We’re living in the midst of a climate crisis caused by an excess of carbon dioxide in the atmosphere. So it might come as a surprise to hear that global CO₂ shortages are becoming more frequent — and the consequences are serious.
Every year, around 230 million tonnes of CO₂ are used across industries, with this figure set to grow in the coming decades. From preserving food, to making fizzy drinks, to purifying water, CO₂ plays a vital, often invisible, role in daily life. Yet the current CO₂ market is far from reliable, putting a growing number of businesses in a tricky spot.
So where does our CO₂ supply actually come from — and why is it running dry?
What’s causing CO₂ shortages and who’s affected?
Most of the CO₂ used across industries today isn’t supplied as a standalone product. Instead, it’s collected as a by-product from other industries — most commonly ammonia and ethanol production. In 2022, a huge 46% of the UK’s CO₂ supply came from ammonia production alone.
This creates two major problems:
- CO₂ availability depends on demand for the primary product — not for CO₂ itself.
- If these facilities shut down, even temporarily, CO₂ supply can vanish overnight.
In 2021, when the UK faced a severe CO₂ shortage, the government stepped in to prop up ammonia plants and secure supply. But just a year later, with ammonia’s fossil footprint under fire, that support was withdrawn — and the cost of CO₂ production shifted to end users. The result? A truckload of CO₂ that cost £5,000 in 2021, soared to £75,000 in 2022. Many other CO₂ sources are seasonal or vulnerable to disruption, like ethanol and fertiliser plants, which often shut down over the warmer months for maintenance.
To add further pressure to the mix, demand for CO₂ is growing. With tax incentives like the US’s 45Q, more CO₂ is being diverted away from established markets and into long-term geological storage. One major project underway in the US Midwest is already contracted to capture and store emissions from 57 ethanol plants. Whilst this is great for the planet, an alternative source of sustainable CO₂ is desperately needed.
Cracks in the supply chain are showing, with CO₂ shortages cropping up around the world:
UK, 2018 – A “perfect storm”. Fertiliser plant shutdowns, a heatwave, and World Cup-driven demand led to mass shortages. Beer and cider were rationed, Coca-Cola paused production, and Warburtons halted crumpet manufacturing.
US, 2022 – Contamination at the Jackson Dome natural CO₂ site exacerbated a tight market. CO₂-dependent sectors saw costs rise or operations paused — including the closure of public swimming pools that couldn’t maintain safe water acidity.
Russia, 2022 – Fertiliser exports fell due to sanctions, cutting CO₂ supply by 10–15%. Soft drink companies had to halt production.
New Zealand, 2023 – The closure of its sole food-grade CO₂ facility left supermarkets with empty shelves and CO₂ reserved for critical uses like water treatment.
Australia and New Zealand, 2024 – Global freight issues delayed CO₂ imports, causing supply to tighten again.
These aren’t isolated incidents; they are symptoms of a fragile system built on an unstable CO₂ supply chain. Some estimates suggest merchant CO₂ supply could fall by 33% in the next decade, whilst demand continues to grow at around 2% per year.
The impact of CO₂ shortages
It’s not just fizzy drinks and crumpets at stake. The impact of a CO₂ shortage can ripple across entire supply chains, causing issues with food preservation, transportation, and water purification. Even when CO₂ is a small part of a product’s lifecycle, its absence can grind operations to a halt.
While some industries have experimented with short-term workarounds to CO₂ shortages — like swapping out the CO₂ in food preservation for nitrogen, or reducing the carbonation of drinks — these aren’t effective or long-term fixes.
Being locked into a broken CO₂ supply chain has tangible effects:
- Unreliable supply: Most CO₂ is a by-product, so availability is unpredictable.
🚨Impact: Operations can halt without warning; commercial contracts are put at risk.
- Volatile pricing: CO₂ prices are tied to fossil fuel markets and reactive policy.
🚨Impact: Hard to budget, plan, or stay profitable. Price spikes are often passed on to customers.
- Limited competition: In most regions, just a handful of suppliers are available.
🚨Impact: CO₂ users have few supply options.
- Geographic restrictions: CO₂ is expensive to transport, tying buyers to local sources.
🚨Impact: Supply chains become less resilient and harder to decarbonise.
- Poor scalability: CO₂ supply can’t grow fast enough to meet rising demand.
🚨Impact: New industries and technologies requiring large volumes of CO₂ are held back.
- Competition with carbon storage: permanent CO₂ removal is being incentivised.
🚨Impact: Less CO₂ available for industry, and more expensive when it is. We should be able to replace fossil CO₂ with a more sustainable source alongside carbon removals.
How DAC protects businesses against CO₂ shortages
Unlike traditional commodity sources, direct air capture pulls CO₂ straight from the atmosphere — meaning CO₂ is no longer a by-product, but the main output.
Connecting existing processes to a DAC CO₂ supply means:
- Supply certainty: A steady stream of CO₂ wherever it’s needed
- Price stability: Avoiding price spikes tied to by-product markets
- On-demand CO₂: Matching CO₂ production to business needs
- Lower emissions: Switching to a fossil-free, sustainable CO₂ source
DAC CO₂ is an excellent companion to projects already using biogenic or fossil CO₂ to increase supply resilience, but can also be used as a standalone source where traditional supply isn’t feasible — helping unlock entirely new markets for CO₂ users.
Early DAC projects are already supplying high-purity CO₂ to industry and scaling rapidly to support both commercial operations and climate goals.
You might be wondering: why can’t we just capture carbon directly from fossil sources to prevent CO₂ shortages? While direct air capture and point-source carbon capture are often grouped together, they serve very different purposes. Capturing fossil CO₂ still means introducing new emissions into the atmosphere — and using it as a feedstock often requires extra purification, adding cost without delivering real climate benefits.
Learn more: What sets DAC apart from CCS technology?
Fixing CO₂ shortages for good
Today’s CO₂ supply chain is fragile, centralised, and unpredictable. It simply wasn’t designed for the industries that currently depend on it.
Direct air capture technology offers an alternative: a CO₂ supply that’s reliable, low-carbon, and fit for the future. As demand rises and legacy systems falter, DAC CO₂ can help businesses take control — decoupling operations from fossil carbon and building supply chains that are as resilient as they are sustainable.
Learn more: Sustainable CO₂: What it is, where it comes from, what it means for the climate
