammonia plants.
- Air Products PLC: A global leader in providing CO₂ solutions with a focus on carbon capture technologies.
- BOC Limited (Linde): A major player offering CO₂ for medical and industrial applications.
- Air Liquide UK Ltd: Invests in sustainable CO₂ production and distribution technologies.
- Nippon Gases: Supplies high-quality CO₂ for industrial and medical sectors.
- Progases (UK) Ltd: Focuses on meeting specific CO₂ requirements for various industries.
These companies are investing in innovation, sustainability, and new technologies to meet the evolving needs of the United Kingdom carbon dioxide market.