Carbon Dioxide Market Trends and Forecast
The future of the global carbon dioxide market looks promising with opportunities in the food & beverage, oil & gas, medical, rubber, and firefighting markets. The global carbon dioxide market is expected to grow with a CAGR of 5.1% from 2025 to 2031. The major drivers for this market are the increasing demand for food preservation, the growing use in industrial applications, and the rising adoption in enhanced oil recovery.
• Lucintel forecasts that, within the source category, hydrogen is expected to witness the highest growth over the forecast period.
• Within the application category, food & beverage is expected to witness the highest growth.
• In terms of region, APAC is expected to witness the highest growth over the forecast period.
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Emerging Trends in the Carbon Dioxide Market
The carbon dioxide market stands at a turning point, moving from its historical industrial applications towards becoming an integral part of decarbonization efforts globally. These developing trends are characterized by a twin thrust: on the one hand, managing CO2 as a resource, and on the other, reducing its environmental footprint. As the world works towards net-zero emissions, technological advances in capture, utilization, and pricing regimes are profoundly changing the dynamics of the market and creating new opportunities for growth and sustainability.
• Carbon Capture, Utilization, and Storage Growth: This trend entails quick development and deployment of technologies to capture CO2 from big industrial sources of emissions or straight from the air, then its utilization in different products or secure long-term geological storage. The effect is a dramatic decrease in CO2 in the atmosphere, essential for attaining climate goals. This establishes new value chains for captured CO2, converting it from waste to a tradable commodity or a valuable feedstock for industries such as enhanced oil recovery, cement, and synthetic fuels, triggering huge investment in infrastructure and technology.
• Expansion of Carbon Pricing Mechanisms and Markets: This refers to the growing use of carbon taxes and emissions trading systems (ETS) around the world, putting a monetary price on CO2 emissions. This provides a compelling economic incentive to industries to decrease their carbon intensity and search for clean CO2 sources or utilization routes. The effect is a fiscal driver towards decarbonization, encouraging investment in CCUS and low-carbon technology. It also provides a vibrant market for carbon credits, in which emission cuts can be traded, impacting company strategy and investment choices.
• New CO2 Utilization Routes: In addition to conventional applications such as food and drink carbonation, the trend entails research and development of new uses for captured CO2. These encompass the production of sustainable fuels (e.g., synthetic methane, methanol, jet fuel), chemicals (e.g., polymers, urea), construction materials (e.g., concrete curing), and even consumer goods. The effect is a diversification of demand for CO2, generating new value chains and diminishing the demand for virgin fossil resources. This transforms CO2 from a waste burden to an asset, encouraging its capture and opening up new sources of revenue for industries.
• Decentralized and On-Site CO2 Production and Recovery: This trend is about the creation of smaller, more versatile technologies for capturing and producing CO2 on-site or from dispersed sources, instead of depending on large, centralized industrial facilities. These encompass modular capture equipment and systems that recover CO2 from biogas or fermentation. The effect is increased supply chain resilience, lower transport costs, and more control over CO2 purity and availability for downstream applications. This trend is especially advantageous for smaller companies and those in remote areas, leveling the playing field of CO2 supply access.
• Green and Sustainable CO2 Sourcing Emphasis: This movement encourages the use of CO2 from biogenic processes (e.g., fermentation, biomass energy with carbon capture) or direct air capture (DAC), commonly known as "green CO2" or "atmospheric CO2," rather than CO2 from burning fossil fuels. The effect is a considerable decrease in the net carbon footprint of products that use CO2, especially for the food and beverage sector where purity and sustainability are critical. This develops a high-end market for CO2 captured sustainably, led by demand from consumers and corporate sustainability strategies, and rewards the innovation of next-generation capture technology.
These new trends are radically restructuring the Carbon Dioxide Market by fundamentally transforming its supply, demand, and economic value. The growth of CCUS and carbon pricing policies is turning CO2 into a commodity that can be traded and a high-value resource. The emergence of new utilization routes and decentralized manufacturing processes is diversifying demand and enhancing supply chain resilience. Additionally, the concern for sustainable CO2 sourcing is compelling the market towards cleaner practices, collectively locating CO2 at the core of the global low-carbon economy transition.
Recent Development in the Carbon Dioxide Market
The carbon dioxide market has witnessed a chain of influential developments in recent times, changing the very face of the industry and underlining its increasing significance in industrial uses as well as international climate policies. These developments are not only enhancing the effectiveness of CO2 handling but also vastly increasing its potential as a resource and a focus for curbing emissions. From state-of-the-art capture technologies to the creation of high-end trading schemes, all these developments are important in opening the way to broader applications across various sectors.
• Rapid CCUS Project Development: One of the major developments in recent times is the accelerated development of CCUS projects around the world. These range from big projects to capture CO2 from industrial processes and power plants, and then inject it for oil recovery (EOR), usage in concrete, or permanent storage in geology. The effect is a real movement towards the decarbonization of hard-to-abate industries. This has a demand for infrastructure to compress, transport, and store CO2, which creates new segments in the CO2 market and offers a route for industrial emissions to be managed.
• Introduction and Rollout of Carbon Pricing Mechanisms and Trading Programs: Recent action includes the introduction of new national carbon credit trading programs, such as India’s CCTS, and the rollout or redesigning of existing ones, such as China’s national carbon market. These programs assign a price tag to carbon emissions, encouraging industries to lower their CO2 footprint. The effect is a market-based strategy to reducing emissions, encouraging investment in cleaner technology and transforming carbon credits into a tradable commodity. It profoundly changes the economic dynamics for CO2 emitters and consumers.
• Innovation in Direct Air Capture Technologies: A significant feature is growing investment and advancement in Direct Air Capture (DAC) technologies, which capture CO2 directly from the air. Although still in its infancy, DAC is gaining momentum as a vital means of reaching net-zero emissions, particularly for legacy emissions or hard-to-abate sectors. The effect is the ability to generate a new, almost unlimited source of CO2 for use, unlinked from industrial emissions. This presents opportunities for "carbon-negative" products and processes, albeit at a currently high cost.
• Novel CO2-Derived Products and Chemicals Development: There has been a profound advancement in product research and commercialization of new products from captured CO2. This entails the conversion of CO2 into circular economy opportunities such as sustainable aviation fuels, methanol, fertilizers’ urea, polymers, and even construction materials such as concrete. The effect is the conversion of CO2 from a waste product to a valuable feedstock, opening up circular economy opportunities. This creates new income sources for small suppliers of CO2 and decreases dependence on fossil-based feedstocks, pushing forward a transformation in industrial chemistry.
• Greater Emphasis on Food and Beverage Industry Supply Chain Resilience: Faculty advancements in the carbon dioxide sector have exposed the food and beverage sector to being vulnerable to CO2 supply interruption, and hence there is a greater emphasis on supply chain resilience. This involves firms investing in CO2 recovery on-site from fermentation operations (e.g., breweries) or seeking long-term supply contracts. The result is a more secure and stable food-grade CO2 supply, essential for carbonation and for modified atmosphere packaging, to decrease dependence on unstable industrial by-product sources. This stimulates investment in near-source CO2 generation and purification technologies.
These innovations are having a profound influence on the Carbon Dioxide Market by placing CO2 at the forefront of worldwide climate action and industrial development. The drive of CCUS projects and emergence of carbon pricing regimes are building new economic drivers and supply regimes. Advances in DAC and new utilization avenues are broadening the potential for CO2 as an economic resource. Additionally, the emphasis on supply chain resilience, particularly in sectors such as food and beverage, is compelling investment in diversified and more sustainable CO2 sourcing strategies, overall transforming the market toward a low-carbon future.
Strategic Growth Opportunities in the Carbon Dioxide Market
The carbon dioxide market offers several strategic growth possibilities through various principal applications, both from traditional industrial requirements and the rising worldwide imperative for decarbonization. Pinpointing and taking advantage of these different application-based segments is vital for players in the market if they want to achieve continued growth and competitiveness. These possibilities project the dynamic character of the market, wherein creative solutions for CO2 supply, utilization, and control are increasingly important to future prosperity and sustainable environmental management.
• Enhanced Oil Recovery: EOR is a major growth opportunity for CO2, particularly in the case of mature oil fields. Injection of CO2 into oil reservoirs lowers the viscosity of the crude oil and increases the pressure of the reservoir, resulting in the recovery of unextractable oil otherwise. The opportunity is to deliver reliable, high-volume CO2 supply from industrial capture streams or natural reservoirs to EOR projects. Impact: This increases oil production from current assets, extends the economic life of oil fields, and provides a possible route to geological storage of CO2, reconciling economic incentive with carbon management policy in the oil and gas industry.
• Food and Beverage Industry: The food and beverage sector is a reliable, expanding market for high-purity CO2, largely for carbonation in soft drinks and beer, as well as modified atmosphere packaging (MAP) for shelf life extension. The opportunity is to maintain a consistent, food-grade CO2 supply, including on-site recovery systems from biogenic sources such as fermentation. Impact: This secures product quality and safety, increases shelf life minimizing food loss, and accelerates the growth of the beverage industry. Current supply chain disruptions underscore the urgent necessity for robust and diversified CO2 supply for this critical use.
• Chemical and Materials Production: This use offers a high-growth opportunity for CO2 usage in the production of value-added chemicals and materials. This encompasses the employment of CO2 as a raw material for the manufacture of urea (fertilizers), methanol, polymers (such as polycarbonates), and even synthetic fuels. The potential is in the development of high-performing catalytic conversion technologies and production process scaling. Effect: This minimizes dependence on fossil-derived raw materials, generates new sustainable products, and offers a route to utilize captured CO2, thereby driving a circular economy and presenting new income opportunities for chemical producers.
• Agriculture: The agricultural sector provides a specialized but increasing opportunity for CO2 utilization, especially in controlled environment agriculture such as greenhouses and to grow algae. CO2 enrichment in greenhouses maximizes plant growth and crop yield, and algae growth utilizes CO2 to create biofuels, nutraceuticals, or animal feed. The opportunity is to supply stable, controlled CO2 delivery systems and scalable capture technology into agricultural applications. Impact: This enhances agricultural productivity, supports sustainable agriculture, and allows for the creation of new bio-products, which enhance food security and development of bio-resources.
• Building Materials: A developing strategic growth prospect is the use of CO2 in building materials, namely for curing concrete and manufacturing carbonated aggregates. Injecting CO2 into new concrete can speed up curing, increase strength, and immobilize CO2 in the material permanently. The opportunity lies in integrating CO2 injection systems into precast concrete facilities and developing carbonation processes for aggregates. Impact: This reduces the carbon footprint of concrete, a major CO2 emitter, and can improve material properties. It offers a scalable, durable solution for CO2 utilization in a high-volume industry, contributing to decarbonization of the built environment.
These opportunities are having a profound impact on the Carbon Dioxide Market by promoting diversification, inducing technological innovation, and increasing its footprint across a broader range of industrial segments. By leveraging the huge demands from improved oil recovery and stable demand from the food and beverage segment, combined with investing in the high growth potential of chemical, agricultural, and construction applications, the market is diversifying its revenue streams and improving its resilience. This long-term growth strategy is achieved by fulfilling specific, high-value applications needs and establishing CO2 as a dynamic and indispensable resource in a decarbonizing world.
Carbon Dioxide Market Driver and Challenges
The carbon dioxide market is determined by a complicated interplay of forces. The key drivers and challenges consist of some technological, economic, and regulatory variables that have a profound impact on its course and competitive arena. While the market is supported by a worldwide drive towards decarbonization, growing input demand in various uses, and progress in capture and utilization technology, it is also confronted with obstacles like high infrastructure expenses, purity demands, and the volatility of by-product CO2 supply that continuously need to be overcome by companies.
The factors responsible for driving the carbon dioxide market include:
1. Rising Global Interest in Decarbonization and Global Warming Mitigation: One major driver is the mounting global need to cut greenhouse gas emissions and mitigate climate change. This fuels heavy investment in CCUS technologies, and CO2 becomes the focal point for national and corporate decarbonization efforts. Carbon pricing policies and net-zero ambitions encourage industries to proactively manage their CO2 emissions, either by minimizing them or by capturing them and using them.
2. Increasing Demand for CO2 in Enhanced Oil Recovery: The ongoing need for crude oil, especially from older fields, renders Enhanced Oil Recovery (EOR) an important market driver for CO2. Injection of CO2 into oil reservoirs tends to mobilize residual oil, thus enhancing oil production. The use offers a huge economic benefit for the capture and transportation of CO2, particularly in areas with available oil infrastructure. EOR not only enhances hydrocarbon production but also offers a mechanism for geological storage of CO2, conjoining economic and environmental goals.
3. Expansion in Food and Beverage Sector: The strong development of the food and beverage market across the world, especially in developing economies, is a consistent enabler of high-purity CO2. CO2 is required for soft drink carbonation, beer carbonation, and other carbonated beverages, as well as modified atmosphere packaging (MAP) for increasing the shelf life of vulnerable foods. Growth in these sectors is immediately translated into a steady and non-discretionary demand for food-grade CO2, thereby creating a stable market segment irrespective of decarbonization activities.
4. Technological innovations in CO2 capture and utilization: Ongoing innovation in CO2 capture technologies (e.g., more efficient solvents, membranes, direct air capture) and utilization technologies (e.g., conversion to fuels, chemicals, building materials) is a key market driver. These technologies are becoming increasingly economically viable and creating new applications for utilized CO2. As these technologies continue to mature and costs come down, new markets and revenue streams for CO2 are emerging, stimulating investment and take-up.
5. Incentives and Regulatory Support for Carbon Management: Growing government support in the form of tax credits (for example, 45Q in the US), subsidies, grants, and the creation of carbon markets and trading schemes are strong promoters. These policy architectures offer financial support and a well-defined policy lead for industries to invest in CO2 capture, transport, utilization, and storage infrastructure. Such assistance de-risks investment for firms and speeds up the deployment of carbon management technologies, promoting growth in the market.
Challenges in the carbon dioxide market are:
1. Capital and Operating Expenses of CCUS Infrastructure are High: One major challenge is that the enormous up-front capital investment to construct CO2 capture plants, compression facilities, pipes, and storage facilities represents a barrier. Additionally, the costs of operating CO2 capture, such as energy usage in separation operations, may be considerable. These major upfront and recurring costs may discourage industries, particularly if there are no strong carbon pricing or good government incentives in place, making large-scale CCUS projects economically unfeasible without assistance.
2. Purity Levels and Supply Chain Volatility: Various uses of CO2 require different purity levels, which may prove difficult to sustain on a consistent basis, particularly if CO2 is obtained as a by-product from a variety of different industrial processes. The availability of by-product CO2 is also variable, depending on the production cycles of the host industry (e.g., ammonia manufacturing, ethanol plants). This creates a challenge to provide a secure, high-purity supply for demanding applications such as food and beverage, typically resulting in dependence on fewer, larger, and occasionally geographically limited sources.
3. Public Perception and Environmental Concerns Regarding CO2 Storage; Largely due to scientific agreement on the safety of geological CO2 storage, public opinion and possible environmental worries about the long-term security of storage facilities, possible leaks, and seismicity induced by injection are a major challenge. Public resistance threatens to slow or prevent key infrastructure projects like CO2 pipelines and injection wells. These issues can be addressed by open communication, thorough risk evaluations, and strong regulatory monitoring in order to achieve broad acceptance and deployment of CO2 storage technologies.
Overall, the Carbon Dioxide Market is experiencing dynamic change and expansion, led fundamentally by the international need for decarbonization and the mitigation of climate change, and supplemented by the strong demand for CO2 in Enhanced Oil Recovery and the food and beverages sector. Further enhanced by advances in capture and use technologies and strong regulatory backing, the market is opening into new uses. Yet, daunting obstacles remain, such as the high operating and capital expenses associated with CCUS infrastructure, the intricacies of accommodating varied purity levels in an era of volatile supply chains, and the imperative of mitigating public opinion and environmental issues around CO2 storage. Overcoming these obstacles while leveraging the compelling market drivers will be crucial to the long-term development and wider industrial take-up of carbon dioxide management solutions across the world.
List of Carbon Dioxide Companies
Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. With these strategies carbon dioxide companies cater increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the carbon dioxide companies profiled in this report include-
• Acail Gas
• Air Liquide
• Air Products and Chemicals
• Greco Gas
• Linde
• Messer Group
• Sicgil India Limited
• SOL Group
• Quimetal
• Taiyo Nippon Sanso Corporation
Carbon Dioxide Market by Segment
The study includes a forecast for the global carbon dioxide market by source, application, and region.
Carbon Dioxide Market by Source [Value from 2019 to 2031]:
• Hydrogen
• Ethyl Alcohol
• Ethylene Oxide
• Substitute Natural Gas
• Others
Carbon Dioxide Market by Application [Value from 2019 to 2031]:
• Food & Beverages
• Oil & Gas
• Medical
• Rubber
• Firefighting
• Others
Carbon Dioxide Market by Region [Value from 2019 to 2031]:
• North America
• Europe
• Asia Pacific
• The Rest of the World
Country Wise Outlook for the Carbon Dioxide Market
The carbon dioxide market is also experiencing a major shift, fueled by a twin dynamic of rising industrial demand for CO2 in multiple applications and the international imperative of reducing climate change. This multiple dynamic is triggering innovations in CCUS technologies, the evolution of carbon pricing policy, and a move to more sustainable sources of CO2. Industries are looking for stable and environmentally sound means of sourcing or utilizing CO2, deeply transforming conventional supply chains and opening up new market prospects.
• United States: The US carbon dioxide market is heavily impacted by carbon capture, utilization, and storage (CCUS) efforts, as well as enhanced oil recovery (EOR) and the food and beverages sector, but is increasingly being dictated by CCUS efforts. These recent advancements include significant federal incentives such as the 45Q tax credit, spurring industrial emitter large-scale carbon capture project investment. There is increased emphasis on the construction of CO2 pipelines and sequestration facilities to serve these ventures. The market is witnessing more interest in using captured CO2 for sustainable aviation fuel and other industrial purposes, extending beyond the conventional uses.
• China: China’s carbon dioxide market is rapidly changing due to the initiation and widening of its national carbon emissions trading scheme. Recent progress focuses on the contribution of CO2 towards meeting ambitious climate goals, such as peaking emissions earlier than 2030 and reaching carbon neutrality by 2060. Heavy industries such as power generation and cement are being led by massive investment in carbon capture and storage (CCS) technologies. New uses for captured CO2 are also being pursued in synthetic fuels and materials, balancing industrial needs and decarbonization.
• Germany: Germany’s carbon dioxide market is dominated by a focus on decarbonization and sustainable industrial process development. Recent trends point towards actions by German industrial leaders to substantially minimize direct CO2 emissions, prompted by ambitious national and EU climate measures. Carbon capture and utilization (CCU) projects are focusing on finding pathways to convert captured CO2 into usable chemicals or synthetic fuels. The market is also witnessing wider acceptance of CO2 as a refrigerant and for specific industrial purposes, complementary to environmental objectives.
• India: India’s carbon dioxide market is on the verge of dramatic structural transformation, led by its new July 2024 Carbon Credit Trading Scheme (CCTS). Latest additions include setting up a rate-based Emissions Trading System to start with energy-intensive industry, with rules approved for producing voluntary carbon credits from renewable power and green hydrogen. This is intended to support decarbonization and drive private capital mobilization. India is positioning itself strategically as a regional carbon market leader, aligning its development aspirations with climate action that will transform CO2 sourcing and usage.
• Japan: The carbon dioxide market in Japan is fueled by its aim for carbon neutrality by 2050 and leadership in technological innovation. More recent advances are major investments in carbon capture, utilization, and storage (CCUS) projects from hard-to-abate industries such as steel and cement. There is increasing focus on using captured CO2 for methane synthesis (methanation) and value-added chemical production in line with a circular economy thinking. International partnerships for CO2 transport and storage infrastructure are being explored by Japan in support of its own decarbonization efforts.
Features of the Global Carbon Dioxide Market
Market Size Estimates: Carbon dioxide market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends (2019 to 2024) and forecast (2025 to 2031) by various segments and regions.
Segmentation Analysis: Carbon dioxide market size by source, application, and region in terms of value ($B).
Regional Analysis: Carbon dioxide market breakdown by North America, Europe, Asia Pacific, and Rest of the World.
Growth Opportunities: Analysis of growth opportunities in different sources, applications, and regions for the carbon dioxide market.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the carbon dioxide market.
Análisis de la intensidad competitiva de la industria basada en el modelo de cinco fuerzas de Porter.
Preguntas frecuentes
Q1. What is the growth forecast for carbon dioxide market?
Answer: The global carbon dioxide market is expected to grow with a CAGR of 5.1% from 2025 to 2031.
Q2. What are the major drivers influencing the growth of the carbon dioxide market?
Answer: The major drivers for this market are the increasing demand for food preservation, the growing use in industrial applications, and the rising adoption in enhanced oil recovery.
Q3. What are the major segments for carbon dioxide market?
Answer: The future of the carbon dioxide market looks promising with opportunities in the food & beverage, oil & gas, medical, rubber, and firefighting markets.
Q4. Who are the key carbon dioxide market companies?
Answer: Some of the key carbon dioxide companies are as follows:
• Acail Gas
• Air Liquide
• Air Products and Chemicals
• Greco Gas
• Linde
• Messer Group
• Sicgil India Limited
• SOL Group
• Quimetal
• Taiyo Nippon Sanso Corporation
Q5. Which carbon dioxide market segment will be the largest in future?
Answer: Lucintel forecasts that, within the source category, hydrogen is expected to witness the highest growth over the forecast period.
Q6. In carbon dioxide market, which region is expected to be the largest in next 5 years?
Answer: In terms of region, APAC is expected to witness the highest growth over the forecast period.
Q7. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.
This report answers following 11 key questions:
Q.1. What are some of the most promising, high-growth opportunities for the carbon dioxide market by source (hydrogen, ethyl alcohol, ethylene oxide, substitute natural gas, and others), application (food & beverages, oil & gas, medical, rubber, firefighting, and others), and region (North America, Europe, Asia Pacific, and the Rest of the World)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. Which region will grow at a faster pace and why?
Q.4. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.5. What are the business risks and competitive threats in this market?
Q.6. What are the emerging trends in this market and the reasons behind them?
Q.7. What are some of the changing demands of customers in the market?
Q.8. What are the new developments in the market? Which companies are leading these developments?
Q.9. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.10. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.11. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?
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