Europe Carbon Dioxide Market Size, Share, Trends, Industry Analysis Report

Overview

The Europe carbon dioxide (CO2) market size was valued at USD 1.74 billion in 2024, growing at a CAGR of 3.86% from 2025 to 2034. Key factors driving demand for carbon dioxide (CO2) in Europe include rising production of automobiles, growing demand for carbonated drinks, and expanding urbanization.

Key Insights

• The ethyl alcohol segment accounted for 31.76% of revenue share in 2024 due to extensive use of ethanol fermentation in the region’s beverage and biofuel industries.
• The oil & gas segment held 67.31% of revenue share in 2024 due to the widespread use of carbon dioxide in enhanced oil recovery (EOR) operations.
• The UK accounted for 42.07% of the Europe carbon dioxide market share in 2024, owing to its strong presence in oil and gas operations.
• The market in Germany is expected to register a CAGR of 3.99% from 2025 to 2034, owing to the growing food & beverage industry.

Industry Dynamics

• Rising production of automobiles in Europe is driving the demand for carbon dioxide (CO2) as automakers extensively use CO2 in welding and metal fabrication, where it acts as a shielding gas to prevent oxidation and ensure high-quality joints.
• Growing demand for carbonated drinks is fueling the need for carbon dioxide (CO2), as CO2 is the essential ingredient that gives these beverages their fizz.
• Increasing demand for medical-grade CO2 in surgeries is expected to create a lucrative market opportunity during the forecast period.
• High energy consumption for storing CO2 hinders the market growth.

Market Statistics

• 2024 Market Size: USD 1.74 Billion
• 2034 Projected Market Size: USD 2.55 Billion
• CAGR (2025–2034): 3.86%
• UK : Largest Share in 2024

AI Impact on Europe CO2 Market

• AI optimizes energy use in industries and power grids, reducing CO2 emissions across Europe.
• AI accelerates innovation in carbon capture and storage, increasing efficiency and reducing costs, thus strengthening Europe’s low-carbon economy and advancing its goal of climate neutrality by 2050.
• Machine learning enhances carbon monitoring, improving accuracy in emissions reporting and ETS compliance.

The Europe carbon dioxide market plays a crucial role across diverse industries, driven by its extensive applications in food and beverages, medical, oil and gas, and chemicals. Food and beverage companies use CO2 for carbonation, packaging, and preservation, while the medical sector relies on it for respiratory therapies and minimally invasive surgeries. In oil and gas industry, enhanced oil recovery techniques utilize CO2 to improve extraction efficiency, while the chemical industry uses it as a feedstock for producing methanol, urea, and other compounds.

Europe’s strong emphasis on sustainability and circular economy practices is supporting the development of CO2 capture, utilization, and storage (CCUS) technologies, which align with the region’s climate neutrality targets under the European Green Deal. Countries such as Germany, France, and the UK are leading the market growth due to their advanced industrial bases and growing investment in carbon capture projects. Rising demand for decarbonization, coupled with regulatory support and technological innovation, continues to shape the growth of the European CO2 market.

The Europe carbon dioxide market demand is driven by the growing urbanization. European Commission, in its report, stated that Europe's level of urbanization is expected to increase to approximately 83.7% in 2050. This is driving higher demand for food and beverages, where CO2 plays a crucial role in carbonation, packaging, and refrigeration. Urbanization is further leading to the development of various infrastructure, such as hospitals, water treatment plants, and fire suppression buildings, which is increasing CO2 usage for applications like medical procedures, pH control, and fire extinguishers. Additionally, urban lifestyles and consumer habits are fueling demand for electronics, plastics, and chemicals, all of which require CO2 in their manufacturing. Therefore, the growing urbanization is fueling the demand for carbon dioxide in Europe.

Drivers & Opportunities

Rising Production of Automobiles: Automakers extensively use CO2 in welding and metal fabrication, where it acts as a shielding gas to prevent oxidation and ensure high-quality joints. The rising production of automobiles is further increasing the manufacturing of car components, such as plastics, rubbers, and foams that rely on CO2 for molding, blowing agents, and chemical reactions, leading to market growth. European Automobile Manufacturers' Association, in its report, stated that 14.8 million vehicles are manufactured in the European Union per year. Paint shops in automobile plants also utilize CO2 for surface treatment and cleaning, while assembly lines employ CO2-based lasers for precise cutting and marking. Additionally, the automotive industry requires CO2 for testing and calibrating emission systems, as well as for leak detection in fuel tanks and air conditioning units. Hence, as automobile production rises in the region, the demand for carbon dioxide also increases.

Growing Demand for Carbonated Drinks: Increasing demand for carbonated drinks is fueling the need for carbon dioxide (CO2), as CO2 is the essential ingredient that gives these beverages their fizz. The British Soft Drinks Association, in its report, stated that carbonated drinks accounted for 38.6% of the UK soft drinks market share. Carbonated beverage manufacturers inject CO2 into water and flavored syrups under pressure to create carbonation, a process that requires large and consistent supplies of high-purity CO2. Additionally, the packaging and preservation of carbonated drinks rely on CO2 to maintain freshness and extend shelf life. The expansion of the beverage industry, including new product lines, craft sodas, and ready-to-drink cocktails, is further propelling CO2 usage. Therefore, as consumer preferences shift toward sparkling waters, sodas, and flavored carbonated drinks, production volumes rise, pushing demand for CO2.

Segmental Insights

Source Analysis

Based on source, the segmentation includes hydrogen, ethyl alcohol, ethylene oxide, substitute natural gas, and others. The ethyl alcohol segment accounted for 31.76% of revenue share in 2024 due to extensive use of ethanol fermentation in the region’s beverage and biofuel industries, which generates CO2 as a valuable byproduct. Breweries, wineries, and distilleries across Europe rely heavily on ethanol fermentation processes, creating a steady supply of food-grade carbon dioxide for applications in carbonated beverages, food preservation, and modified atmosphere packaging. Additionally, the rising demand for bioethanol as a renewable fuel has strengthened the segment’s position.

The substitute natural gas segment is projected to grow at a CAGR of 4.33% from 2025 to 2034, owing to a strong focus on decarbonization and the growing investments in renewable and low-carbon fuels. Substitute natural gas production through biomass gasification and power-to-gas technologies generates high amounts of recoverable CO2, which can be captured and utilized across industries such as food, energy, and chemicals. Policymakers in the European Union are supporting cleaner energy alternatives, which is boosting the adoption of substitute natural gas and simultaneously expanding the availability of CO2 from this source. The rapid technological advancements and government incentives aimed at reducing reliance on fossil fuels are further accelerating the expansion of the segment.

Application Analysis

In terms of application, the segmentation includes food & beverages, oil & gas, medical, rubber, firefighting, and others. The oil & gas segment held 67.31% of revenue share in 2024 due to widespread use of carbon dioxide in enhanced oil recovery (EOR) operations, where it helps increase crude extraction efficiency from reservoirs. Energy companies in countries such as Norway and the UK relied heavily on CO2 flooding techniques to optimize production and extend the life cycle of declining oil fields. Additionally, the rising focus on carbon capture, utilization, and storage (CCUS) projects across the region supported demand from this sector, as companies sought to reduce emissions while simultaneously improving hydrocarbon recovery. The strategic importance of energy security and the need to maintain steady crude output further contributed to the dominance of the segment.

The food & beverages segment is expected to register a CAGR of 4.18% from 2025 to 2034, owing to expanding consumption of carbonated drinks, packaged foods, and ready-to-drink beverages across European countries. Producers of these products are using CO2 extensively for carbonation, preservation, chilling, and modified atmosphere packaging to maintain product quality and extend shelf life. The shift in consumer preference toward convenience foods and premium beverages continues to fuel demand, particularly in countries such as Germany, France, and Italy, which host some of the region’s largest beverage manufacturers. Moreover, the rising trend of sustainable sourcing is pushing industries to capture CO2 from bio-based and industrial processes, ensuring a steady supply for food applications.

Country Analysis

The UK carbon dioxide market accounted for 42.07% of the revenue share in Europe in 2024. This is attributed to its strong presence in oil and gas operations and advanced carbon capture initiatives. The country’s extensive use of carbon dioxide for enhanced oil recovery in the North Sea fields also contributed to this dominance. The UK government’s aggressive push toward carbon capture, utilization, and storage (CCUS) projects further increased demand, as major energy companies integrated CO2 in both emission reduction strategies and industrial applications. Additionally, a strong beverage industry relying on carbon dioxide for carbonation and packaging strengthened the country’s dominant position.

The Germany carbon dioxide market is expected to register a CAGR of 3.99% from 2025 to 2034, owing to rising CO2 demand across food, beverage, and industrial sectors. The country’s large-scale beverage production industry, with strong exports of carbonated drinks and beers, is heavily driving CO2 consumption. Germany’s manufacturing sector also uses carbon dioxide in welding, cooling, and other industrial processes. The government’s strong emphasis on renewable energy and sustainable sourcing is also encouraging the use of bio-based CO2 recovery methods, aligning with Europe’s decarbonization goals. Growing consumer demand for packaged foods and beverages in the country is making Germany the fastest-expanding country during the forecast period.

Key Players & Competitive Analysis

The European carbon dioxide market features a competitive landscape shaped by key industrial gas suppliers and energy firms driving innovation and sustainability. Major players such as Linde PLC, Air Liquide S.A., and Air Products and Chemicals, Inc. dominate through extensive production networks and technological expertise. Regional companies such as Messer Group GmbH, SIAD Group, and SOL Group strengthen competition with localized supply and niche applications. Energy firms including RWE AG, Ørsted A/S, Vattenfall AB, and Orlen are increasingly integrating CO2 capture and utilization into decarbonization strategies. Emerging innovators such as LanzaTech Global, Inc. are advancing carbon recycling technologies. Intensifying regulatory pressures and carbon neutrality goals are prompting strategic collaborations, investments in carbon capture, utilization, and storage (CCUS), and a shift toward sustainable CO2 sourcing.

A few major companies operating in the Europe carbon dioxide (CO2) industry include Air Liquide S.A.; Air Products and Chemicals, Inc.; LanzaTech Global, Inc.; Linde PLC; Messer Group GmbH; Orlen; Ørsted A/S; RWE AG; SIAD Group; SOL Group; and Vattenfall AB.

Key Players

• Air Liquide S.A.
• Air Products and Chemicals, Inc.
• LanzaTech Global, Inc.
• Linde PLC
• Messer Group GmbH
• Orlen
• Ørsted A/S
• RWE AG
• SIAD Group
• SOL Group
• Vattenfall AB

Europe Carbon Dioxide (CO2) Industry Developments

In July 2023, Technip Energies and LanzaTech Global, Inc. signed a joint collaboration agreement to transform waste carbon into ethylene, the most common building block in petrochemicals.

In December 2023, ORLEN Group acquired a stake in a carbon dioxide storage project in Norway.

In November 2023, Yara International and Northern Lights, a CO2 transport and storage supplier, signed a binding commercial agreement, enabling the first cross-border transportation and storage of CO2.

Europe Carbon Dioxide Market Segmentation

By Source Outlook (Revenue, USD Billion, Volume Kiloton, 2020–2034)

• Hydrogen
• Ethyl Alcohol
• Ethylene Oxide
• Substitute Natural Gas
• Others

By Application Outlook (Revenue, USD Billion, Volume Kiloton, 2020–2034)

• Food & Beverages
• Oil & Gas
• Medical
• Rubber
• Firefighting
• Others

By Country Outlook (Revenue, USD Billion, Volume Kiloton, 2020–2034)

• Germany
• France
• UK
• Italy
• Spain
• Netherlands
• Russia
• Rest of Europe

Europe Carbon Dioxide Market Report Scope