The South America carbon dioxide market , valued at USD 1,705.99 million in 2023, is projected to expand at a Compound Annual Growth Rate (CAGR) of 4.1% over the forecast period. This growth is underpinned by increasing applications across industries such as food and beverage, healthcare, chemical processing, enhanced oil recovery, and carbon capture and storage (CCS). The market is also seeing a gradual transition toward sustainable practices, particularly with rising awareness around environmental preservation and the role of CO₂ in both contributing to and mitigating climate change.
As South America intensifies its focus on industrialization and energy development, the strategic utilization of carbon dioxide in multiple sectors is set to play a vital role in shaping the regional economy. However, regulatory concerns, storage and transportation challenges, and high production costs continue to pose obstacles for market participants.
Key Market Growth Drivers
1. Booming Food and Beverage Industry
One of the most significant contributors to the carbon dioxide market in South America is the food and beverage industry. CO₂ is extensively used in carbonating soft drinks and alcoholic beverages, extending shelf life through modified atmosphere packaging (MAP), and preserving perishable food products. Countries such as Brazil, Argentina, and Chile are witnessing growing consumer demand for processed and packaged foods, driving up the need for food-grade carbon dioxide.
With the rise of health-conscious consumers and a preference for fizzy and functional beverages, beverage manufacturers are scaling up production capacities. Additionally, the growing trend of cold chain logistics in food exports is contributing to increased CO₂ utilization in refrigerated transportation.
2. Demand in Enhanced Oil Recovery (EOR)
Another significant growth driver is the application of carbon dioxide in enhanced oil recovery (EOR). With South America being home to abundant oil reserves, especially in countries like Brazil and Venezuela, CO₂ injection is being used to boost oil production in mature fields. EOR not only improves the efficiency of extraction but also offers a dual benefit of sequestering CO₂ in underground formations, contributing to emission reduction.
As oil-producing nations in the region seek to optimize existing infrastructure while meeting emission targets, CO₂-based EOR technologies are becoming increasingly viable. Investment from both domestic and international oil companies in CCS and EOR integration further supports this trend.
3. Growth in Industrial Gas Applications
Carbon dioxide finds widespread use in various industrial gas applications, ranging from welding and metal fabrication to chemical synthesis and fire extinguishing systems. In manufacturing hubs like São Paulo and Buenos Aires, CO₂ is utilized for dry ice production, pH control in water treatment, and inerting operations in chemical plants.
South America's industrial sector is expanding, driven by foreign direct investments (FDI), growing domestic demand, and favorable government policies. The integration of CO₂-based processes is particularly notable in the steel, pulp and paper, and automotive industries, where gas handling systems are evolving to meet efficiency and environmental standards.
4. Carbon Capture and Storage Initiatives
With climate change becoming a central policy focus, carbon capture and storage (CCS) is gaining momentum across South America. Although still at a nascent stage, several countries are exploring CCS technologies to reduce carbon footprints and comply with international agreements such as the Paris Accord.
Pilot projects in Brazil and Argentina are examining the viability of large-scale CCS deployment, especially in conjunction with power plants and industrial manufacturing units. As regulatory frameworks evolve and technological adoption accelerates, CCS could become a long-term driver of carbon dioxide demand, albeit indirectly.
Market Challenges
1. High Storage and Transportation Costs
Transporting and storing carbon dioxide, especially in its liquid or solid forms, requires specialized infrastructure, including insulated tanks, pipelines, and pressurized containers. Many regions in South America, particularly remote and underdeveloped areas, lack adequate logistics infrastructure. This increases the cost of CO₂ handling and restricts access for smaller industries.
Moreover, the capital-intensive nature of cryogenic storage facilities often deters new entrants from entering the market. Consequently, large players with vertically integrated supply chains dominate, limiting competition and price flexibility.
2. Regulatory and Environmental Concerns
While CO₂ has beneficial industrial uses, it remains a greenhouse gas, and its overproduction raises environmental concerns. Governments across South America are increasingly tightening regulations related to emissions, carbon trading, and industrial safety, requiring companies to invest in emission control technologies and compliance monitoring.
Moreover, public perception of carbon dioxide as a pollutant often overshadows its industrial utility, necessitating better communication and education from industry players to promote its responsible use.
3. Dependency on Industrial Activity
The carbon dioxide market is highly sensitive to economic and industrial cycles. Any downturn in manufacturing, oil production, or food and beverage output can significantly impact CO₂ demand. Events such as political instability, inflation, or supply chain disruptions—as witnessed during the COVID-19 pandemic—can trigger demand contraction, particularly in countries like Argentina and Venezuela.
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https://www.polarismarketresearch.com/industry-analysis/south-america-carbon-dioxide-market
Regional Analysis
Brazil: A Regional Powerhouse
Brazil dominates the South America carbon dioxide market owing to its massive industrial base, thriving beverage sector, and oil exploration activities. Cities like São Paulo and Rio de Janeiro serve as industrial and logistical hubs, facilitating the widespread use of CO₂ across applications. Additionally, Brazil is at the forefront of developing CCS pilot projects and investing in EOR programs in its offshore oil fields.
Argentina and Chile: Emerging Markets
Argentina’s food processing and chemical manufacturing sectors are witnessing a steady uptick, bolstering demand for food-grade and industrial CO₂. Similarly, Chile, with its growing mining industry and environmental focus, is exploring sustainable uses of CO₂ in mineral processing and energy storage.
Venezuela and Colombia: Resource-Rich but Challenged
While Venezuela has vast oil reserves, ongoing economic challenges and political instability hinder the expansion of its carbon dioxide market. Colombia, on the other hand, is seeing moderate growth driven by the beverage and agricultural export sectors, although infrastructure remains a constraint.
Key Companies in the South America Carbon Dioxide Market
Several global and regional players are active in the South America carbon dioxide market. These companies are engaged in the production, purification, transportation, and application of CO₂ across various industries.
1. Linde plc
Linde is a global leader in industrial gases and maintains a strong presence in South America, offering a wide range of carbon dioxide solutions tailored for food processing, oil recovery, and metal fabrication.
2. Air Liquide S.A.
Air Liquide operates extensively in Brazil and Argentina, supplying high-purity CO₂ for healthcare, environmental, and industrial applications. The company has invested in localized production facilities to reduce dependency on imports.
3. Praxair (a Linde Company)
Praxair, which merged with Linde, is deeply embedded in South American markets and provides carbon dioxide for enhanced oil recovery and beverage carbonation. It operates several CO₂ plants and distribution centers across Brazil and Chile.
4. SOL Group
Although more prominent in Europe, the SOL Group has expanded its footprint in South America, focusing on specialty gas applications including carbon dioxide for environmental management and water treatment.
5. Gaseosas del Atlántico S.A.
This regional player caters primarily to the beverage and food preservation sectors in Colombia and northern South America. The company specializes in small-scale CO₂ delivery and has developed strategic partnerships with local bottling companies.
Conclusion
The South America carbon dioxide market is on a steady growth trajectory, driven by rising demand from the food and beverage, energy, and industrial gas sectors. The region's rich natural resources, coupled with evolving industrial ecosystems, create a fertile ground for market expansion. However, infrastructure challenges, regulatory complexities, and economic instability in certain countries may hinder optimal growth.
As global and regional companies continue to invest in sustainable carbon dioxide production and applications—particularly in carbon capture and storage and enhanced oil recovery—the market is likely to become more integrated and innovation-driven over the coming decade.
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