The United Kingdom Carbon Dioxide Market Size has been experiencing steady growth, driven by the increasing demand for CO2 in various industries such as food and beverage, oil and gas, chemical manufacturing, and healthcare. As the UK continues to push for sustainability and reduce its greenhouse gas emissions, the carbon dioxide market plays an important role in facilitating the transition to cleaner and greener technologies. In 2024, the United Kingdom Carbon Dioxide Market Size achieved a significant volume of 725.80 KMT, and it is expected to grow at a compounded annual growth rate (CAGR) of 1.50% from 2025 to 2034, reaching a projected volume of 842.32 KMT by the end of the forecast period.
Market Overview and Outlook
The United Kingdom carbon dioxide market includes the production, distribution, and application of CO2 in a wide range of industries. The market has evolved with technological advancements in CO2 production methods, storage, and transportation, making it a critical part of various industrial processes.
In recent years, the market has seen an increasing demand for CO2 due to its widespread applications in the food and beverage industry for carbonation, refrigeration, and preservation of food products. Additionally, CO2 plays a vital role in the oil and gas sector for enhanced oil recovery (EOR), where it is injected into wells to increase the extraction of oil.
The market is expected to experience moderate growth, with the volume forecasted to increase from 725.80 KMT in 2024 to 842.32 KMT by 2034. This is primarily driven by technological advancements, growing applications in end-use industries, and an increasing focus on environmental sustainability.
Key Benefits of the UK Carbon Dioxide Market
Environmental Impact Reduction: Carbon dioxide is used for carbon capture and storage (CCS) to reduce the amount of CO2 released into the atmosphere. As industries seek to lower their carbon footprint, CO2 usage for CCS becomes increasingly important in helping to meet national and global climate goals.
Versatility of Applications: The UK carbon dioxide market supports a broad range of industries, including food and beverages, oil and gas, healthcare, chemical manufacturing, and water treatment. This diversity ensures sustained demand for CO2, regardless of economic fluctuations.
Sustainability Initiatives: With growing environmental concerns, CO2 is playing a key role in enhancing sustainability across sectors. For instance, CO2 can be captured, purified, and reused, thereby reducing the need for new emissions and supporting circular economy models.
Economic Growth in End-Use Industries: The demand for CO2 continues to rise as sectors like food and beverage, medical, and pharmaceuticals expand. These sectors are vital to the UK’s economy, creating employment opportunities and boosting GDP growth.
Key Industry Developments
Technological Advancements: Innovations in CO2 production and storage techniques have allowed industries to reduce costs while ensuring efficient CO2 utilization. The development of direct air capture (DAC) technology, for example, holds promise for capturing CO2 from the atmosphere, which can be used for commercial purposes or stored underground.
Carbon Capture and Storage (CCS): As part of the UK’s commitment to achieving net-zero carbon emissions by 2050, there has been a push to enhance CCS technologies. Several projects aimed at capturing CO2 from industrial processes and storing it in geological formations have been implemented, with the potential to significantly reduce emissions across multiple sectors.
Growing Demand for CO2 in Healthcare: CO2 is increasingly being used in medical and pharmaceutical applications, such as respiratory therapies, where it is used for medical gas mixtures. This trend is expected to continue with the rise of healthcare services and pharmaceutical production in the UK.
Expansion of CO2 Production Facilities: In response to growing demand, key players in the market are expanding their CO2 production facilities to meet both domestic and international market requirements.
Driving Factors in the UK Carbon Dioxide Market
Industrial Growth: The expansion of industries such as food and beverage, chemicals, and healthcare drives the demand for CO2. As consumer preferences shift towards processed foods, beverages, and health products, CO2 is integral for preservation, carbonation, and sterilization purposes.
Government Policies on Sustainability: The UK government has implemented stringent regulations to meet its net-zero targets, which drives the demand for CO2 in carbon capture, utilization, and storage applications. Policies such as carbon trading systems and renewable energy incentives further support market growth.
Increased Demand for Enhanced Oil Recovery: The oil and gas industry continues to invest in enhanced oil recovery (EOR) processes, where CO2 is injected into oil fields to increase oil extraction rates. This has been a significant driver for CO2 consumption in the country.
Growing Focus on Clean Energy: The UK’s increasing focus on clean and renewable energy is a key driver for CO2 demand. Innovations in green technologies like bioenergy with carbon capture and storage (BECCS) are gaining traction, which in turn stimulates demand for CO2.
COVID-19 Impact on the Market
The COVID-19 pandemic significantly impacted global markets, including the CO2 market in the UK. During the height of the pandemic, industries such as food and beverage, which are major consumers of CO2, saw disruptions due to supply chain challenges, workforce limitations, and factory shutdowns. However, the healthcare sector saw an increased demand for CO2 in medical applications like respiratory treatments and medical gas mixtures.
As the world recovers from the pandemic, demand for CO2 is expected to rebound, driven by increased industrial production, especially in sectors like food and beverage and pharmaceuticals. Government stimulus packages and policies aimed at economic recovery also support the demand for industrial gases, including CO2.
Restraining Factors in the UK Carbon Dioxide Market
High Production Costs: CO2 production requires substantial investment in infrastructure and technology. High operating costs, especially in the extraction and transportation of CO2, can be a barrier to market growth.
Regulatory Challenges: As the UK implements stricter environmental regulations to meet its climate goals, CO2 producers face challenges in complying with emissions standards. This has prompted the need for costly upgrades to production facilities and the adoption of cleaner technologies.
Alternative Solutions: The emergence of alternative methods, such as hydrogen fuel, could reduce the reliance on CO2 in certain industrial applications. This poses a potential challenge to the market, as industries explore alternative solutions that may offer better cost efficiency or environmental benefits.
Market Segmentation
By Application
Food & Beverage: CO2 is primarily used in carbonation, refrigeration, and food preservation.
Oil & Gas: CO2 is used for enhanced oil recovery (EOR).
Chemical Manufacturing: CO2 serves as a feedstock for various chemical products.
Healthcare & Pharmaceuticals: CO2 is used in medical gases and respiratory therapies.
Water Treatment: CO2 is used in water treatment plants to regulate pH levels.
By End-Use Industry
Industrial Manufacturing
Energy
Healthcare
Food & Beverage
Chemical
Regional Analysis
The UK carbon dioxide market is driven by regional demand, with larger cities and industrial hubs leading in CO2 consumption. Areas with significant food and beverage production facilities and oil extraction activities see higher demand for CO2. The government’s strong environmental policies are also creating growth opportunities in regions involved in renewable energy and carbon capture projects.
Key Players in the UK Carbon Dioxide Market
Ensus UK Limited
BioCarbonics Ltd.
Tata Chemicals Europe Limited
YARA International ASA
Others
Opportunities and Challenges
Opportunities:
Expansion of CO2 utilization in CCS and BECCS projects.
Growth in demand from the healthcare sector.
Rising consumer preference for sustainable products across industries.
Challenges:
High costs of production and infrastructure.
Strict regulatory frameworks surrounding emissions.
Competition from alternative gases and technologies.
