The United Kingdom carbon dioxide market size plays a critical role in various industries, including food and beverages, healthcare, chemicals, and agriculture. In 2024, the market attained a volume of 725.80 KMT and is expected to grow at a compound annual growth rate (CAGR) of 1.50% between 2025 and 2034, reaching 842.32 KMT by 2034.
The increasing demand for carbon dioxide in food processing, medical applications, and industrial uses is driving market expansion. However, the industry also faces challenges related to carbon emissions, sustainability regulations, and supply chain disruptions. This blog explores the market dynamics, key drivers, challenges, emerging trends, and segmentation, offering insights into the future of the UK carbon dioxide market.
Market Overview and Growth Drivers
Several factors contribute to the steady growth of the UK carbon dioxide market:
1. Rising Demand in the Food and Beverage Industry
The food and beverage sector is the largest consumer of carbon dioxide in the UK. The gas is widely used in:
- Carbonated drinks and soft drinks for fizziness
- Modified atmosphere packaging (MAP) to extend shelf life
- Food freezing and chilling to preserve freshness
As the demand for ready-to-eat foods and beverages increases, CO₂ consumption in this sector is expected to grow steadily.
2. Expanding Applications in the Healthcare Industry
In the medical sector, carbon dioxide is used for:
- Minimally invasive surgeries such as laparoscopy
- Respiratory therapies and treatments
- Cryotherapy and dermatological procedures
The rising need for advanced healthcare solutions is driving the demand for medical-grade CO₂ in hospitals and research laboratories.
3. Growing Demand in the Chemical and Industrial Sectors
Carbon dioxide is a key component in chemical manufacturing, welding processes, fire suppression systems, and oil recovery operations. The increasing use of CO₂ in these industries is supporting market growth in the UK.
4. Expansion of Greenhouses and Agricultural Applications
The agriculture sector is adopting carbon dioxide enrichment techniques in greenhouses to accelerate plant growth and improve crop yields. The rising focus on sustainable and controlled-environment farming is expected to boost CO₂ demand in agriculture.
5. Advancements in Carbon Capture and Utilisation (CCU) Technologies
With increasing pressure to reduce greenhouse gas emissions, companies are investing in carbon capture and utilisation (CCU) technologies. Captured CO₂ is being repurposed for industrial applications, sustainable fuels, and enhanced oil recovery, creating new opportunities for the market.
Market Challenges
Despite steady growth, the UK carbon dioxide market faces several challenges:
1. Environmental Concerns and Emission Regulations
The UK government is enforcing strict regulations to reduce carbon emissions as part of its Net Zero 2050 goal. Industries are required to adopt carbon reduction strategies, impacting CO₂ production and usage.
2. Supply Chain Disruptions and Shortages
The UK has faced CO₂ shortages in recent years due to disruptions in fertiliser plants, where carbon dioxide is produced as a by-product. Supply chain volatility affects food processing, beverage manufacturing, and healthcare sectors that rely on consistent CO₂ availability.
3. High Production Costs and Energy Dependence
CO₂ production and purification require energy-intensive processes, making the industry vulnerable to fluctuations in energy prices. The shift towards low-carbon and renewable energy sources could affect traditional CO₂ production methods.
4. Increasing Competition from Alternative Preservation and Cooling Technologies
Technological advancements in food preservation, such as vacuum packaging and natural refrigerants, are providing alternatives to CO₂ usage, potentially impacting market demand in certain sectors.
Key Market Trends (2025-2034)
Several trends are shaping the future of the UK carbon dioxide market:
1. Increased Adoption of Carbon Capture and Storage (CCS) Technologies
Industries are increasingly adopting Carbon Capture and Storage (CCS) to reduce emissions and repurpose captured CO₂. This trend aligns with the UK’s sustainability goals and offers economic benefits through carbon utilisation.
2. Growth of Sustainable and Bio-Based Carbon Dioxide Production
Companies are developing sustainable CO₂ production methods, including:
- Bio-based CO₂ derived from fermentation and biomass processing
- Electrochemical CO₂ conversion for cleaner industrial use
These innovations support green manufacturing and circular economy practices.
3. Expansion of CO₂ Applications in Emerging Industries
New applications for CO₂ are emerging in:
- Enhanced oil recovery (EOR) for improving oil extraction efficiency
- Production of synthetic fuels and chemicals
- Carbonation in craft brewing and alcoholic beverages
These growing applications are expanding market opportunities across multiple industries.
4. Automation and Smart Monitoring in CO₂ Distribution
The adoption of smart distribution and monitoring systems is improving CO₂ logistics. Technologies such as IoT sensors and automated control systems are helping industries track and optimise CO₂ usage in real time.
5. Strategic Partnerships and Government Initiatives
The UK government is supporting carbon reduction projects and industrial collaborations to promote sustainable CO₂ production and usage. Partnerships between energy, chemical, and food industries are driving innovations in carbon management and utilisation.
Market Segmentation
1. By Source
- Natural CO₂ Sources: Includes geothermal and underground reservoirs.
- Industrial By-Product CO₂: Generated from ammonia, ethanol, and hydrogen production.
- Captured CO₂: Obtained from carbon capture technologies for sustainable use.
Industrial by-product CO₂ dominates the market, but captured CO₂ is gaining importance due to sustainability concerns.
2. By Application
- Food and Beverage: Carbonation, chilling, and modified atmosphere packaging.
- Medical and Healthcare: Surgical applications, respiratory treatments, and cryotherapy.
- Industrial and Manufacturing: Welding, chemical production, and fire suppression.
- Agriculture: Greenhouse CO₂ enrichment and fertiliser production.
The food and beverage sector remains the largest application area, followed by medical and industrial applications.
3. By Distribution Mode
- Cylinder and Bottled CO₂: Used in small-scale applications.
- Bulk CO₂ Supply: Delivered via tanker trucks for industrial use.
- Pipeline Distribution: Used in large-scale industrial and CCS projects.
Bulk CO₂ supply is the most common mode, while pipeline distribution is expanding with CCS projects.
4. By End-User Industry
- Food and Beverage Industry
- Healthcare and Pharmaceuticals
- Chemical and Industrial Manufacturing
- Agriculture and Greenhouse Operations
- Oil and Gas (Enhanced Oil Recovery - EOR)
The food and beverage industry remains the dominant end-user, but chemical and industrial manufacturing sectors are witnessing growing demand.
Competitive Landscape and Key Players
Several major companies operate in the UK carbon dioxide market, including:
- Air Liquide – A leader in industrial gases and CO₂ supply.
- Linde plc – Offers bulk CO₂ distribution and CCS solutions.
- Praxair, Inc. (now part of Linde) – Specialises in CO₂ supply for food and medical applications.
- BOC Group – Provides cylinder and bulk CO₂ solutions for various industries.
- Air Products and Chemicals, Inc. – Focuses on sustainable CO₂ and industrial gas solutions.
These companies are investing in carbon capture technologies, sustainable CO₂ production, and strategic partnerships to stay competitive.
