United Kingdom Carbon Dioxide Market Outlook
According to a report by Expert Market Research (EMR), the United Kingdom carbon dioxide market size achieved a value of 725.80 KMT in 2024. As industries continue to seek effective solutions to decarbonize their operations while meeting growing demand, the market is expected to grow at a compound annual growth rate (CAGR) of 1.50% from 2025 to 2034, ultimately reaching a value of 842.32 KMT by 2034.
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Carbon dioxide (CO2) is a versatile and essential gas used in various industries, including food and beverages, healthcare, and manufacturing. CO2 is crucial in processes such as carbonating drinks, enhancing oil recovery, and facilitating chemical manufacturing. Furthermore, with the increasing demand for CO2 in the context of environmental concerns and sustainability, the role of carbon dioxide is expanding into carbon capture and storage (CCS) technologies, supporting the United Kingdom’s ambitious net-zero emissions target by 2050.
The rise in environmental awareness, coupled with significant investments in green technologies, is fueling growth in the UK’s CO2 market. The government’s push for decarbonization, the demand for CO2 in green processes, and its pivotal role in reducing emissions all contribute to this expanding market.
Factors Driving Market Growth
The primary driver behind the United Kingdom’s growing carbon dioxide market is the increasing demand for CO2 in key industrial applications. Within the food and beverage industry, CO2 is used extensively for carbonation, freezing, and as a preservative in packaging. As consumers continue to prefer carbonated drinks, the demand for CO2 in beverage production remains strong.
The healthcare sector also plays a significant role in the demand for carbon dioxide, particularly for its use in medical procedures such as laparoscopic surgeries and as a respiratory stimulant in certain treatments. Furthermore, CO2 is used in the production of fire extinguishers, refrigerants, and in enhanced oil recovery (EOR) processes. The diverse applications of CO2 across these industries underscore its importance to the UK economy.
Additionally, environmental regulations and climate change concerns are contributing to an increasing demand for CO2 capture and storage (CCS) technologies. As part of its climate change mitigation strategy, the UK government has committed to reducing carbon emissions and achieving net-zero emissions by 2050. CO2 capture technologies, which help capture and store CO2 emissions from industrial processes, are becoming more prominent as part of this strategy, fueling the demand for CO2.
Technological Advancements and Innovations
Technological advancements in the carbon dioxide market are a key enabler of growth. Among the most notable innovations is the development of carbon capture, utilization, and storage (CCUS) technologies. Carbon capture technologies allow businesses to capture CO2 emissions produced during industrial processes and either store them underground or repurpose them for other applications, reducing the overall environmental impact.
In the United Kingdom, there is a growing emphasis on the development and adoption of CCS technologies, supported by government policies and investment in research and development. The government’s commitment to a green economy, outlined in initiatives such as the UK’s “Green Industrial Revolution,” is aimed at advancing CCUS infrastructure. The establishment of carbon capture clusters, particularly in areas such as the Humber and Teesside, is fostering innovation and providing a platform for large-scale CO2 storage and utilization projects.
Moreover, significant advancements are being made in the use of CO2 as a feedstock in chemical manufacturing. CO2 can be used to produce a range of valuable chemicals, including urea, methanol, and synthetic fuels. The growing interest in utilizing CO2 as a feedstock not only reduces reliance on fossil fuels but also contributes to a circular economy by transforming emissions into useful products.
The Role of CO2 in Sustainable Practices
As part of the UK’s ambitious commitment to achieving net-zero emissions by 2050, CO2 plays a critical role in several sustainability initiatives. Carbon dioxide is being integrated into carbon utilization strategies, where it is converted into valuable products such as synthetic fuels and chemicals. This circular approach reduces overall emissions while contributing to the growth of new industries and job creation.
The UK is actively exploring and implementing processes that involve CO2 as a resource rather than a waste product. For example, some companies are using CO2 to produce renewable fuels through processes such as the Fischer-Tropsch synthesis, which converts CO2 into synthetic hydrocarbons. These hydrocarbons can then be used in aviation or other sectors where decarbonization is particularly challenging. This innovative approach is expected to be a significant driver of the UK carbon dioxide market in the coming years.
Furthermore, CO2 is increasingly being employed in carbonated drinks, an area of growing consumer demand. The increasing popularity of fizzy drinks, sparkling water, and alcohol-based beverages, such as beer and soda, is fueling CO2 demand in the food and beverage industry. The expansion of plant-based and non-alcoholic beverage sectors also contributes to the growing reliance on CO2, providing a stable demand for the gas.
Government Initiatives and Regulatory Support
Government policies in the United Kingdom are playing a critical role in shaping the growth of the carbon dioxide market. The UK government’s climate change legislation, particularly the legally binding net-zero emissions target by 2050, is a significant driver of the CO2 market’s expansion. Several policies and initiatives are designed to incentivize industries to adopt carbon capture technologies and reduce their carbon footprints.
The UK’s Carbon Price Floor (CPF), for example, establishes a minimum price for carbon emissions, thereby making it more economically viable for companies to invest in carbon capture and storage solutions. Additionally, the government’s support for the development of large-scale CO2 storage sites, particularly in regions like the North Sea, is helping to lay the foundation for long-term CO2 sequestration projects.
Furthermore, the UK’s emphasis on green finance, including the issuance of green bonds and funding for green infrastructure projects, supports the adoption of clean technologies, including carbon capture and utilization systems. The UK’s commitment to integrating sustainability into its economic growth strategy is a positive indicator for the long-term viability of the CO2 market.
United Kingdom Carbon Dioxide Market Segmentation
The United Kingdom carbon dioxide market can be divided based on source, production, end use
Breakup by Source
- Ammonia
- Ethyl Alcohol
- Substitute Natural Gas and CCU
Breakup by Production
- Biological
- Combustion
Breakup by End Use
- Food and Beverages
- Oil and Gas
- Medical
- Metal Fabrication
- Others
Competitive Landscape
Some of the major key players explored in the report by Expert Market Research are as follows:
- Ensus UK Limited
- BioCarbonics Ltd.
- Tata Chemicals Europe Limited
- Yara International ASA
- Air Products PLC
- BOC Limited (Linde)
- Air Liquide UK Ltd
- Nippon Gases
- Progases (UK) Ltd
- Others
Challenges Facing the Market
Despite the promising growth prospects, the UK carbon dioxide market faces certain challenges. One of the primary hurdles is the cost associated with carbon capture, utilization, and storage technologies. While advancements have been made in making CCS more cost-effective, the initial investment required to establish large-scale capture facilities and storage sites remains substantial.
Additionally, the volatility in the global CO2 supply chain, especially during times of industrial shutdowns or disruptions in the food and beverage sectors, can cause temporary shortages of CO2. Such disruptions could impact industries reliant on CO2 for their operations, making it essential for companies to explore alternative sources or backup solutions to mitigate supply chain risks.
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