United Kingdom Carbon Dioxide Market: Trends, Growth, and Opportunities (2025-2034)
The United Kingdom carbon dioxide (CO₂) 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 steady growth reflects the increasing importance of carbon dioxide across various industries such as food and beverages, medical applications, and metal fabrication. The United Kingdom carbon dioxide market’s trajectory is being shaped by advancements in carbon capture technologies, regulatory frameworks, and the adoption of sustainable production methods.
In this blog post, we’ll explore the key segments of the United Kingdom carbon dioxide market, assess its production dynamics, and highlight the role of leading companies in driving market growth.
Key Market Segmentation by Source
Ammonia
Ammonia production is a major source of CO₂ in the United Kingdom. As a by-product of ammonia manufacturing, CO₂ plays a significant role in industries requiring food-grade carbon dioxide. Leading companies like Yara International ASA and Tata Chemicals Europe Limited have invested in advanced CO₂ recovery systems that improve the efficiency of CO₂ capture, ensuring a reliable and sustainable supply for various applications in the United Kingdom carbon dioxide market.
Ethyl Alcohol
The fermentation process in ethyl alcohol production generates significant amounts of CO₂. This bio-based source aligns with the growing push for sustainability in the United Kingdom carbon dioxide market, offering a cleaner alternative to fossil-fuel-based CO₂. Companies like BioCarbonics Ltd. are at the forefront of utilizing ethyl alcohol production for CO₂ generation, addressing the increasing demand from the beverage industry and biofuel sector.
Substitute Natural Gas (SNG)
SNG processes contribute to the CO₂ supply chain in the United Kingdom, particularly for industrial applications. As energy transition efforts gain momentum, SNG has emerged as a supplementary source of carbon dioxide, supporting industries such as chemicals and manufacturing. Companies like BOC Limited (Linde) are developing advanced technologies to capture CO₂ from SNG processes while reducing emissions.
Market Segmentation by Production
Biological Production
Biological methods, such as fermentation and anaerobic digestion, are gaining prominence in the United Kingdom carbon dioxide market. These methods offer eco-friendly production processes with a reduced environmental impact. Bio-based CO₂ production is especially relevant for industries focused on sustainability. Ensus UK Limited, with its bioethanol production, plays a vital role in producing CO₂ through biological processes, catering to the food and beverage industry.
Combustion Production
Combustion remains a significant method for producing CO₂, particularly in industrial sectors such as energy and manufacturing. However, combustion processes face challenges related to emissions. Companies such as Air Products PLC and Air Liquide UK Ltd are leading the charge in developing carbon capture, utilization, and storage (CCUS) technologies that mitigate the environmental impact of combustion while ensuring CO₂ continues to meet industrial demand.
Key Market Segmentation by End Use
Food and Beverages
The food and beverage sector is the largest consumer of CO₂ in the United Kingdom carbon dioxide market. CO₂ is used in carbonated beverages, food preservation, and packaging. With a growing demand for food-grade CO₂ driven by the expanding food and beverage sector, companies like BioCarbonics Ltd. and BOC Limited (Linde) are focusing on sustainable production methods to meet this rising demand.
Oil and Gas
In the oil and gas industry, CO₂ plays a key role in enhanced oil recovery (EOR) processes. Although the transition to renewable energy is reducing CO₂ demand in this sector, EOR applications continue to support the need for CO₂. Air Products PLC continues to supply high-quality CO₂ for these applications, contributing to the sector’s efficiency while helping mitigate the environmental impact.
Medical Applications
CO₂ is indispensable in medical fields, including surgeries, anesthesia, and respiratory therapies. As the UK healthcare sector grows, the demand for medical-grade CO₂ is expected to rise. Companies such as Nippon Gases and Progases (UK) Ltd are leaders in providing high-quality CO₂ that meets stringent medical standards.
Metal Fabrication
CO₂ is widely used in metal fabrication processes, such as welding and cutting. As manufacturing activities in sectors like automotive and construction expand, the United Kingdom carbon dioxide market will see an increase in demand from the metal fabrication industry. Tata Chemicals Europe Limited and Air Liquide UK Ltd are key suppliers of CO₂ in this sector.
Other Applications
Additional uses of CO₂ include chemical production, water treatment, and fire suppression systems. These diverse applications ensure a consistent demand for CO₂ in various sectors, keeping the market stable and adaptable to changes in industrial needs.
Market Dynamics
SWOT Analysis
Strengths
- Established infrastructure for CO₂ production and recovery in the United Kingdom.
- A diverse range of end-use applications, from food and beverages to medical.
- A strong industrial base supporting consistent demand for CO₂.
Weaknesses
- Heavy reliance on a few primary sources of CO₂, such as ammonia and ethyl alcohol.
- Environmental challenges related to CO₂ emissions from combustion and industrial processes.
Opportunities
- The advancement of carbon capture and utilization technologies.
- Growing interest in bio-based CO₂ production methods.
- Increased focus on sustainability and circular economy practices in industrial sectors.
Threats
- Regulatory restrictions on emissions and environmental concerns.
- Competition from alternative gases and substitutes.
- Potential supply chain disruptions due to geopolitical or economic factors.
Porter’s Five Forces Analysis
- Threat of New Entrants: High capital investment, along with stringent environmental regulations, creates substantial barriers to entry.
- Bargaining Power of Suppliers: With limited CO₂ sources, suppliers hold moderate bargaining power.
- Bargaining Power of Buyers: Buyers benefit from multiple CO₂ suppliers but demand consistent quality and delivery.
- Threat of Substitutes: Emerging alternatives for CO₂ in specific applications could impact the market long-term.
- Industry Rivalry: Intense competition among established players drives innovation and enhances price competitiveness.
Regional Insights
Urban centers such as London, Birmingham, and Manchester are major hubs for CO₂ demand due to their high concentration of industries and infrastructure. However, rural areas are witnessing growth as industries expand outside metropolitan regions. Companies like BOC Limited (Linde) and Air Liquide UK Ltd are optimizing supply chain management to meet regional CO₂ demand and production requirements efficiently.
Competitive Landscape
The United Kingdom carbon dioxide market is competitive, with several prominent players focused on innovation and sustainability. Key companies include:
- Ensus UK Limited: Specializes in bioethanol production for bio-based CO₂ generation.
- BioCarbonics Ltd.: Provides bio-based CO₂ for the food and beverage industry.
- Tata Chemicals Europe Limited: Supplies industrial-grade CO₂ for metal fabrication and other applications.
- Yara International ASA: Integrates CO₂ recovery systems in ammonia plants for industrial CO₂ supply.
- Air Products PLC: Develops CCUS technologies for sustainable CO₂ production.
- BOC Limited (Linde): Offers diverse CO₂ solutions across industrial and medical sectors.
- Air Liquide UK Ltd: Pioneers in developing sustainable CO₂ production and distribution technologies.
- Nippon Gases: Provides high-quality medical CO₂ solutions.
- Progases (UK) Ltd: Focuses on meeting CO₂ needs in various industries, including medical and industrial sectors.
These companies are focusing on product innovation, regulatory compliance, and developing new solutions to ensure they stay competitive in the rapidly changing market.
