The US Carbon Dioxide (CO2) merchant market, fundamental to the industrial gas business, is served by a complex supply chain.
Some companies within the industry are fully integrated in the CO2 supply chain as they produce the crude, purify it to liquid, and distribute to distributors and end-users. There are some companies that are strictly CO2 distributors. As a product, CO2 is delivered in several forms including as crude, gaseous, compressed liquid, and solid (ice), and is transferred via pipeline, bulk and micro-bulk trucks, cylinders, and as dry ice. There are many different sources of CO2, but it is primarily sourced from ethanol (fermentation), natural CO2 wells, ammonia, and hydrogen. It can also be captured from the gas streams emitted by power plants.
Over the past decade, crude sourcing has experienced a major shift toward ethanol and wells/EOR (Enhanced Oil Recovery) and away from ammonia and H2 based sources, as shown in Figure 1. Currently, 2015 US nameplate (NP) CO2 capacity is estimated at 35.3 thousand tons per day (ktpd), an increase of 1.5 percent per year over the past eight years. This lower capacity growth is not keeping up with CO2 demand which is growing closer to 2-4 percent per year, higher than US gross domestic product. End-users experienced this issue first-hand this past summer when supply was tight and prices increased. Players need to strategically plan for future sources of CO2 to alleviate tight supply and to support future growth.
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