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The global carbon dioxide market size was USD 10.36 billion in 2020. The global impact of COVID-19 has been unprecedented and staggering, with the product witnessing a fueling demand shock across all regions amid the pandemic. Based on our analysis, the global market exhibited a growth of 3.0% in 2020. The market is projected to grow from USD 10.69 billion in 2021 to USD 13.65 billion in 2028 at a CAGR of 3.6% during the 2021 to 2028 period. The sudden rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Carbon dioxide is a colorless gas and is often referred to by the chemical formula CO2. It is a chemical compound consisting of one carbon atom bonded with two oxygen atoms and is 60% denser than dry air. CO2 is present in the earth’s atmosphere in low concentrations and acts as a greenhouse gas. This gas is used in various industries for several applications that are usually obtained during the production of hydrogen by steam reforming of natural gas or the production of ethanol by fermentation.
Owing to its properties, CO2 is a versatile compound and has many applications in different forms. It is used as an acidifier in water treatment, inert gas for metalworking and fire suppression, solvent for oil recovery, and freezing applications. The rising demand for carbonated beverages from consumers is fueling the carbon dioxide market growth.
Surge in Demand from Food Industry amidst Pandemic to Support Market Development
The recent COVID-19 pandemic has led to a decline in global productivity, decreased production capabilities, and negatively impacted several countries worldwide. The stagnant nature of CO2 manufacturing facilities has led to declined production rates. The temporary shutdown of ethyl alcohol manufacturing facilities resulted in a dip in the availability of CO2 globally. According to the Renewable Fuels Association, ethanol production and consumption in April 2020 declined by 40% compared to the same month over the last few years. However, shifts in the focus of governments towards healthcare facilities during the pandemic support the market's growth. Furthermore, the global need for vaccines is projected to propel the demand for dry ice use during transportation and storage.
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Adoption of CCS Technology for CO2 Procurement to Encourage Market Growth
Carbon Capture and Storage (CCS) is a technology used to capture CO2 emissions produced from burning fossil fuels for electricity generation, cement manufacturing, and biomass power plants, thereby preventing this gas from entering the atmosphere. This captured carbon dioxide is suitable for enhanced oil recovery applications in the oil & gas industry. Although CCS is an expensive technology, it helps minimize the environmental impact caused by emissions. This factor makes it a beneficial technology and will increase its implementation across the globe during the forecast period. Furthermore, in August 2021, the United States Department of Energy announced the funding of USD 24 million for nine research projects to explore and develop new technologies for capturing carbon emissions directly from the air. This investment is estimated to encourage market growth.
Increasing Use in Medical and Food & Beverage Industries to Drive Progression of Market
Carbon dioxide is used as an insufflation gas in several applications in the medical industry, including minimally invasive surgery to stabilize body cavities, cryotherapy, and respiratory stimulation. The gas is also used for tissue freezing and tooth sensitivity assessment. The extensive use of CO2 in the rapidly growing medical industry is expected to drive the market. Moreover, it is also used by the food & beverage industry. Carbonation of beverages is done by food-grade of the gas, and for freezing of meat & poultry. However, industrial-grade gas is used in other food products. The rising demand from packaged food & beverage producers will boost the growth of the market.
Transportation Concerns Related to Carbon Dioxide to Impede Market Progress
A critical challenge hampering the market's growth is the concerns related to the transportation of carbon dioxide. Pipelines are widely used to transport gas. However, the lack of standards for pipeline quality authentication will hinder market growth. Transporting CO2 involves high maintenance costs and the risk of leaking into the atmosphere, which, in turn, hinders the market's growth. Additionally, protocols such as the Kyoto Protocol, which commits the involved countries to limit the emission of greenhouse gases, will also be responsible for the decline in the market growth.
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Food & Beverage Segment to Continue Strong Growth during Forecast Period
Based on the end-use industry, the market is fragmented into food & beverage, oil & gas, metal fabrication, medical, and others.
Amongst these segments, food & beverage accounts for the major share of the carbon dioxide market. In the food & beverage industry, CO2 is used to carbonate drinks, freeze poultry and food products, and control pH levels. Changing lifestyle choices has increased the demand for ready-to-make and frozen foods, thereby increasing carbon dioxide consumption. Additionally, the exponentially increasing population has propelled the demand for food and beverage products, which will support the market's growth. The growth of the medical segment is associated with the development of advanced surgical procedures such as endoscopy and laparoscopy. In addition, the rising need for vaccines globally will propel the consumption of dry ice.
Furthermore, the oil & gas segment is witnessing growth in carbon dioxide demand due to its use as a solvent for oil recovery. This gas is used as a supercritical solvent for enhanced oil recovery and can increase oil output by 15%-20%. The demand for this gas increases the fabrication of metals, as it is used to protect the molten metal from atmospheric contamination during welding processes. The gas is also used as a cooling agent during electric arc welding. Hence, the rising metal fabrication industry would drive the demand for CO2.
Asia Pacific Carbon Dioxide Market Size, 2020 (USD Billion)
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The market size in Asia Pacific stood at USD 3.80 Billion in 2020. Asia Pacific is the largest and fastest-growing region owing to high demand from food & beverage and medical industries. China is the largest contributor to the demand for carbon dioxide due to the country being a manufacturing hub for several industries, which shall further drive the market's growth in this region. Moreover, the market growth in India is linked to the boost in consumption of beverages owing to the growing population and rising disposable income.
The market in North America is characterized by a rise in demand for oil recovery applications, thereby promoting the use in the region.
The market in Europe is to be governed by the gas usage for carbonation of alcoholic and non-alcoholic beverages in the food & beverage industry.
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The market in Latin America and the Middle East & Africa is expected to experience substantial growth during the forecast period. The rising oil & gas exploration activities and the advancement of oil recovery technologies consuming carbon dioxide will increase its demand. Therefore, the market in these regions will witness growth during the forecast period.
Key Players Blending Organic and Inorganic Growth Strategies to Maintain Their Dominance in Market
The competitive landscape of the market depicts a consolidated and competitive market. Global players in the market have heavily invested in the research and development of better technologies to improve product output. Superior operational efficiency and novel technology development are the strategies used by the market leaders for their growth. Additionally, major players are focusing on acquisition and expansion activities to increase their market share.
An Infographic Representation of Carbon Dioxide Market
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The carbon dioxide market research report provides a detailed analysis of the market and focuses on key aspects such as leading companies, product types, and leading end-use industries. Besides this, the report offers insights into the market trends and highlights key industry developments. In addition to the aforementioned factors, the report encompasses several factors that have contributed to the growth of the market over recent years.
Value (USD Billion); Volume (Million Ton)
By End-Use Industry, and By Geography
By End-Use Industry
Fortune Business Insights says that the global market size was USD 10.36 billion in 2020 and is projected to reach USD 13.65 billion by 2028.
In 2020, the market value stood at USD 10.36 billion.
Growing at a CAGR of 3.6%, the market will exhibit steady growth in the forecast period (2021-2028).
The food & beverage segment is expected to be the leading end-use industry in this market.
Increasing use in the medical industry is the key factor driving the market.
Linde plc, Air Products and Chemicals, Inc., and Air Liquide are the top players in the market.
Asia Pacific held the highest market share in 2020.
Rising demand from the oil & gas and food & beverage industries supports product adoption.
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