The United Kingdom carbon dioxide market reached a volume of 725.8 KMT in 2024, with projected growth at a CAGR of 1.5% between 2025 and 2034, reaching a volume of 840.5 KMT by 2034. Carbon dioxide (CO2) plays a crucial role in various industries, including food and beverage, healthcare, and manufacturing, making it a key element in the UK’s industrial landscape.
This blog explores the key drivers, challenges, emerging trends, and market segmentation that shape the growth of the carbon dioxide market in the UK over the next decade.
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Understanding the Carbon Dioxide Market
Carbon dioxide is widely used across multiple industries due to its versatility. It is utilised in food processing, carbonated beverages, medical applications, and industrial processes like welding and chemical manufacturing. With increasing emphasis on sustainability and efficient resource utilisation, industries are exploring innovative ways to produce and use CO2, contributing to steady market growth.
Key Drivers of Market Growth
Expanding Food and Beverage Industry The food and beverage sector is the largest consumer of carbon dioxide in the UK. CO2 is critical for carbonating beverages, preserving packaged foods, and chilling products during transportation. The growing demand for processed and convenience foods drives this sector’s growth.
Rising Medical and Healthcare Applications Carbon dioxide is widely used in the healthcare industry for surgical procedures, respiratory treatments, and laboratory applications. The increasing healthcare expenditure and advancements in medical technologies are driving demand.
Growing Industrial Applications CO2 is integral to various industrial processes, including welding, metal fabrication, and enhanced oil recovery (EOR). The steady growth of the UK’s manufacturing and energy sectors fuels demand in this segment.
Focus on Carbon Capture and Utilisation (CCU) The UK’s commitment to reducing greenhouse gas emissions and achieving net-zero targets has spurred interest in carbon capture and utilisation (CCU) technologies. Capturing CO2 from industrial processes and reusing it in value-added applications is becoming a significant market driver.
Demand for Sustainable Refrigerants CO2 is increasingly being adopted as an eco-friendly refrigerant in the cold chain and retail sectors, aligning with global efforts to phase out harmful hydrofluorocarbons (HFCs).
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Challenges in the Carbon Dioxide Market
Supply Chain Disruptions Carbon dioxide production relies on by-products from ammonia plants and other industrial processes. Fluctuations in these industries can lead to supply shortages, affecting availability and pricing.
Environmental Concerns Despite its utility, CO2 is a greenhouse gas. The market faces scrutiny for its environmental impact, prompting industries to adopt sustainable production methods.
High Production Costs Advanced technologies for capturing and utilising CO2 involve significant capital investment, limiting adoption among smaller players.
Stringent Regulations The UK’s stringent environmental regulations on emissions and industrial processes create challenges for traditional CO2 production methods, pushing companies to innovate.
Competition from Alternatives Alternative technologies and materials, such as nitrogen and argon, compete with CO2 in certain applications, particularly in food processing and welding.
Emerging Trends in the Carbon Dioxide Market
Advancements in Carbon Capture Technologies Innovations in carbon capture and storage (CCS) technologies are making it more feasible to trap and reuse CO2. This reduces environmental impact while providing industries with a reliable source of carbon dioxide.
Green CO2 Production The market is witnessing a shift towards green CO2 production, where carbon dioxide is sourced from renewable processes, such as biomass fermentation, instead of fossil fuel-based methods.
Use in Agriculture CO2 is gaining traction in the agriculture sector for use in greenhouses to enhance plant growth. This trend aligns with efforts to improve food security and optimise agricultural yields.
Expansion of Beverage Carbonation With the rise of craft beverages and consumer preference for carbonated drinks, the demand for CO2 in the beverage industry continues to grow.
Integration with Circular Economy Models Companies are integrating carbon dioxide usage into circular economy frameworks, focusing on minimising waste and maximising resource efficiency.
Market Segmentation Insights
By Source
Ammonia Plants: Dominates the market as a major source of CO2 production.
Ethanol Plants: Growing as a reliable alternative source.
Natural Sources: Includes wells and geothermal sources.
Industrial Emissions: Carbon capture technologies are converting emissions into usable CO2.
By Application
Food and Beverage: Largest segment, driven by carbonated drinks and food preservation.
Healthcare: Growing segment due to increasing surgical and diagnostic applications.
Industrial Processes: Includes welding, oil recovery, and chemical manufacturing.
Agriculture: Emerging application for greenhouse cultivation.
Refrigeration: Expanding due to the demand for sustainable refrigerants.
By Region
England: Leading the market due to its robust industrial base and population density.
Scotland: Significant growth driven by renewable energy initiatives and carbon capture projects.
Wales and Northern Ireland: Emerging markets with increasing industrial and agricultural activities.
Future Outlook
The United Kingdom carbon dioxide market is set to grow steadily, reaching 840.5 KMT by 2034. The emphasis on sustainability, coupled with technological advancements, will shape the market landscape. To harness growth opportunities, stakeholders should:
Invest in green production technologies and carbon capture solutions.
Expand applications in agriculture and refrigeration.
Collaborate with government initiatives to align with net-zero goals.
As the UK continues its transition to a low-carbon economy, the carbon dioxide market will play a pivotal role in supporting industrial growth while addressing environmental challenges. The future of the industry lies in its ability to innovate and adapt to evolving consumer demands and regulatory frameworks.