Merchant carbon dioxide (CO2) production will be down in the US in 2025, mostly from plant losses but also the typical sourcing issues encountered every year – normal plant turnarounds that start in March and carry into the summer, when ammonia plants are taken down for maintenance after the growing season. There were new plant additions to limit the fall-off, and the industry managed the supply disruptions so there were no severe shortages. But the new plants brought online did not neutralize the overall loss in product for the year.
By the end of 2025, US nameplate CO2 capacity is estimated at 36.0 thousand tons per day (ktpd) down from 36.7 ktpd in 2024. This is down over last year from the plant closures plus reduced feedstock from some plants. New plants, as mentioned, came online in 2024, with more planned in 2025. However, this capacity growth clearly is not keeping up with CO2 demand, which looks set to continue at about 2% each year. The upshot is that the situation will continue to be balanced, with tight supply regionally whenever there are planned or unplanned plant outages, as well as seasonal demand spikes. In these moments, prices will rise.
The merchant CO2 industry remains threatened by the federal government’s push toward decarbonization using tax credits, which looks set to impact the critical CO2 supply chain to some extent, including important end-use markets like food processing. In response to this threat, the Compressed Gas Association (CGA) established the CO2 Solutions Coalition. There is uncertainty about how the new administration will address the Inflation Reduction Act (IRA) and its impact on tax credits, but some signs indicate that things could tilt to be less skewed in favor of sequestration.
Demand is projected to grow at 2% to 3%, but the industry does not have sufficient new sources coming online to support that growth. Maintaining and improving the current processing system efficiency, investing in recycling systems, or investing in alternative sustainable sources of CO2 are all options that need to be investigated.
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