The United Kingdom carbon dioxide market attained a volume of 725.8 KMT in 2024. The market is projected to grow at a CAGR of 1.5% during the forecast period of 2025-2034, reaching a volume of 840.5 KMT by 2034. This growth reflects the increasing reliance on CO₂ in key industries, such as food and beverages, medical applications, and metal fabrication. Additionally, technological advancements in carbon capture and sustainable production methods are shaping the trajectory of the UK carbon dioxide market, making it a critical component of the country’s industrial landscape.
This blog post delves into the core segments of the United Kingdom carbon dioxide market, explores its production dynamics, and highlights key companies driving its growth.
Key Market Segmentation by Source
Ammonia
Ammonia production remains one of the primary sources of CO₂ in the UK. During the ammonia manufacturing process, CO₂ is produced as a by-product, which is essential for various industries requiring food-grade carbon dioxide. Leading companies like Yara International ASA and Tata Chemicals Europe Limited have invested in advanced recovery technologies to enhance the sustainability of CO₂ capture, ensuring a stable supply to meet industrial demand.
Ethyl Alcohol
Ethyl alcohol, especially in the biofuel and beverage industries, is a significant source of CO₂ in the UK. This fermentation-based process provides bio-based CO₂, which is gaining popularity due to its lower environmental impact compared to traditional fossil-fuel-based CO₂. BioCarbonics Ltd. is at the forefront of this trend, leveraging bio-based production methods to meet the growing demand for sustainable CO₂ solutions.
Substitute Natural Gas (SNG)
Substitute natural gas (SNG) processes also contribute to the CO₂ supply chain in the United Kingdom carbon dioxide market. Companies like BOC Limited (Linde) are developing innovative CO₂ capture systems to recover carbon dioxide from SNG processes, making it a valuable source for industrial applications while minimizing emissions.
Market Segmentation by Production
Biological Production
Biological CO₂ production methods, such as fermentation and anaerobic digestion, are gaining traction in the UK. These methods are more sustainable and help reduce the environmental impact compared to traditional CO₂ production. Companies like Ensus UK Limited, which specializes in bioethanol production, are playing a pivotal role in providing bio-based CO₂ to meet the demands of various industries.
Combustion Production
While biological methods gain popularity, combustion remains an essential method of CO₂ production in the United Kingdom carbon dioxide market. This process, primarily used in industrial and energy sectors, presents challenges related to emissions. However, advancements in carbon capture, utilization, and storage (CCUS) technologies, developed by companies like Air Products PLC and Air Liquide UK Ltd, are making combustion-based CO₂ production more sustainable.
Key Market Segmentation by End Use
Food and Beverages
The food and beverages industry is the largest consumer of CO₂ in the United Kingdom carbon dioxide market. CO₂ is used in carbonated beverages, food preservation, and packaging. The growing demand for carbonated drinks and sustainable packaging solutions is expected to drive the market further. Companies like BioCarbonics Ltd. and BOC Limited (Linde) are focusing on providing food-grade CO₂ through environmentally friendly production methods to meet industry needs.
Oil and Gas
In the oil and gas industry, CO₂ is primarily used for enhanced oil recovery (EOR) processes. Although the UK is transitioning to renewable energy, CO₂ continues to play a crucial role in EOR. As the demand for CO₂ in this sector stabilizes, companies such as Air Products PLC continue to supply high-quality CO₂ to support these processes.
Medical Applications
CO₂ is essential in the medical industry for surgeries, respiratory therapies, and anesthesia. The United Kingdom carbon dioxide market is expected to see steady growth in the medical sector due to the increased demand for CO₂ in healthcare applications. Companies like Nippon Gases and Progases (UK) Ltd are key suppliers of medical-grade CO₂, ensuring compliance with stringent safety standards.
Metal Fabrication
The metal fabrication industry relies heavily on CO₂, particularly in welding and cutting processes. With the increasing demand from manufacturing sectors like automotive and construction, the United Kingdom carbon dioxide market will continue to see rising demand for industrial CO₂. Tata Chemicals Europe Limited and Air Liquide UK Ltd are key players supplying industrial-grade CO₂ for these applications.
Other Applications
CO₂ is also used in water treatment, fire suppression, and chemical production, contributing to the consistent demand across multiple sectors. As the UK’s industrial base continues to evolve, the demand for CO₂ will be sustained through diverse applications in various industries.
Market Dynamics
SWOT Analysis
Strengths
- Well-established infrastructure for CO₂ production and distribution.
- Diverse end-use applications across several industries.
- Growing demand for sustainable CO₂ production methods.
Weaknesses
- Dependence on a few primary CO₂ sources such as ammonia and ethyl alcohol.
- Environmental concerns related to traditional combustion-based CO₂ production methods.
Opportunities
- Advancements in carbon capture and utilization technologies.
- Increased adoption of bio-based CO₂ production methods.
- Rising demand for eco-friendly products in the food and beverage sector.
Threats
- Stringent regulations around emissions and CO₂ production.
- Supply chain disruptions due to global economic or political instability.
- Competition from alternative gases and substitutes.
Porter’s Five Forces Analysis
- Threat of New Entrants: High capital investment requirements and strict regulations act as significant barriers to market entry.
- Bargaining Power of Suppliers: The limited number of CO₂ production sources gives suppliers moderate power.
- Bargaining Power of Buyers: Buyers benefit from multiple suppliers but demand high quality and consistency in CO₂ supply.
- Threat of Substitutes: Emerging alternatives to CO₂ in certain applications may pose a threat in the long term.
- Industry Rivalry: Intense competition among established players like Air Liquide UK Ltd, BOC Limited (Linde), and Air Products PLC fosters innovation and price competitiveness.
Regional Insights
The United Kingdom carbon dioxide market is driven by urban centers such as London, Manchester, and Birmingham, which house a high concentration of industries. However, growth is also observed in rural areas as industries extend beyond major cities. Effective supply chain management by companies like Air Liquide UK Ltd and BOC Limited (Linde) ensures balanced distribution across the country, meeting regional demand efficiently.
Competitive Landscape
The United Kingdom carbon dioxide market is characterized by the presence of key players, each focusing on innovation, sustainability, and efficiency. Notable companies include:
- Ensus UK Limited: Specializes in bioethanol production for bio-based CO₂ generation.
- BioCarbonics Ltd.: Provides sustainable CO₂ solutions for the food and beverage industry.
- Tata Chemicals Europe Limited: Supplies industrial-grade CO₂ for metal fabrication and other industrial applications.
- Yara International ASA: Invests in CO₂ recovery from ammonia plants for sustainable production.
- Air Products PLC: A leader in carbon capture and sustainable CO₂ production.
- BOC Limited (Linde): Offers a broad range of CO₂ solutions for industrial, medical, and food-grade applications.
- Air Liquide UK Ltd: Focuses on innovative CO₂ production and distribution technologies.
- Nippon Gases: Provides medical-grade CO₂ for healthcare applications.
- Progases (UK) Ltd: Supplies high-quality CO₂ to meet specific industry needs.
