The United Kingdom carbon dioxide market growth is growing steadily, driven by increasing demand across industries such as food and beverage, healthcare, manufacturing, and agriculture. CO₂ plays a crucial role in carbonation, refrigeration, welding, and medical applications. With sustainability initiatives gaining momentum, carbon capture and utilization (CCU) technologies are becoming more prevalent, opening new avenues for market expansion.
In 2024, the UK carbon dioxide market attained a volume of 725.80 KMT and is expected to grow at a CAGR of 1.50% from 2025 to 2034, reaching approximately 842.32 KMT by 2034. Factors such as expanding food processing industries, technological advancements in CO₂ recovery, and increasing applications in agriculture are shaping the future of the market.
What’s Driving the Growth of the CO₂ Market?
The expanding food and beverage industry is one of the major drivers of CO₂ demand. Carbon dioxide is essential for carbonation in soft drinks, beer, and sparkling water, as well as in modified atmosphere packaging (MAP) that extends the shelf life of perishable foods. With the increasing consumer preference for ready-to-drink beverages and plant-based food products, the need for food-grade CO₂ continues to rise.
In healthcare, CO₂ has multiple applications, ranging from respiratory therapies and minimally invasive surgeries to cryotherapy and dermatological treatments. As the healthcare sector continues to innovate, demand for high-purity medical-grade CO₂ is expected to grow significantly.
Industries such as automotive, aerospace, and metal fabrication rely on CO₂ for welding and cooling applications. With the rise in electric vehicle (EV) production and high-precision engineering, the demand for industrial CO₂ is set to increase.
Carbon capture and utilization (CCU) technologies are gaining momentum as industries look for ways to reduce carbon emissions and repurpose CO₂. Companies are developing CO₂-based synthetic fuels, bio-plastics, and sustainable building materials, creating new opportunities for the market.
Agriculture is another sector benefiting from CO₂. Greenhouse farming is growing in the UK due to climate change and the need for sustainable food production. CO₂ enrichment in controlled-environment agriculture (CEA) systems improves crop yield and plant growth, making it a valuable resource for modern farming.
The rise of e-commerce and pharmaceutical cold chain logistics has also contributed to increased demand for dry ice, the solid form of CO₂. Used for temperature-sensitive shipments, dry ice plays a crucial role in vaccine transportation, perishable goods storage, and event fog effects.
Challenges Facing the CO₂ Market
One of the biggest challenges in the UK carbon dioxide market is supply chain fluctuations. The majority of industrial CO₂ comes as a byproduct from ammonia and ethanol production, meaning that disruptions in these industries can lead to CO₂ shortages and price volatility. Unexpected shutdowns of fertilizer plants or bioethanol facilities have caused significant supply issues in the past, affecting key sectors like food and beverage production.
Regulatory restrictions on industrial emissions and carbon footprints present another challenge. The UK government has implemented strict policies to limit CO₂ emissions, affecting industries that produce and utilize carbon dioxide. While this encourages carbon capture and utilization (CCU) projects, compliance costs can be a burden for smaller companies.
The rising cost of raw materials also impacts CO₂ production. Feedstocks such as natural gas and bio-based materials influence the cost and availability of industrial CO₂. Geopolitical instability and fluctuating energy prices further contribute to uncertainties in the market.
Although carbon capture and storage (CCS) technologies offer promising solutions, the lack of large-scale infrastructure and investment in CO₂ storage remains a hurdle. Expanding CCS networks will require significant funding and government incentives to make widespread adoption feasible.
Another challenge comes from alternative refrigerants and industrial gases. Industries that traditionally used CO₂ for cooling, fire suppression, and manufacturing are exploring low-carbon alternatives such as ammonia, nitrogen, and hydrofluoroolefins (HFOs). As new technologies emerge, the CO₂ market will need to adapt and diversify its applications.
Emerging Trends in the CO₂ Market
Sustainability and carbon neutrality initiatives are transforming the carbon dioxide market. Companies are investing in carbon capture, emissions trading, and green energy projects to align with global climate targets. More businesses are integrating CO₂ recycling methods into their production processes, reducing waste and maximizing efficiency.
Synthetic fuels derived from captured CO₂ and hydrogen are gaining traction as alternatives to fossil fuels. Airlines and transportation companies are exploring CO₂-based aviation fuels to reduce their environmental impact. Similarly, CO₂-to-methanol and biofuel production are emerging as viable alternatives for sustainable energy solutions.
Innovations in CO₂-based concrete and building materials are reshaping the construction industry. Carbon-cured concrete not only reduces CO₂ emissions but also enhances material strength and durability. As governments push for low-carbon infrastructure, demand for CO₂-infused building materials is expected to rise.
The food industry is shifting toward natural refrigerants, and CO₂ is emerging as a preferred option. CO₂-based refrigeration systems are gaining popularity due to their energy efficiency, low global warming potential (GWP), and compliance with environmental regulations. Supermarkets, food processing plants, and cold storage facilities are increasingly adopting CO₂ cooling solutions.
The use of AI and IoT in CO₂ monitoring and management is also expanding. Smart sensors, predictive analytics, and automated CO₂ tracking systems are helping industries optimize energy use, reduce emissions, and enhance operational efficiency. These technologies are particularly useful in manufacturing, agriculture, and logistics, where CO₂ levels must be carefully controlled.
Market Segmentation: Where is CO₂ Being Used?
The UK carbon dioxide market is categorized based on source, application, and industry demand.
By Source: The majority of CO₂ is derived from industrial byproducts, natural reservoirs, and carbon capture technologies. As sustainability efforts increase, the share of captured and recycled CO₂ is expected to grow.
By Application: CO₂ is widely used in food and beverage production, healthcare, manufacturing, agriculture, oil recovery, refrigeration, and dry ice logistics. Each segment is seeing unique innovations, from CO₂-infused packaging to cryogenic medical treatments.
By Industry Demand: Sectors such as food processing, pharmaceuticals, construction, energy, and transportation are driving CO₂ consumption. The rise of carbon-neutral initiatives is influencing how industries use CO₂ in sustainable manufacturing and green energy production.
What Lies Ahead for the UK CO₂ Market?
The future of the UK carbon dioxide market is closely tied to climate policies, technological advancements, and industrial innovation. Carbon capture and utilization (CCU) projects are expected to expand, with investments in CO₂-to-fuel technologies, sustainable agriculture, and eco-friendly industrial applications.
As the demand for low-carbon products and green energy grows, industries will continue exploring new ways to capture, store, and repurpose CO₂. Businesses that embrace sustainable practices and invest in CO₂ recovery will benefit from emerging market opportunities and regulatory incentives.
