The United Kingdom carbon dioxide 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 growth highlights the increasing demand for carbon dioxide (CO₂) across industries such as food and beverages, medical applications, and metal fabrication. Additionally, advancements in carbon capture technologies and the adoption of more sustainable production methods are shaping the future of the United Kingdom carbon dioxide market. In this blog post, we will explore the market dynamics, key segments, and competitive landscape driving the growth of CO₂ in the UK.
Key Market Segmentation by Source
Ammonia
Ammonia production remains a primary source of CO₂ in the United Kingdom carbon dioxide market. As a by-product of ammonia manufacturing, CO₂ is recovered and used extensively in various industries. Companies like Yara International ASA and Tata Chemicals Europe Limited are investing in advanced CO₂ recovery systems, which help ensure a steady and sustainable supply of CO₂ for diverse applications, especially in the food and beverage sector.
Ethyl Alcohol
The fermentation of ethyl alcohol also generates substantial volumes of CO₂, primarily utilized in the production of carbonated beverages and biofuels. BioCarbonics Ltd. plays a pivotal role in leveraging bio-based production methods to meet the growing demand for cleaner, more sustainable CO₂ sources. The bio-based nature of CO₂ from ethyl alcohol production aligns with the UK’s environmental and sustainability goals.
Substitute Natural Gas (SNG)
Substitute natural gas (SNG) also contributes to the UK’s carbon dioxide supply, particularly in industrial applications. Companies such as BOC Limited (Linde) are developing innovative ways to capture CO₂ from SNG processes, providing an additional source of CO₂ for industries while reducing environmental impact.
Market Segmentation by Production
Biological Production
Biological methods of CO₂ production, such as fermentation and anaerobic digestion, are gaining momentum in the United Kingdom carbon dioxide market. These methods not only contribute to sustainability but also help reduce the overall carbon footprint of CO₂ production. Ensus UK Limited, a prominent player in bioethanol production, is a key contributor to biological CO₂ generation.
Combustion Production
Combustion remains a significant method for CO₂ production in industrial and energy sectors. However, this method faces challenges due to CO₂ emissions concerns. Companies like Air Liquide UK Ltd and Air Products PLC are investing in carbon capture, utilization, and storage (CCUS) technologies to mitigate these emissions and enhance the efficiency of CO₂ recovery from combustion processes.
Key Market Segmentation by End Use
Food and Beverages
The food and beverages industry is a major consumer of carbon dioxide in the United Kingdom. CO₂ is used extensively for carbonation in soft drinks, as well as in food preservation and packaging. As the UK’s food and beverage sector continues to grow, the demand for food-grade CO₂ is expected to rise. BioCarbonics Ltd. and BOC Limited (Linde) are focusing on providing sustainable CO₂ solutions to meet this growing demand.
Oil and Gas
In the oil and gas sector, CO₂ is used for enhanced oil recovery (EOR) processes. While the UK is transitioning toward renewable energy, the oil and gas industry continues to rely on CO₂ for EOR applications. Companies like Air Products PLC provide high-quality CO₂ to support these operations, although demand is likely to decline in the long term as alternative energy sources become more prevalent.
Medical Applications
CO₂ plays a critical role in medical applications, including surgeries, anesthesia, and respiratory therapies. The rising healthcare demands and technological advancements in medical equipment are expected to drive the demand for medical-grade CO₂. Companies such as Nippon Gases and Progases (UK) Ltd are major suppliers of medical CO₂, ensuring strict compliance with health and safety standards.
Metal Fabrication
In the metal fabrication industry, CO₂ is essential for welding and cutting processes. As the UK’s manufacturing and construction sectors grow, the demand for CO₂ in metal fabrication is set to increase. Tata Chemicals Europe Limited and Air Liquide UK Ltd are key suppliers of CO₂ for industrial manufacturing applications.
Other Applications
In addition to these primary industries, CO₂ is used in various other applications, including chemical production, water treatment, and fire suppression. These additional applications ensure that the demand for CO₂ remains consistent across multiple industrial sectors.
Market Dynamics
SWOT Analysis
Strengths
- The United Kingdom carbon dioxide market benefits from a robust infrastructure for CO₂ production and recovery.
- The market is diverse, with CO₂ used in a wide range of applications, ensuring consistent demand.
- The presence of leading global and local players offering innovative CO₂ solutions strengthens market stability.
Weaknesses
- The UK’s dependency on a limited number of CO₂ sources, such as ammonia and ethyl alcohol, can create potential supply risks.
- Environmental concerns related to traditional CO₂ production methods may limit growth if not addressed effectively.
Opportunities
- Advances in carbon capture and utilization technologies provide significant opportunities for market growth.
- The growing interest in bio-based CO₂ production methods, aligning with sustainability initiatives, is a promising development.
- The increasing focus on circular economy models opens up new avenues for CO₂ recovery and reuse.
Threats
- Regulatory restrictions related to emissions and CO₂ production processes pose a risk to the industry.
- Supply chain disruptions due to geopolitical and economic factors could affect CO₂ availability.
- The rise of alternative gases and substitutes may impact CO₂ demand in certain applications.
Porter’s Five Forces Analysis
- Threat of New Entrants: Barriers to entry are high due to the significant capital investment required for CO₂ production and the strict regulatory environment.
- Bargaining Power of Suppliers: Suppliers of raw materials for CO₂ production have a moderate bargaining power, as CO₂ is derived from a limited number of industrial processes.
- Bargaining Power of Buyers: Buyers benefit from multiple suppliers, but they demand high-quality CO₂ and reliable supply chains.
- Threat of Substitutes: While there are some emerging alternatives, CO₂ remains a critical resource for many industrial processes.
- Industry Rivalry: The market is competitive, with established players vying for market share, driving innovation and cost-efficiency.
Regional Insights
Key urban centers such as London, Birmingham, and Manchester are the primary demand drivers for CO₂ in the United Kingdom. These areas are home to dense industrial activities, which require significant amounts of CO₂. However, rural areas are also seeing growth as industries expand beyond metropolitan regions. The development of efficient supply chain strategies by companies like Air Liquide UK Ltd and BOC Limited (Linde) ensures that CO₂ is distributed effectively across the country.
Competitive Landscape
The United Kingdom carbon dioxide market features a mix of global and local players, with each company adopting innovative approaches to meet the demand for CO₂. Key players in the market include:
- Ensus UK Limited: Specializes in bioethanol production, contributing to biological CO₂ generation.
- BioCarbonics Ltd.: Focuses on providing bio-based CO₂ solutions for the food and beverage industry.
- Tata Chemicals Europe Limited: A major supplier of industrial-grade CO₂ for metal fabrication and other applications.
- Yara International ASA: Operates CO₂ recovery systems in ammonia production plants.
- Air Products PLC: Provides CO₂ for oil and gas, medical, and industrial applications, with a focus on carbon capture technology.
- BOC Limited (Linde): Offers diverse CO₂ solutions for various industrial sectors, including medical and food-grade applications.
- Air Liquide UK Ltd: Known for investing in sustainable CO₂ production and distribution technologies.
- Nippon Gases: Supplies high-quality CO₂ for industrial and medical use.
- Progases (UK) Ltd: Focuses on CO₂ solutions for specific industrial and commercial requirements.
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