The United Kingdom carbon dioxide market attained a volume of 725.8 KMT in 2024. The market is projected to witness a compound annual growth rate (CAGR) of 1.5% from 2025 to 2034, reaching a volume of 840.5 KMT by 2034. This steady growth highlights the increasing importance of carbon dioxide in key sectors such as food and beverages, medical applications, and metal fabrication. With the ongoing advancements in carbon capture technologies and regulatory frameworks, the United Kingdom carbon dioxide market is poised for continuous evolution. This post explores the market dynamics, key sources of CO₂, and leading players shaping the future of the industry.

Key Market Segmentation by Source

Ammonia

Ammonia production remains a major source of CO₂ in the United Kingdom carbon dioxide market. As a by-product of ammonia manufacturing, CO₂ is captured and supplied to industries such as food and beverages, where it is used in carbonation processes. Major companies like Yara International ASA and Tata Chemicals Europe Limited have implemented advanced CO₂ recovery systems, improving the sustainability of CO₂ supply and enhancing market growth.

Ethyl Alcohol

Ethyl alcohol production through fermentation is another significant source of CO₂. This bio-based production method is gaining traction due to its eco-friendly nature, aligning with the UK's sustainability goals. Companies like BioCarbonics Ltd. play an essential role in producing CO₂ from bioethanol, contributing to the overall growth of the United Kingdom carbon dioxide market. The demand for CO₂ from this source is expected to rise in line with the growth of the biofuel and beverage sectors.

Substitute Natural Gas (SNG)

SNG processes also provide CO₂, primarily for industrial applications. While the United Kingdom carbon dioxide market continues to focus on sustainable sources, SNG remains an important contributor, especially for sectors that rely on CO₂ in enhanced oil recovery and other applications. Companies such as BOC Limited (Linde) are actively working on technologies to capture CO₂ more efficiently from SNG processes.

Market Segmentation by Production

Biological Production

Biological production methods, including fermentation and anaerobic digestion, are becoming increasingly popular in the United Kingdom carbon dioxide market. These methods produce CO₂ with lower environmental impacts compared to traditional combustion methods. Companies like Ensus UK Limited, a leader in bioethanol production, are key players in expanding the bio-based CO₂ production segment, aligning with growing consumer and regulatory demand for sustainable practices.

Combustion Production

Combustion processes remain a key method for CO₂ production in industrial applications. However, this method is under increasing scrutiny due to its environmental impact. Companies such as Air Liquide UK Ltd and Air Products PLC are advancing technologies in carbon capture, utilization, and storage (CCUS) to reduce emissions from combustion-based CO₂ production, making it more sustainable and efficient.

Key Market Segmentation by End Use

Food and Beverages

The United Kingdom carbon dioxide market is significantly driven by the food and beverages sector. CO₂ is essential in the carbonation of soft drinks and in food preservation and packaging. As the food and beverage industry in the UK continues to expand, driven by changing consumer preferences and a growing demand for innovative products, the demand for CO₂ from this sector is expected to rise. Leading companies such as BioCarbonics Ltd. and BOC Limited (Linde) are at the forefront of supplying high-quality food-grade CO₂ to meet this demand.

Oil and Gas

CO₂ is used in enhanced oil recovery (EOR) within the oil and gas sector. Though the UK's focus on renewable energy is growing, CO₂ remains an essential part of oil extraction processes. Companies like Air Products PLC continue to supply CO₂ for EOR, while also investing in sustainable solutions to reduce the carbon footprint of such operations.

Medical Applications

The medical sector is another key end-user of CO₂, particularly for its role in respiratory therapies, surgeries, and as a component in medical equipment. The United Kingdom carbon dioxide market benefits from the growing healthcare industry, with suppliers such as Nippon Gases and Progases (UK) Ltd providing high-quality medical-grade CO₂ that complies with rigorous safety standards.

Metal Fabrication

The use of CO₂ in metal fabrication, including welding and cutting processes, is significant in the United Kingdom carbon dioxide market. As manufacturing activity increases, particularly in industries such as automotive and construction, the demand for CO₂ for these processes is expected to grow. Key players like Tata Chemicals Europe Limited and Air Liquide UK Ltd are focusing on ensuring a stable and efficient supply of industrial-grade CO₂.

Other Applications

Apart from the primary sectors mentioned above, CO₂ also serves important roles in water treatment, fire suppression, and chemical production. These applications contribute to a stable demand across various industries, reinforcing the diversity of the United Kingdom carbon dioxide market.

Market Dynamics

SWOT Analysis

Strengths

• Strong infrastructure for CO₂ production and supply.
• Established presence of key market players ensuring a reliable supply chain.
• Increasing demand across a wide array of industries, including food and beverages, healthcare, and manufacturing.

Weaknesses

• Reliance on limited primary CO₂ sources such as ammonia and ethyl alcohol.
• Environmental concerns surrounding CO₂ production from traditional combustion methods.

Opportunities

• Growing investment in carbon capture and utilization technologies.
• Increasing demand for bio-based CO₂ solutions.
• Rising regulatory pressure to adopt more sustainable practices across industries.

Threats

• Stringent regulations on emissions could impact traditional CO₂ production methods.
• Potential disruptions in the supply chain due to geopolitical or economic factors.
• Competition from alternative gases and substitutes.

Porter’s Five Forces Analysis

• Threat of New Entrants: Barriers to entry are high due to significant capital requirements and stringent regulatory standards.
• Bargaining Power of Suppliers: CO₂ production in the UK relies on a few key suppliers, which provides them moderate power.
• Bargaining Power of Buyers: Buyers benefit from a variety of suppliers but demand consistent quality and timely delivery.
• Threat of Substitutes: The potential for emerging alternatives, such as other gases, poses a medium to high risk to the traditional CO₂ market.
• Industry Rivalry: Intense competition among major players like Air Liquide UK Ltd, BOC Limited (Linde), and Air Products PLC fosters innovation and cost competitiveness.

Regional Insights

Urban centers like London and Manchester are key drivers of CO₂ demand in the United Kingdom carbon dioxide market. These regions are home to a high concentration of industries requiring CO₂ for industrial applications, medical uses, and food and beverage production. In rural areas, industrial growth is also contributing to an increase in CO₂ demand, and companies like Yara International ASA are optimizing supply chains to meet regional needs.

Competitive Landscape

The United Kingdom carbon dioxide market is highly competitive, with several leading players shaping its future:

• Ensus UK Limited: A prominent player in bioethanol production, contributing significantly to bio-based CO₂ generation.
• BioCarbonics Ltd.: Specializes in producing bio-based CO₂ solutions for the food and beverage sector.
• Tata Chemicals Europe Limited: Supplies industrial CO₂, particularly for metal fabrication and other industrial processes.
• Yara International ASA: A leading supplier of CO₂ derived from ammonia production.
• Air Products PLC: Focuses on innovative carbon capture technologies and CO₂ supply for industrial and oil and gas applications.
• BOC Limited (Linde): Offers a range of CO₂ solutions across sectors, including food and beverages and medical applications.
• Air Liquide UK Ltd: A major player investing in sustainable CO₂ production methods.
• Nippon Gases: Provides high-quality CO₂ for medical and industrial uses.
• Progases (UK) Ltd: Specializes in the supply of CO₂ for diverse industrial applications.