The United Kingdom carbon dioxide (CO₂) market share 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 in various industries such as food and beverages, medical applications, and metal fabrication, alongside the rising adoption of sustainable and innovative production techniques. The market's trajectory is being influenced by advancements in carbon capture technologies, regulatory frameworks, and industrial developments across the UK.

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Key Market Segmentation by Source

Ammonia

Ammonia production is a primary source of CO₂ in the UK, as CO₂ is a by-product of ammonia manufacturing. This process is crucial for industries reliant on food-grade carbon dioxide. The integration of advanced CO₂ recovery systems in ammonia plants has improved the efficiency of CO₂ capture, ensuring a steady and sustainable supply for various applications.

Ethyl Alcohol

The fermentation of ethyl alcohol, particularly in the beverage and biofuel industries, produces significant volumes of CO₂. This bio-based source of carbon dioxide aligns with the growing push toward sustainability, offering a cleaner alternative to fossil-fuel-based CO₂ sources. As the demand for biofuels and alcoholic beverages continues to grow, ethyl alcohol production is expected to play a pivotal role in the market.

Substitute Natural Gas

SNG processes also contribute to the UK's CO₂ supply chain. With the government promoting energy transition efforts and alternative fuel sources, SNG has emerged as a complementary source of carbon dioxide, particularly for industrial applications.

Market Segmentation by Production

Biological Production

Biological methods, such as fermentation and anaerobic digestion, are gaining prominence in the UK. These methods are not only more sustainable but also reduce environmental impact compared to traditional processes. Bio-based CO₂ production is particularly relevant in industries focused on reducing their carbon footprint.

Combustion Production

Combustion remains a significant method of CO₂ production in industrial and energy sectors. However, this process faces challenges due to emissions concerns. Technological advancements in carbon capture, utilization, and storage (CCUS) systems have provided a way to mitigate these challenges, ensuring that CO₂ from combustion can still meet industrial demands 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 UK. Carbon dioxide is extensively used in carbonated beverages, food packaging, and preservation processes. With the UK’s vibrant food and drink sector expanding, particularly in urban areas, demand for food-grade CO₂ is expected to rise steadily. Companies are prioritizing sustainable production methods to meet consumer preferences for environmentally friendly products.

Oil and Gas

In the oil and gas industry, CO₂ is primarily used for enhanced oil recovery processes. While the UK is gradually transitioning to renewable energy, enhanced oil recovery applications remain relevant in prolonging the lifespan of existing oil fields. The demand for CO₂ in this sector is expected to decline slightly over the forecast period due to the shift toward greener energy sources.

Medical Applications

CO₂ is indispensable in the medical field, used for surgeries, anesthesia, and respiratory therapies. The growing healthcare sector in the UK, coupled with advancements in medical technologies, is expected to boost demand for medical-grade CO₂ over the coming years.

Metal Fabrication

The use of CO₂ in metal fabrication processes, including welding and cutting, remains significant. As manufacturing activities increase in the UK, particularly in sectors like automotive and construction, demand for CO₂ in metal fabrication is set to grow.

Other Applications

Additional applications of CO₂ include its use in chemical production, water treatment, and fire suppression systems. These diverse applications ensure a consistent level of demand across various industrial sectors.

Market Dynamics

SWOT Analysis

Strengths

Established infrastructure for CO₂ production and recovery
Diverse end-use applications across industries
Strong industrial base supporting consistent demand

Weaknesses

Environmental challenges related to emissions
Dependency on a few primary sources of CO₂, such as ammonia and ethyl alcohol

Opportunities

Advancements in carbon capture and utilization technologies
Growing interest in bio-based CO₂ production methods
Increased focus on sustainability and circular economy initiatives

Threats

Regulatory restrictions on emissions and production processes
Competition from alternative gases and substitutes
Supply chain disruptions due to geopolitical or economic challenges

Porter’s Five Forces Analysis

Threat of New Entrants: High capital investment and stringent regulatory requirements act as barriers to entry
Bargaining Power of Suppliers: Limited sources of CO₂ give suppliers a moderate level of power
Bargaining Power of Buyers: Buyers benefit from multiple suppliers but rely on consistent quality and delivery
Threat of Substitutes: Emerging alternatives for specific applications may pose a long-term threat
Industry Rivalry: Intense competition among existing players drives innovation and price competitiveness

Regional Insights

Urban centers such as London, Birmingham, and Manchester are key demand drivers for CO₂ due to their high concentration of industries and infrastructure. However, rural areas are witnessing growth as industries expand beyond metropolitan regions. Regional disparities in CO₂ production and demand highlight the need for efficient supply chain management to ensure balanced market dynamics across the UK.

Competitive Landscape

The UK carbon dioxide market is dominated by key players such as BOC Group, Air Liquide, and Linde plc, who are continuously investing in carbon capture technologies and sustainability initiatives. These companies focus on innovation to meet the evolving needs of end-use industries while adhering to environmental regulations. Collaboration and partnerships between companies are becoming common to address challenges such as supply shortages and environmental impact.