Published April 2015
The carbon dioxide business is traditionally thought of as the recovery and distribution of liquid carbon dioxide, since this is the product most commonly bought and sold. Liquid carbon dioxide is usually recovered as a gaseous by-product of industrial operations, such as hydrogen production by the steam reforming of natural gas or the production of ethanol by fermentation.
China is the major market for carbon dioxide, accounting for almost 34% of global demand in 2014, followed by North America, Other Asia/Oceania, and the Middle East, accounting for about 23%, 16%, and 8%, respectively.
The following pie chart shows world consumption of carbon dioxide:
Looking at the carbon dioxide merchant market only, about half was used for the food and beverage industries in 2014, split almost evenly between the two markets, with use for the beverage market growing at a faster rate than that for food applications. About 15% of merchant carbon dioxide consumption was used for fabricated metal production markets. Various other end-use applications for liquid and solid carbon dioxide accounted for the remaining 34% in 2014. The largest regional merchant markets for liquid and solid carbon dioxide are North America, China, and Western Europe. Together, these three regions accounted for more than two-thirds of the global merchant carbon dioxide consumption in 2014.
China is continuing to emerge as an important player in the global market. For the past few years, the country’s consumption growth has slowed but is expected to continue at a respectable rate of about 4.8% per year during the next five years. Capacity has increased almost threefold in the past decade since China opened its doors to Western enterprises, and is projected to increase at an average rate of about 4.5% per year between 2014 and 2019.
The major issue in the carbon dioxide market is balancing regional supply and demand. Carbon dioxide sources may or may not exist where demand is greatest. In addition, chemical manufacturing operations that produce a gaseous carbon dioxide by-product run according to demand for the primary product, not according to demand for the by-product carbon dioxide. For example, ammonia plants typically run at full capacity in fall and winter, to be ready for spring fertilizer requirements. Carbon dioxide demand, in contrast, tends to be highest during the warm summer months when ammonia plants may be down for turnaround, so supplies are not often balanced with demand. Some of the aging ammonia plants have closed down on the US Gulf Coast and some of them are underutilized, which further tightens supply. Also, the operation of ammonia plants is tied to gas futures, which could affect the functioning of the plant. If delivery contracts have a fixed price over a given timeframe, producers may not be able to continue operating viably if they are unprofitable. The supply from hydrogen plants has also been decreasing in the past few years as stand-alone hydrogen plants are being replaced by pipelined product. The decreasing supply from ammonia and hydrogen plants and a corresponding increase in supply from ethanol plants and natural wells could increase the price of carbon dioxide, mostly due to distribution-related factors, especially in the United States and Western Europe.
Although atmospheric carbon dioxide has been identified as a contributor to global warming, these issues are relevant primarily to the industries that generate and release carbon dioxide to the atmosphere. The companies covered in this report recover and distribute by-product carbon dioxide or naturally occurring carbon dioxide, but do not produce carbon dioxide.
Carbon dioxide gas is generated as a product of animal metabolism and is a vital component of the photosynthetic process; thus, it is of importance in animal and plant life cycles. Carbon dioxide gas also occurs as a product of the combustion or oxidation of all types of carbonaceous materials, a product of any carbonate decomposition, and a product of natural fermentation processes. It occurs underground in some areas as a natural gas, either in highly concentrated form or with other gases in natural gas/hydrocarbon deposits or in mineral springs.
The total global carbon dioxide market is expected to grow annually at 2.6%. The highest growth rates are forecast for Africa at 9.6% per year, followed by Latin America and the Middle East, which are expected to grow at 4–6.5% per year through 2019.