United Kingdom Carbon Dioxide Market Outlook 2025-2034: Growth Trends, Challenges, and Future Opportunities

The United Kingdom carbon dioxide market size has witnessed steady growth, reaching 725.80 KMT in 2024. Over the next decade, it is projected to grow at a CAGR of 1.50%, reaching 842.32 KMT by 2034. This growth is driven by increasing demand from industries such as food and beverage, healthcare, manufacturing, agriculture, and enhanced oil recovery (EOR).

CO₂ is an essential component in various applications, including carbonated beverages, medical treatments, welding, and water treatment. As the UK moves toward its net-zero emissions target, industries are increasingly investing in carbon capture, utilisation, and storage (CCUS) technologies, paving the way for a more sustainable CO₂ market. However, supply chain disruptions, environmental regulations, and the rising cost of production pose challenges for the industry.

This article explores the market dynamics, key drivers, challenges, trends, segmentation, and future opportunities shaping the UK carbon dioxide market from 2025 to 2034.

Growing Demand in Key Industries

One of the primary drivers of the UK CO₂ market is its extensive use in the food and beverage industry. CO₂ is widely used in carbonated drinks, food packaging, freezing, and chilling applications. With changing consumer preferences and the rising demand for ready-to-eat and frozen food products, the need for food-grade CO₂ continues to grow. Supermarkets, fast-food chains, and beverage manufacturers rely on a steady CO₂ supply, making this sector a key contributor to market expansion.

Another crucial area where CO₂ plays a vital role is healthcare. Hospitals and medical facilities use high-purity CO₂ in minimally invasive surgeries, respiratory treatments, and cryotherapy. As medical technology advances and the demand for surgical procedures increases, the need for medical-grade CO₂ is expected to rise significantly.

The manufacturing and industrial sectors also heavily depend on CO₂ for welding, metal fabrication, and chemical processing. With infrastructure development and industrial expansion continuing across the UK, demand for industrial-grade CO₂ remains strong.

Additionally, the oil and gas sector utilises CO₂ in enhanced oil recovery (EOR) to maximise extraction from mature oil fields. Despite the UK’s declining oil production, EOR techniques are helping extend the lifespan of existing reservoirs, ensuring continued demand for CO₂.

Challenges Impacting Market Growth

Despite its steady demand, the CO₂ market in the UK faces several challenges. Supply chain disruptions have significantly impacted CO₂ availability, primarily due to temporary shutdowns of ammonia plants, which are a major source of CO₂ production. The industry’s reliance on a limited number of production facilities increases vulnerability to shortages, affecting businesses that depend on CO₂.

Environmental regulations also present a challenge. The UK government has implemented strict carbon emission policies to reduce industrial greenhouse gas emissions. While carbon capture, utilisation, and storage (CCUS) technologies help mitigate environmental impact, compliance with emission reduction targets adds operational costs for businesses.

Another major issue is the rising cost of energy, which affects the production and transportation of CO₂. The energy crisis has led to higher electricity and natural gas prices, making CO₂ production more expensive. Businesses must find cost-effective solutions to ensure a stable and affordable CO₂ supply.

Additionally, competition from alternative gases poses a threat to CO₂ demand. Industries are exploring substitutes like nitrogen and argon in certain applications, such as welding and refrigeration, to reduce their reliance on CO₂. While CO₂ remains irreplaceable in several key industries, the growing adoption of alternative gases could impact its future demand.

Emerging Trends in the UK CO₂ Market

Sustainability is becoming a key focus in the CO₂ market, leading to the development of green CO₂ production methods. Companies are investing in bio-based CO₂, direct air capture (DAC), and carbon-neutral production technologies to reduce emissions and promote sustainable CO₂ use. These innovations support the UK’s transition toward a low-carbon economy.

Another emerging trend is the use of CO₂ in smart agriculture. Controlled environment agriculture (CEA), such as greenhouses, is incorporating CO₂ to boost plant growth and improve crop yields. With the increasing need for sustainable food production, demand for agricultural-grade CO₂ is expected to rise in the coming years.

CO₂ is also playing an important role in refrigeration systems, as industries move away from synthetic refrigerants due to environmental concerns. CO₂-based refrigeration is gaining popularity in supermarkets and food storage facilities because it offers an eco-friendly alternative with lower global warming potential (GWP).

Another noteworthy development is the expansion of CO₂ usage in water treatment applications. Municipalities and industries are incorporating CO₂ for pH control and wastewater purification, ensuring cleaner water supply and better environmental management.

Market Segmentation: Key Applications and End-Use Sectors

The UK CO₂ market is segmented based on source, application, and end-use industries.

By Source

• Natural Sources – CO₂ extracted from underground reservoirs
• Industrial Sources – CO₂ recovered from ammonia, ethanol, and hydrogen production
• Bio-Based Sources – CO₂ captured from fermentation and biomass processing

By Application

• Food and Beverage – Carbonation, food freezing, and packaging
• Healthcare – Medical-grade CO₂ for surgical and respiratory treatments
• Manufacturing and Welding – Metal fabrication and industrial applications
• Oil and Gas (EOR) – Enhanced oil recovery techniques
• Agriculture – CO₂ for greenhouse farming
• Water Treatment – Wastewater purification and pH balancing

By Region

• England – Largest consumer due to industrial and food sector demand
• Scotland – Growing investments in CCUS projects
• Wales – Rising demand from industrial and agricultural applications
• Northern Ireland – Increasing CO₂ use in healthcare and food processing

Future Outlook: Opportunities in the CO₂ Market

The future of the UK CO₂ market looks promising, with increased investments in carbon capture and utilisation technologies. As the UK progresses towards its 2050 net-zero emissions goal, CCUS projects will play a crucial role in reducing industrial CO₂ emissions while creating a stable supply for commercial use.

New advancements in CO₂-to-fuel technologies are also gaining momentum. Companies are developing synthetic fuels using captured CO₂, opening new revenue streams and supporting the transition to sustainable energy sources.

Additionally, direct air capture (DAC) is emerging as a game-changer in the industry. DAC technology allows CO₂ to be extracted directly from the atmosphere, providing a sustainable alternative for industries requiring pure CO₂.