The North American merchant carbon dioxide (CO2) market was under scrutiny last week as industry gathered in New Orleans for gasworld’s annual CO2 Summit.
Amidst the pointed headlines and mounting calls to action, a number of underlying sector indicators were evident – insights which tell almost as powerful story as any market report.
Here’s my 10 takeaways to watch from up and down the CO2 value chain.
- The merchant CO2 market is still as fragile as ever…
Three source closures in California in just nine months. As much as 40% of CO2 supply in the US down at some point this summer. A supply position described as ‘severe’ in the past 30 days by one analyst.
Despite all of these red flags, the merchant CO2 business in the US has so far managed to avoid significant shortages for at least a second successive year. Mitigation measures have proven to be effective.
It would be easy to be lulled into a false sense of security. But it’s clear that the same fault lines sit beneath the surface of the supply chain. A sense of frustration was palpable among many speakers as they discussed the market state-of-play. One analyst described the “surprisingly few new CO2 sources” entering the market, particularly in the last 12 months, while another noted that as many as five new 300 tonnes per day (tpd) plants would need to be built and on-stream by 2031 to meet expected demand.
Perhaps that equivalent capacity will be derived from alternative sources, but it seems a tall order on the evidence presented this week.
Merchant new-builds are limited despite the demand outlook. Contamination issues are troubling some existing sources. And headwinds are blowing in from the edges of alternative pathways.
- ….and industry knows it
Though there are surprising few new sources, that doesn’t actually seem to be a surprise to anyone in the room in New Orleans this week.
The story of ongoing structural fragility was not just the preserve of the experts on the stage. It was the knowing, wry smile in some conversations during networking breaks, and the rueful assessment of others over dinner tables. There is considerable work to do to reinforce the supply chain across North America – and arguably even more forces at play beyond the industry’s control.
Political plays, carbon credits, chaotic CDR markets, a diluted investment field in new technologies. All are stifling progress in a myriad of complex, interconnecting ways. And the market knows it.
Live polling during the event captured that sentiment in the room.
We asked how confident attendees were in the current capability to meet CO2 demand in North America. As many as 42% of participants said they were not very confident; a further 18% said they were not confident at all.
We also asked for the sense of confidence over the next 12 months. Again, 39% said they were not very confident, while 9% expressed no confidence at all – indicating little expectations of any material change in the supply chain for another year, at least.
This was a focused, senior-level cross-section of the CO2 community in North America essentially saying, we know where the problems are and we don’t see them disappearing anytime soon.
- Benzene contamination issues are real… and growing
Benzene issues are “rippling into the downstream,” we heard. Not for the first time, but perhaps concerningly so.
Benzene contamination at the Jackson Dome – one of the most prominent CO2 sources in the US – also contributed to widespread US CO2 supply disruption in 2022.
It became known in late August (2026) that benzene was again causing quality issues as brewers and analysts alike revealed in a gasworld webinar that quality issues at Jackson Dome in Mississippi were impacting supply, with force majeure declarations in effect and several plants offline.
Benzene is a volatile organic compound and known carcinogen, with its presence in raw CO2 potentially preventing the gas from meeting specifications required for food and beverage applications.
The fact that it is contaminating the Jackson Dome is troublesome. The dome is an important source of CO2 for the Gulf Coast, supplying raw CO2 to downstream purification and distribution operations serving the merchant market. Any disruption naturally has a significant impact on the supply chain.
Further still, gasworld understands that as the affected wells are drawn down, benzene levels are continuing to rise – requiring plants to change their filter beds more frequently and adding to operating costs.
The question is, how long could this be expected to endure? One conversation I had on the eve of the event indicated this could be a problem, a story, that runs for some time to come yet.
The next logical question would be, can we expect to see more such issues in future? No-one has a crystal ball, but few people probably saw benzene contamination being an issue at least twice in four years.
Lastly, if we’re in pursuit of alternative sources for CO2, should we expect to see even more contamination of feedstocks and product emerging? Possibly. Maybe not benzene, but perhaps another unforeseen impurity.
Interestingly, the ‘what if’ of another speaker immersed in the science of purity, quality control and safety was, what if I told you, you can go on vacation or go to bed at night and not worry about gas contamination?
That sentiment pointed to the criticality of purity, proactive management and standards – and how prevalent the contamination issues are across the CO2 production and usage landscape.
- Demand erosion is a thing
We heard that we could expect US CO2 demand to grow at circa 2% per year through to 2031, and that a further five 300 tpd merchant CO2 plants, for example, would be required to service such demand levels.
The precursor to those projections, however, was that demand had only risen by 0.2% each year on average across the past decade. When we boil that down, it’s actually tantamount to demand erosion. Whilst cautious to play that down, the same analyst did acknowledge those exact words: demand erosion.
My own feeling is, we’d be wise not to play this down too confidently. As I wrote in my column earlier this week, it was evident that the market still faces far too many ‘what if’ scenarios. That points to the ongoing uncertainty in the market and I’ve been left wondering if the sector has really moved forward that much at all since we began hosting CO2 Summits in the US in 2022 and further back in Europe in 2016.
I’ve heard so many of the same narratives and projections so many times before through the years. I fear we’ll continue to see and them for a while. We must also not forget that a CO2 plant construction is no quick fix – these are complex, capital intensive and long-term construction and engineering projects. The track record suggests we don’t see them coming on-stream at a particular cadence.
And whatever the reason, if there’s any kind of collective inertia holding back these mission-critical CO2 plants and sources, if that inertia does persist, then that will start to bite with demand profiles at some point.
This was the subject of the in Q3 2025, examining demand erosion and the silent substitutes emerging in the CO2 business at that time.
It found even then, 12 months ago, that a significant cross-section of the industrial gas industry sees a risk of carbon dioxide supply becoming too stretched over the next decade, as demand arising from new uses grows and supply is squeezed.
A combined 49% of gasworld poll respondents had suggested that a need to find substitutes for some applications was either ‘likely’ or a risk, depending in part on shifting economics and policy changes. Only 22% of voters dismissed the notion of alternatives being needed in the next five to 10 years.
The report assessed the displacement risk facing merchant CO2 demand and the impact of demand shifts for industrial gas producers and suppliers, as well as infrastructure investors. Analysis identified key risks in different markets, including the use of liquid nitrogen for certain types of cryogenic cooling, for example.
- There are 142 DAC companies and counting – and no-one really knows who or what to horse to back
As one direct air capture (DAC) innovator on stage acknowledged, they are one of 142 DAC companies (and counting) out there in the market at present – a staggering number of mostly start-up technologists in an as-yet unproven or immature space.
We’ve welcomed more than a handful of those credible innovators to the gasworld stage across Europe and North America through the years, in fact there were two different players represented at this Summit in New Orleans, and all have had a compelling story to listen to.
We’ve heard some brilliant insights across continents and variations of the pathways.
The emerging challenge, however, is knowing which of those pathways to back and who is best placed to capture the opportunities in carbon management and CO2 utilisation. I’d imagine most people in the room have been left scratching their heads with that conundrum at different times. The gold rush in DAC – and arguably a dilution of the investment potential as a result – leaves more questions than answers.
- The wider carbon removals market is chaotic and stalling
“Quite chaotic to engage in” and a “dense, interconnected web of an ecosystem.” That’s one way to describe the current CDR (carbon dioxide removals) market. And it’s the way we heard it framed last week, from someone deep in the heart of this sector.
There are durable pathways (think DAC, carbonated building materials and biochar for example) and there are non-durable pathways such as reforestation and soil organic matter. Ultimately, however, the infrastructure to make carbon removal bankable is still not there and one could be forgiven for thinking this whole space is just as confusing as the DAC market.
Or as our speaker candidly explained, there are “so many intermediaries and no common infrastructure” which means that as thing stand, it’s going to be a struggle to move the CDR market forward as a result.
- Biogas / RNG is the low-hanging fruit in alternative CO2…
There seems little doubt now, on both sides of The Atlantic, that biogas or RNG (renewable natural gas) is the most compelling and more immediately available alternative in CO2 sourcing.
This is a sentiment that’s trended across gasworld’s European and North American CO2 Summits for several years now – not just in the insights emanating from those events, but the audience mood too. Biogas has been the clear and consistent frontrunner in gasworld audience polling on both continents.
That was again the case in New Orleans last week, especially with the Opening Keynote talk from Erica Chase, President of CleanCycle Carbon.
The company has doubled down on its commitment to RNG and beverage-grade CO2 in the last two years in particular, with the Lewiston, North Carolina project a proven commercial case in action and scores of other potential projects in its sights – despite the political headwinds the sector has faced.
Further still, parent group EFI has reinforced its ambitions in this area in 2026, acquiring EC Applications and not only doubling its size overnight but also bringing more landfill infrastructure into the group, too.
What the biogas-to-CO2 space needs now is calm and clarity in the arena of RNG credits and pricing, which has paused capital of late across the board.
- …and there are lighthouse projects and learnings documented
The Lewiston project from CleanCycle Carbon is a beacon for future RNG projects in the US and North America – and Chase told us why.
This is a facility that is producing ISBT beverage-grade CO2 from biogas, is an FDA-registered facility, and made its first beverage-grade delivery in December 2024. If there was a playbook for successful, proven, commercial CO2 from biogas in the US, this might just be it.
Further still, the company is now actively learning from the project and documenting it. It’s had an ASTG analyser installed since November 2025 and in Chase’s own words, they are no longer estimating the plant’s performance but measuring it. That’s a key distinction.
Nameplate capacity is not throughout capacity. Seasonal swings are real. And the feedstock controls everything downstream. These are just some of the documented learnings to take forward.
And as Chase enthused, “Operating data trumps theoretical data.”
- There are too many “what ifs” in the market
It was evident that the market still faces far too many ‘what if’ scenarios.
That points to the ongoing uncertainty in the market and from over the fence, outside of the merchant CO2 industry itself. The landscape surrounding carbon dioxide sourcing, capture, production and use remains as complex as ever.
Perhaps that’s the biggest ‘what if’ of all – what if we could get past the deadlock and actually see anywhere near the required capacities coming into the market and on-stream anytime soon?
Or viewed another way, what if North America’s CO2 sourcing inertia persists?
However you look at it, there are far too many unanswered questions, too many uncertainties, and too many unopened windows of opportunity.
- Uncertainty is everywhere – no-one knows what happens next
The biggest takeaway comes back to the aforementioned uncertainty and perceived inertia in the merchant carbon dioxide market.
No-one seems to have any degree of confidence that the projected new-build capacity will enter the market as required, nor that the seemingly bountiful opportunities in carbon capture will actually be realised.
After a week of discussion, debate, case studies and candid views, that is arguably the most telling and damning takeaway of all.
