Exclusive
Demand for carbon dioxide (CO2) in industrial applications appears to be growing globally at an exponential rate, a trend likely to continue as the developing world moves forward.

Increase in demand should also be expected in line with industry growth, warns leading CO2 consultant Sam A. Rushing, President of Advanced Cryogenics Ltd in the US.

The supply and demand equation is believed to have reached something of an imbalance across certain regions of the world this year.

Erratic power supply in South Africa is thought to have harmed production, with the country largely dependent on import supply. The UK and Ireland were also thought to have been under tight supply throughout 2007. Meanwhile in Australia, an explosion at BOC Gases Australia’s Apache plant forced production to cease and a tight supply situation hit the local market.

While supply may have been tight in some countries, demand has continued to escalate.

Rapidly developing world
The gas’ functionality in a number of thriving industries, coupled with the requirements of the rapidly developing world, is largely attributable to such demand, according to Rushing.

“Demand is growing via introduction into markets which never had the product, such as the developing world; as the developing world moves forward the pace of CO2 growth and new applications in otherwise virgin markets will appear,” Rushing exclusively told gasworld.

“Further, growth is a function of growth along with the sector served, such as prepared frozen foods.”

“Also environmentally friendly applications, such as CO2 in water, possible use in biodegradable plastics, and the rapid expansion of CO2 in service of enhanced oil recovery and gas well stimulation. All of these factors, for example, are part of the reason,” he explained.

With CO2 in such demand and of varying levels of supply availability, a competitive if not challenging market appears to be shaping-up. This could be intensified further as particular applications maintain healthy expansion.

Rushing reflected, “Certain applications will continue to expand, such as more environmentally friendly services like blast cleaning, carbonic acid, solvent use in dry cleaning and usage in biodegradable product manufacturing. And as oil and gas grow, CO2 use will grow as well.”

Production will inevitably have to be ramped-up to cope with the ever-increasing demand. Suggesting this to experienced CO2 expert Rushing, gasworld understands that strategically located production facilities could be expected to emerge in 2009 and beyond. We also conclude that a more price-competitive market could now be looming.

“More facilities will emerge in strategically specific regions in the developed world, however, probably more such plants of a smaller scale in the developing world. The market will seek more price increases in some regions. If new applications take off, this could change this picture somewhat; in terms of bringing on more production and perhaps the posture of competitiveness,” Rushing said.

Positive perception
Although CO2 has a largely negative public image and is often in the headlines for all the wrong reasons, the multi-functional gas actually provides many positive services. Hence, its source of increasing demand.

CO2 is fundamental in delivering many of the markets food products to our tables, while use as a solvent in dry cleaning applications and its role in environmentally friendly water treatment services are just some examples. Dry ice ‘blast cleaning’ as opposed to sand blasting is another example, eliminating the use of petroleum-based solvents and mineral acids.

In terms of water treatment, CO2 is common in municipal water and waste water plants and in Beijing, China, a number of water treatment schemes were in place prior to this year’s controversial Olympic Games.

Indeed, it’s in China that the latest apprehension over supply has emerged. In Shanghai alone, consumption is thought to now amount to upwards of 500,000 tonnes per year (tpy) – a requirement causing concern for supply shortfall.

Iwatani International Corporation is constructing a new CO2 plant in the area, its second such facility, to meet demand, but the perceived shortfall is likely to leave the company considering a third plant too.

Such dynamics in Shanghai’s CO2 market are derived from the region’s increasing growth as a manufacturing base, in Rushing’s view.

“Shanghai should be experiencing growth as function of its manufacturing base and specifically, applications which cater to these demands. If this supply in Shanghai is to be cost competitive, then local supplies from by-product sources will be the key - by-product from the so-called lowest cost and highest in raw purity composition (ammonia, reformer/refineries, and fermentation) would be the best answer.”

“If China takes off with ethanol as other markets have, this could be the answer to all supply needs. If not, and if flue gas recovery methods become more competitive or subsidised, then so many of the power plants and such sources could fill the gap.”

Understand more about the CO2 market and industrial applications through Sam A. Rushing’s esteemed series of article in gasworld magazine, including CO2 from an environmental perspective, CO2 applications in the electronics and food industry, and many more.