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 reflects the increasing importance of carbon dioxide in various industries such as food and beverages, medical applications, and metal fabrication. The United Kingdom carbon dioxide market’s trajectory is shaped by advancements in carbon capture technologies, 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 highlight the role of leading companies in driving market growth.
Key Market Segmentation by Source
Ammonia
Ammonia production is a primary source of carbon dioxide in the United Kingdom, as it is a by-product of ammonia manufacturing. This process is essential for industries requiring food-grade carbon dioxide. Companies like Yara International ASA and Tata Chemicals Europe Limited have integrated advanced CO₂ recovery systems to enhance the efficiency of CO₂ capture and ensure a sustainable supply for various applications within the United Kingdom carbon dioxide market.
Ethyl Alcohol
The fermentation of ethyl alcohol produces significant volumes of CO₂, particularly in the food and beverage industry. Bio-based CO₂ from this source is gaining traction as a cleaner alternative to fossil-fuel-derived carbon dioxide. As the demand for biofuels and alcoholic beverages grows, ethyl alcohol production plays a pivotal role in the United Kingdom carbon dioxide market. BioCarbonics Ltd. is a key player in leveraging bio-based production methods to meet this growing demand.
Substitute Natural Gas (SNG)
SNG processes also contribute to CO₂ supply in the United Kingdom, particularly for industrial applications. As the government promotes energy transition efforts, SNG has emerged as a complementary source of carbon dioxide. Companies like BOC Limited (Linde) are developing innovative solutions to capture CO₂ efficiently from SNG processes while reducing emissions, thus benefiting the broader United Kingdom carbon dioxide market.
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 a more sustainable approach to CO₂ production by reducing environmental impact. Companies like Ensus UK Limited play a pivotal role in bioethanol production, which supports biological CO₂ generation in line with sustainability goals.
Combustion Production
Combustion remains a significant method of CO₂ production in industrial and energy sectors. However, combustion faces challenges due to environmental concerns. Companies like Air Liquide UK Ltd and Air Products PLC are investing heavily in carbon capture, utilization, and storage (CCUS) technologies to ensure that CO₂ produced from combustion can meet industrial needs while reducing environmental harm.
Key Market Segmentation by End Use
Food and Beverages
The food and beverages industry is one of the largest consumers of CO₂ in the United Kingdom. Carbon dioxide is widely used in carbonated beverages, food preservation, and packaging. As the UK’s food and drink sector continues to expand, 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 to meet the increasing demand in this sector.
Oil and Gas
In the oil and gas industry, CO₂ is primarily used for enhanced oil recovery (EOR) processes. While the United Kingdom transitions toward renewable energy, EOR applications remain a key use of CO₂ to extend the lifespan of oil fields. Companies such as Air Products PLC continue to support this sector with high-quality CO₂ solutions, though the demand in the oil and gas sector is expected to decrease over time due to the shift toward greener energy sources.
Medical Applications
Medical-grade CO₂ plays a crucial role in surgeries, respiratory therapies, and other healthcare applications. With the growth of the healthcare sector in the UK, demand for medical CO₂ is expected to rise. Companies like Nippon Gases and Progases (UK) Ltd are vital players in ensuring the supply of medical-grade CO₂ that meets stringent quality standards.
Metal Fabrication
In metal fabrication, CO₂ is used in welding and cutting processes. As manufacturing activities grow in the United Kingdom, particularly in sectors like automotive and construction, the demand for CO₂ in metal fabrication is set to increase. Companies like Tata Chemicals Europe Limited and Air Liquide UK Ltd are providing the necessary CO₂ supply to meet the needs of this expanding sector.
Other Applications
Additional applications of CO₂ include its use in chemical production, water treatment, and fire suppression systems. These applications contribute to a consistent demand for CO₂ across various sectors within the United Kingdom carbon dioxide market.
Market Dynamics
SWOT Analysis
Strengths
- Established infrastructure for CO₂ production and recovery in the UK.
- Diverse end-use applications, ensuring consistent demand across industries.
- Strong industrial base supporting stable CO₂ demand.
Weaknesses
- Reliance on a few primary CO₂ sources, such as ammonia and ethyl alcohol.
- Environmental challenges related to traditional CO₂ production methods.
Opportunities
- Advancements in carbon capture and utilization technologies (CCUS).
- Growing interest in bio-based CO₂ production methods for sustainability.
- Increased focus on sustainability and circular economy initiatives, creating new market opportunities.
Threats
- Regulatory restrictions on CO₂ emissions and production processes.
- Supply chain disruptions due to economic or geopolitical factors.
- Competition from alternative gases and substitutes in specific applications.
Porter’s Five Forces Analysis
- Threat of New Entrants: High capital investment and stringent regulatory barriers create substantial barriers to entry in the United Kingdom carbon dioxide market.
- Bargaining Power of Suppliers: Limited sources of CO₂ give suppliers moderate power over pricing and supply chains.
- Bargaining Power of Buyers: Buyers benefit from multiple suppliers, but demand high-quality and reliable delivery of CO₂.
- Threat of Substitutes: Emerging alternatives for CO₂, such as renewable energy or other gases, may pose a long-term threat to the market.
- Industry Rivalry: Intense competition among established players like Air Liquide UK Ltd, BOC Limited (Linde), and Air Products PLC drives innovation and cost competitiveness within the United Kingdom carbon dioxide market.
Regional Insights
The demand for CO₂ is concentrated in urban centers such as London, Birmingham, and Manchester, where industrial activities and infrastructure are dense. However, rural areas are witnessing an increasing demand for CO₂ as industries expand beyond metropolitan regions. Companies like BOC Limited (Linde) and Air Liquide UK Ltd are addressing these regional demands by optimizing their supply chains to ensure efficient CO₂ distribution across the UK.
Competitive Landscape
The United Kingdom carbon dioxide market is highly competitive, with both international and local players competing to provide CO₂ solutions across various industries. Key players include:
- Ensus UK Limited: Focuses on bioethanol production and bio-based CO₂ generation.
- BioCarbonics Ltd.: Specializes in bio-based CO₂ solutions, particularly for the food and beverage industry.
- Tata Chemicals Europe Limited: Provides industrial-grade CO₂ for applications like metal fabrication and other industrial processes.
- Yara International ASA: Operates CO₂ recovery systems for ammonia plants, contributing significantly to the supply of CO₂.
- Air Products PLC: Pioneers in CCUS technologies and CO₂ supply for industrial applications.
- BOC Limited (Linde): Offers diverse CO₂ solutions for both industrial and medical applications in the UK market.
- Air Liquide UK Ltd: Develops sustainable CO₂ production and distribution systems.
- Nippon Gases: Supplies medical-grade CO₂, ensuring safety and quality in healthcare applications.
- Progases (UK) Ltd: Specializes in meeting specific CO₂ requirements for various industrial sectors.
These companies are focusing on product innovation, sustainable practices, and strategic partnerships to strengthen their positions in the United Kingdom carbon dioxide market.
