The United Kingdom carbon dioxide market size 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 its increasing importance in various industries, including food and beverages, medical applications, and metal fabrication. The market’s trajectory is driven by advancements in carbon capture technologies, evolving regulatory frameworks, and the adoption of sustainable production methods.
In this blog post, we will explore the key segments of the United Kingdom carbon dioxide market, assess its production dynamics, and analyze the end-use industries driving demand.
Key Market Segmentation by Source
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, a crucial process for industries requiring food-grade carbon dioxide. Companies like Yara International ASA and Tata Chemicals Europe Limited have invested in CO₂ recovery systems to improve efficiency and ensure a sustainable CO₂ supply.
Ethyl Alcohol
Ethyl alcohol production, primarily through fermentation, is another significant source of CO₂. This bio-based CO₂ aligns with the growing emphasis on sustainability, offering a cleaner alternative to fossil-fuel-based CO₂ sources. With the increasing demand for biofuels and beverages, companies such as BioCarbonics Ltd. are playing a pivotal role in providing bio-based CO₂ solutions to meet market demand.
Substitute Natural Gas (SNG)
Substitute Natural Gas (SNG) processes also contribute to the CO₂ supply in the United Kingdom carbon dioxide market. With the UK’s push toward alternative fuels and energy transition, SNG has emerged as a complementary CO₂ source, particularly for industrial applications. Companies like BOC Limited (Linde) are focused on developing technologies to capture CO₂ efficiently from SNG processes.
Market Segmentation by Production
Biological Production
Biological production of CO₂, through methods such as fermentation and anaerobic digestion, is becoming increasingly relevant in the United Kingdom carbon dioxide market. These eco-friendly processes not only contribute to CO₂ generation but also align with sustainability goals, providing industries with a reduced environmental footprint. Ensus UK Limited, with its bioethanol production, plays a key role in bio-based CO₂ generation.
Combustion Production
Combustion processes, commonly used in industrial and energy sectors, remain a significant method of CO₂ production. However, this method faces challenges related to emissions and environmental concerns. Companies such as Air Liquide UK Ltd and Air Products PLC are investing in carbon capture, utilization, and storage (CCUS) technologies to mitigate emissions while continuing to meet industrial CO₂ needs.
Key Market Segmentation by End Use
Food and Beverages
The food and beverage industry is the largest consumer of CO₂ in the United Kingdom carbon dioxide market. CO₂ is used extensively in carbonated beverages, food preservation, and packaging processes. With the UK’s vibrant food and drink sector expanding, particularly in urban areas, demand for food-grade CO₂ is expected to rise steadily. Companies like BioCarbonics Ltd. and BOC Limited (Linde) are focusing on providing sustainable CO₂ solutions for the food and beverage industry.
Oil and Gas
In the oil and gas industry, CO₂ is used for enhanced oil recovery (EOR) processes. While the UK is transitioning to renewable energy sources, CO₂ remains a critical component in EOR applications. The demand for CO₂ in this sector is expected to decline slightly as greener energy alternatives take precedence, but companies like Air Products PLC continue to support this application, ensuring CO₂ is available for oil recovery processes.
Medical Applications
CO₂ is essential in the medical field for uses such as surgeries, respiratory therapies, and anesthesia. The growing healthcare sector in the United Kingdom, coupled with advancements in medical technologies, is expected to drive increased demand for medical-grade CO₂. Companies like Nippon Gases and Progases (UK) Ltd are key players in supplying high-quality CO₂ for medical applications.
Metal Fabrication
CO₂ is widely used in metal fabrication, particularly in processes like welding and cutting. As manufacturing activities grow in sectors like automotive, construction, and electronics, the demand for CO₂ in metal fabrication is set to rise. Companies such as Tata Chemicals Europe Limited and Air Liquide UK Ltd are integral in meeting CO₂ needs for the metal fabrication industry.
Other Applications
CO₂ is used in a wide range of other applications, including chemical production, water treatment, and fire suppression. The diverse applications of CO₂ ensure consistent demand across various sectors, contributing to the stability of the United Kingdom carbon dioxide market.
Market Dynamics
SWOT Analysis
Strengths
- Established infrastructure for CO₂ production and distribution in the UK.
- Strong presence of key players offering diverse CO₂ solutions across industries.
- Rising demand for CO₂ in essential sectors like food and beverages, healthcare, and metal fabrication.
Weaknesses
- Heavy reliance on a limited number of CO₂ sources, such as ammonia and ethyl alcohol.
- Environmental challenges associated with traditional CO₂ production methods.
Opportunities
- Advancements in carbon capture and utilization (CCU) technologies.
- Growing interest in bio-based CO₂ production methods as part of the UK’s sustainability goals.
- Increased demand for sustainable, eco-friendly CO₂ solutions in various industries.
Threats
- Stringent environmental regulations on CO₂ emissions.
- Supply chain vulnerabilities, including disruptions due to geopolitical and economic factors.
- Competition from alternative gases or substitutes that may impact CO₂ demand.
Porter’s Five Forces Analysis
- Threat of New Entrants: High capital requirements and regulatory hurdles create significant barriers for new entrants in the United Kingdom carbon dioxide market.
- Bargaining Power of Suppliers: A limited number of CO₂ suppliers gives them moderate bargaining power, although competition is increasing.
- Bargaining Power of Buyers: Buyers benefit from multiple suppliers but tend to rely on consistent product quality and delivery.
- Threat of Substitutes: Emerging alternatives for specific CO₂ applications, such as other gases in industrial processes, could pose a threat in the long term.
- Industry Rivalry: The United Kingdom carbon dioxide market sees intense competition among established players, driving product innovation and cost-efficiency.
Regional Insights
Key regions such as London, Birmingham, and Manchester remain the largest consumers of CO₂ in the United Kingdom. These urban-industrial hubs are home to a significant portion of the food and beverage, manufacturing, and medical sectors. However, rural regions are also experiencing growth as industries move outside metropolitan areas. Companies like Air Liquide UK Ltd and BOC Limited (Linde) are optimizing their supply chains to ensure balanced demand across the country.
Competitive Landscape
The United Kingdom carbon dioxide market is highly competitive, with major players continually innovating to meet demand while addressing sustainability concerns. Key companies include:
- Ensus UK Limited: Focuses on bioethanol production, contributing to biological CO₂ generation.
- BioCarbonics Ltd.: Specializes in bio-based CO₂ solutions for the food and beverage sector.
- Tata Chemicals Europe Limited: Provides industrial-grade CO₂ for various applications, including metal fabrication and chemical production.
- Yara International ASA: Operates CO₂ recovery systems in ammonia plants to meet industrial demand.
- Air Products PLC: Invests heavily in carbon capture technologies for more sustainable CO₂ production.
- BOC Limited (Linde): A major player in the supply of CO₂ for both industrial and medical applications.
- Air Liquide UK Ltd: Focuses on sustainable CO₂ production and distribution methods.
- Nippon Gases: Supplies high-quality medical and industrial-grade CO₂.
- Progases (UK) Ltd: Plays a key role in supplying CO₂ for various industrial needs.
