The global carbon dioxide market was valued at USD 6.72 billion in 2020 and is expected to grow at a CAGR of 4.4% during the forecast period. Increasing enhanced oil recovery operations by upstream players to maintain their production levels, are expected to boost the market demand. Increasing use of gas in application industries such as refrigeration, food & beverages, chemical wholesaling, and pharmaceuticals is projected to propel the market growth.
Growing demand for carbonated drinks and soda water is a major factor contributing to the market growth over the next few years. The high cost of carbon dioxide (CO2) capture, liquefaction, and transportation is anticipated to act as the key restraining factor for market growth. Concerns regarding the oversupply of carbon dioxide (CO2) from numerous potential sources and the subsequent reduction in its price are likely to hamper the carbon dioxide (CO2) industry growth.
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Major end-use industries of the gas include food & beverages, oil & gas, medical, rubber, and firefighting. The companies involved in forward integration are Universal Industrial Gases, Inc., Air Products & Chemicals, Inc., Airgas, Inc., and Praxair, Inc. These companies are involved in the production of sources from which CO2 is produced along with its separation & recovery.
Carbon dioxide (CO2) is a high-profile greenhouse gas and valuable market commodity. Its demand as an industrial gas is increasing at a significant rate. Commonly, carbon dioxide (CO2) is produced from burning fossil fuels. An excess amount in the atmosphere can result in a significant increase in the temperature. This can result in global warming, suffocation of living organisms, and various other health-related problems. It can also be toxic and harmful to humans.
To overcome these problems globally, governments have established various regulations and directives on Carbon Capture and Storage (CCS) for the safe storage and transportation of the product. These legal frameworks contain provisions regarding the capture and transport components of CCS technology. Globally, government agencies have formulated various regulations for the proper storage and transportation of the industrial gas. These regulations are beneficial for preventing environmental & health risks. In addition, these regulations also provide security of the carbon dioxide (CO2) storage sites.
Increasing use in upstream activities and aging of production wells is anticipated to further augment the market over the forecast period. Large amounts of carbon dioxide (CO2) raw materials are used as insert gasses in chemical processes. It is also majorly used as a shield gas in MIG/MAG welding for protecting the weld puddle from oxidation in the construction sector.
The market is primarily segmented on the basis of source, application, and region.
Ethyl alcohol accounted for over 30% of the global market revenue in 2020. The formation of carbon dioxide (CO2) from ethanol formation has been one of the common practices in the North American region. Growth in ethanol production across the globe for its use as an alternative fuel will support growth across the market. In addition, the lower pollution from the ignition of the fuel is the key trend further driving the demand.
Hydrogen is widely used for refining activities which result in CO2 formation. In addition, hydrogen application across the chemical industry also produces carbon dioxide (CO2). The growing demand for pure hydrogen for various projects across the globe is supporting CO2 formation. Hydrogen is witnessing a wide range of applications across Energy, Automotive, and various novel application. Growing hydrogen production sites across the globe will further support the production of CO2 across the globe.
Carbon dioxide (CO2) is obtained from the ethylene oxide production process formed during the methanol synthesis. Growing demand for recovering this carbon dioxide will fuel the product demand. In addition, the carbon dioxide (CO2) demand application is witnessing growth across the industry which will further proliferate the overall segment market growth.
High costs of natural gas and relative shortage of the same in the recent past led to the segment occupying a comparatively low market share as compared to other source segments. The process of carbon dioxide (CO2) extraction is complex and requires high capital costs due to the heavy equipment involved. For example, the purified gases are required to pass over series of methanation reactors in order to bring the gas to equilibrium.
The food & beverage market segment is expected to witness significant growth of 4.8% over the forecast period. Carbon dioxide (CO2) is used in all three forms namely, solid, liquid, and gaseous forms in the food & beverage industry. Stricter quality control norms and high demand for quality goods have resulted in companies tracking the quality of CO2 in real-time and implement strict systems for the same, thus resulting in increased buyer power with regards to the industry segment.
The application of carbon dioxide in the medical market sector is growing significantly. It is commonly used as an insufflation gas for various surgeries (including endoscopy, arthroscopy, and laparoscopy). In these surgeries, CO2 is used to stabilize and inflate the body cavities to better the surgical area's visibility. In addition, it is also used for increasing blood flow to the brain and helps stimulates respiration.
The oil & gas industry is aiming to effectively tackle the problem of climate change by injecting the CO2 underground for EOR as well as long-term storage purposes. In addition, the industry is also taking advantage of the newly developed sorbents for CO2 capture, which are relatively less expensive. Unfavorable characteristics of current sorbents in use led to the development of new varieties of sorbents.
Supercritical fluid extraction (SFE) techniques are playing a critical role in the market growth of the rubber industry across the globe. These techniques use carbon dioxide as this combination collectively has a number of advantages such as purity factor maintenance, sample recovery, short processing time, and high selectivity in products, among others.
North America carbon dioxide market accounted for 38.9% of the global market revenue share in 2020. The rising standard of living of the consumers in North America is projected to positively drive the global carbon dioxide (CO2) market.
High market demand for large-scale refrigeration is expected to play an important role in complementing the market over the forecast period. Growing industries in the Asia Pacific owing to the emerging economies and rising industrial expenditure in Middle East & Africa region is anticipated to positively drive the market growth.
Europe’s Emissions Trading Scheme (ETS) structural reform of is underway, with several changes modified to ensure that it sets a new price on carbon, that is sufficient for supporting the trending transition to enable the development of a low-carbon economy. EU’s New Entrants Reserve (NER) financial mechanism system has also been renewed. Its 400 million worth emission allowances have been dedicated for the establishment of an innovation fund for post-2020 period.
Before 2020, the specified market stability reserve (MSR) represents the placement of 50 million allowances for several low-carbon emission and generation innovative prototypes, that is aimed at supplementing the current NER 300. Such trends are expected to positively contribute to Europe CO2 market growth.
Some of the key market participants in the carbon dioxide market include Universal Industrial Gases, Inc., Linde AG, Air Products & Chemicals, Inc., Inox Air Products Ltd., Airgas, Inc., Taiyo Nippon Sanso Corp., Praxair, Inc., Matheson Tri-Gas, Inc., The BOC Group, AGA AB, Air Liquide, and (Gas) National Industrial Gases Company.
Companies are developing advanced CO2 capturing and storage technologies such as CCS for effectively capturing, purifying, liquefying, and storing CO2. These companies are also involved in developing effective systems for transporting CO2, which include pipelines, ships, rail, and road tankers. CCS technology is more effective for CO2 in liquid and gas states.