Middle East Carbon Dioxide Market Size, Share, Trends, Industry Analysis Report

Overview

The Middle East carbon dioxide (CO2) market size was valued at USD 1.33 billion in 2024, growing at a CAGR of 5.60% from 2025 to 2034. Key factors driving demand for CO2 include increasing automobile production, high polymer production, and expanding urbanization.

Key Insights

• The ethyl alcohol segment accounted for a major revenue share in 2024 due to its extensive use in pharmaceuticals and food and beverage applications.
• The food & beverages segment held the largest revenue share in 2024 due to expanding consumption of packaged foods and processed products.
• Saudi Arabia held the largest Middle East carbon dioxide (CO2) market share in 2024, owing to high consumption of CO2 across food processing, beverages, oil and gas, and medical applications.
• The UAE market is projected to hold a substantial revenue share by 2034, driven by increasing investments in industrial gases.

Industry Dynamics

• High polymer production in the Middle East is driving the demand for carbon dioxide (CO2) as polymer manufacturers increasingly utilize it at various stages of plastic manufacturing.
• Increasing production of automobiles is fueling the adoption of carbon dioxide as automakers utilize CO2 as a shielding gas in welding processes, particularly for joining lightweight materials such as aluminum and high-strength steels.

• Rising 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 restrains the market growth.

Market Statistics

• 2024 Market Size: USD 1.33 Billion
• 2034 Projected Market Size: USD 2.29 Billion
• CAGR (2025–2034): 5.60%
• Saudi Arabia: Largest Market Share in 2024

AI Impact on Middle East CO2 Market

• AI optimizes energy use in oil and gas operations, reducing CO2 emissions across Middle East industries.
• Smart grids and AI-driven forecasting enhance the integration of renewable energy, reducing dependence on fossil fuels.
• AI enhances carbon capture and storage (CCS) efficiency by modeling the behavior of subsurface CO2.
• Predictive maintenance in industrial plants minimizes energy waste and CO2 output.

Carbon dioxide (CO2) is a colorless, odorless gas naturally present in the Earth’s atmosphere, essential for photosynthesis in plants. It is also a byproduct of respiration and the combustion of fossil fuels. CO2 has various industrial uses, it is employed in food and beverage production, refrigeration, portable fire extinguishers, and enhanced oil recovery. In agriculture, CO2 enrichment boosts plant growth in greenhouses. Carbon capture and utilization technologies are also creating paths to reuse CO2 into fuels, chemicals, and building materials, aiming to reduce emissions and support a circular carbon economy.

The Middle East is a major contributor to global carbon dioxide (CO2) emissions, primarily due to its vast fossil fuel reserves and energy-intensive economies. Countries such as Saudi Arabia, Iran, the UAE, and Kuwait rank among the world’s highest per capita emitters, driven by oil and gas production, refining, and domestic energy consumption. Power generation and desalination plants, crucial in the arid region, rely heavily on fossil fuels, further increasing CO2 emissions.

The demand for carbon dioxide (CO2) in the Middle East is driven by expanding urbanization. United Nations Development Programme, in its findings, stated that the urban population in the Arab region is projected to reach 58% by 2030, up from 55.8% in 2015. This is driving the need for more food and beverages, especially carbonated drinks and packaged goods that use CO2 for carbonation and preservation. Urbanization is also increasing the development of urban infrastructure, including shopping malls, restaurants, and entertainment venues, which is propelling the need for CO2 in refrigeration, fire suppression systems, and even in the production of certain building materials. Moreover, urbanization is fueling the growth of industries such as welding, water treatment, and chemical manufacturing, all of which consume significant amounts of CO2. Therefore, as urbanization expands in the Middle East, the demand for CO2 is projected to increase in the coming years.

Drivers & Opportunities

High Polymer Production: The high polymer production in the Middle East is driving the demand for carbon dioxide (CO2) as polymer manufacturers increasingly utilize it at various stages of plastic manufacturing. According to the Gulf Petrochemicals and Chemicals Association (GPCA), Saudi Arabia produced 19.4. million tons of polymer in 2022. CO2 acts as a key ingredient in the production of polycarbonates and polyurethanes, where it serves as a reactant to create foams, adhesives, and specialty plastics. The polymer manufacturers also consume CO2 for supercritical fluid extraction and as a blowing agent, which enhances product quality and reduces the need for traditional solvents. Additionally, CO2 plays a role in polymer recycling processes, further driving its consumption. Therefore, as demand for lightweight, durable, and high-performance polymers grows, particularly in the automotive, construction, and packaging sectors, manufacturers increase their use of CO2 to meet production targets.

Increasing Production of Automobiles: Automakers utilize CO2 as a shielding gas in welding processes, particularly for joining lightweight materials such as aluminum and high-strength steels, which are commonly used in modern vehicles. CO2 also plays a role in the manufacturing of certain adhesives and sealants that bond automotive components together. The expansion of automotive assembly lines and the push for innovation in vehicle design continue to increase the reliance on CO2. Hence, as automobile production rises to meet growing consumer demand, especially for hybrid and electric vehicles, the need for advanced materials and precision manufacturing processes further fuels the consumption of 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 a major revenue share in 2024 due to its extensive use in food and beverages, pharmaceuticals, and industrial applications. Producers in the region relied heavily on fermentation processes that release large volumes of CO2 as a byproduct, making ethyl alcohol a consistent and cost-effective source of supply. The strong expansion of breweries, soft drink manufacturers, and pharmaceutical production facilities in countries such as Saudi Arabia and the UAE strengthened the dominance of the segment. Growing investments in bio-based ethanol production also supported the availability of CO2 from this source, allowing industries to secure reliable volumes for their operations.

The substitute natural gas segment is projected to grow at a robust pace in the coming years, owing to the rising energy diversification initiatives and increasing adoption of alternative fuels. Governments across the region continue to invest in substitute natural gas projects to reduce dependence on crude oil. These projects generate CO2 as a byproduct, which industries can efficiently capture and reuse in enhanced oil recovery, food processing, and chemical manufacturing. The shift toward cleaner energy solutions, combined with the need for industrial decarbonization, is propelling the adoption of SNG-based CO2.

Application Analysis

In terms of application, the segmentation includes food & beverages, oil & gas, medical, rubber, firefighting, and others. The food & beverages segment held the largest revenue share in 2024 due to expanding consumption of carbonated drinks, packaged foods, and processed products. Beverage companies in Saudi Arabia, the UAE, and other Gulf nations used CO2 extensively for carbonation, packaging, and preservation to meet the growing demand from young and urban populations. Rising investments in modern retail and quick-service restaurants further increased the requirement for CO2 in food processing and storage. The strong preference for convenience foods and the expansion of cold chain logistics also strengthened the dominance of the segment.

The oil & gas segment is projected to grow at a rapid pace during the forecast period, owing to the increasing use of CO2 in enhanced oil recovery (EOR) projects. Countries in the Gulf continue to focus on maximizing output from their oil fields, and injecting CO2 has proven to be an effective technique for boosting reservoir pressure and improving recovery rates. National oil companies in Saudi Arabia, Qatar, and the UAE are accelerating investments in CO2 capture and utilization technologies to align with both production and sustainability goals.

Country Analysis

The Saudi Arabia carbon dioxide (CO2) market held the largest revenue share in 2024. This dominance is attributed to its strong industrial base and high consumption of CO2 across food processing, beverages, oil and gas, and medical applications. The expansion of the beverage sector in the country due to rising demand for carbonated drinks and packaged foods has fueled the adoption of carbon dioxide. Oil companies in the country also invested heavily in enhanced oil recovery (EOR) projects, which created consistent demand for CO2. The government’s focus on industrial diversification under Vision 2030 further encouraged domestic CO2 production and utilization, making Saudi Arabia the leading contributor to overall market revenues.

The UAE market is projected to hold a substantial revenue share by 2034, driven by increasing investments in industrial gases and carbon capture, utilization, and storage (CCUS) projects. In September 2023, ADNOC announced a final investment decision (FID) to develop one of the largest carbon capture projects in the Middle East and North Africa (MENA) to meet the UAE’s decarbonization goals. The UAE’s strong food and beverage sector, supported by its status as a regional hub for trade and tourism, is projected to consume large volumes of CO2 for carbonation and packaging. Additionally, the government’s ambitious sustainability goals and net-zero initiatives are driving the adoption of CO2-based EOR technologies in oil fields, which is enhancing the country’s role in the market.

Key Players & Competitive Analysis

The Middle East carbon dioxide (CO2) market is a dynamic and rapidly evolving competitive landscape, dominated by major industrial gas giants and regional energy powerhouses. Global leaders, including Linde PLC, Air Products, and Air Liquide, utilize advanced technology and extensive infrastructure to serve diverse sectors. They compete directly with established regional players such as ADNOC, Aramco, and SABIC, which utilize their vast captive CO2 sources from refineries and petrochemical plants. Gulf Cryo holds a strong position in the merchant supply sector. This competition is further shaped by strategic partnerships, such as those between EIG and Air Products or Technip Energies, which provide engineering solutions and intensify competition as the region pursues its carbon capture, utilization, and storage (CCUS) ambitions.

A few major companies operating in the Middle East carbon dioxide (CO2) market include ADNOC; Air Liquide; Air Products and Chemicals, Inc.; Aramco; EIG; Gulf Cryo; Linde PLC; SABIC; Sicgil; and Technip Energies.

Key Companies

• ADNOC
• Air Liquide
• Air Products and Chemicals, Inc.
• Aramco
• EIG
• Gulf Cryo
• Linde PLC
• SABIC
• Sicgil
• Technip Energies

Middle East Carbon Dioxide (CO2) Industry Developments

In March 2025, Aramco launched Saudi Arabia’s first CO2 Direct Air Capture (DAC) test unit, capable of removing 12 tons of carbon dioxide per year from the atmosphere.

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.

Middle East Carbon Dioxide (CO2) 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)

• Saudi Arabia
• UAE
• Qatar
• Israel
• Rest of Middle East

Middle East Carbon Dioxide (CO2) Market Report Scope