US CO2 shortage: One year on

This time last year, US businesses were being impacted by carbon dioxide (CO2) shortages. Plant closures, paired with contaminated supply and increased demand, each played a part in the struggles that are still remembered by industry players today.

One of the first companies to publicly raise its concerns surrounding CO2 was Everett, Massachusetts-based Night Shift Brewing, which said its supply had been cut for the foreseeable future. This story, or similar, was shortly after told by many other end-users of CO2 across the market.

Read more: US CO2 shortage: Strains set to continue throughout the coming months

CO2 is widely used in the food and beverage industry as a refrigerant and is also used in Modified Atmosphere Packaging (MAP) to improve shelf life and in carbonating drinks. Dry ice (solid CO2) has increasingly been used to keep food frozen during home delivery, a trend that boomed during the coronavirus pandemic.

As highlighted in gasworld’s 2023 merchant CO2 report, food and beverages comprises 70% of the higher purity merchant CO2 supply in the US. In the past decade, the use of CO2 has been in decline as consumers move away from high-sugar carbonated sodas to lighter, non-carbonated beverages. However, CO2 use in carbonation for seltzers and microbreweries has brought this segment back and it is steadily growing.

Read more: The 2023 US merchant CO2 report

And as more and more breweries, and companies alike, were sharing their struggles, gasworld looked into the cause of the shortages. Gas contamination was believed to be a leading factor that has led to the short supply, something that was by no means common.

As highlighted by Sam Rushing, President of Advanced Cryogenics, CO2 firms operating in liquefaction and purification had been faced with a contaminated product and could not fully operate. gasworld understood that the Jackson Dome was where such contamination had been found.

Located in the state of Mississippi, the Jackson Dome is owned by independent energy company Denbury, following an acquisition carried out in February 2001. The Jackson Dome is Denbury’s primary Gulf Coast CO2 source and covers approximately 200 square miles. gasworld understood that the contamination occurred when Denbury decided to use its existing CO2 supplies for enhanced oil recovery and drill additional wells to feed its CO2 pipeline that supplies merchant CO2 plants.

Rising oil and gas prices made utilising the CO2 for EOR more attractive. Unfortunately, the additional wells came with contaminants. gasworld was told that hydrocarbons, including benzene, impacted the purity of the CO2 as not all suppliers were able to filter out the impurities, so supplies were reduced.

Some plants in the region had to undergo a sufficient front end clean-up to cope with the contaminants, but other, older plants were struggling and could therefore not achieve or guarantee the International Society of Beverage Technologists’ (ISBT) CO2 purity standards.

Read more: Benzine and its impact of the US CO2 market

Alongside the contamination, planned plant closures added additional strain. Ammonia plant closures due to scheduled maintenance occur every year after the fertilizer season, so it is well known to the industry for planning purposes. However, paired with the Denbury challenges, things were more difficult than in prior years.

Ammonia production is a key sourcing route for CO2 production. In fact, ammonia plants have traditionally been one large source of food-grade CO2 and while in the past decade other sources of CO2 have been invested in, including those raw gas streams from chemical operations and bioethanol plants, ammonia remains one of the largest sources.

Any shutdown in ammonia/fertiliser plants for an extended period naturally has an impact on the CO2 supply chain at some stage. As we have seen many times; CO2 shortages are almost an annual occurrence, as anyone in the industry knows.

Ammonia is a seasonal feedstock, with the peak production output for fertilisers generally from August to March, or during the winter months; hence why fertiliser companies often plan maintenance or shutdowns from April through to July.

Read more: More plant closures set to impact supply in coming weeks

The importance of CO2 for medical applications

But strains were felt across the whole market, not just by food and beverage firms. And as Ron Perry, Director of Sales and Marketing at Middlesex Gases, recently told gasworld, the medical market is a crucial end-user of CO2.

“When people look at the global picture, they mention that the majority of the market is for food and beverages, and the rest can often get overlooked,” Perry explains. “I was having a conversation with a CO2 supplier one day and he admitted that he never thought of CO2 and its crucial role in the medical market. They focused mainly on the food and beverage market, but I had to explain that we have to put food and beverage requests on the back burner while we prioritised our life sciences customers.”

He continued, “We have no choice but to prioritise those customers. They have million-dollar research in incubators, and if they go down, they lose all their time, effort, and money, and are back to square one. It can be a life-or-death situation.”

Medical CO2 has several applications. It is used as a pure gas or in specialised mixtures with other gases for stimulating breathing, anaesthesia, and sterilisation of equipment. Medical CO2 can be used as an insufflation gas for minimal invasive surgery, such as laparoscopy, endoscopy, and arthroscopy, to enlarge and stabilise body cavities for better visibility of the surgical field. In its liquid phase, it can be used to provide temperatures down to -76° C, for cryotherapy or for local analgesia.

Lessons learned

One year on, and the landscape is very different. And, as gasworld understands, the market remains steady. But lessons are still being learned from the rollercoaster ride that last year presented to the industry.

Applications are not only emerging and evolving but demanding more of the industry and its sourcing too. That calls for new thinking in CO2 storage and distribution, but it also raises questions over the tracking and management of supply chains. Worse still, does it also leave the door open to end-user shifts away from CO2 in the long-term?

At the same time, decarbonisation policy is impacting upon the business playbook in CO2; carbon capture and utilisation is advancing rapidly as the circular economy takes greater shape.

These are all talking points that will be explored by gasworld and its North American CO2 Summit in Indianapolis on 25th September – 26th September. Last year the shortage was in focus, but this year we look ahead at new opportunities.

The agenda is now full, and our speakers are ready to share their insights with the audience. One of whom, we sat down with ahead of the event: Dr Arthur Rudek, CEO and founder of TREAVES. We asked him what we can expect from his presentation in Indianapolis.

“I would like to show the audience that CO2 is not such a bad molecule. It needs to be handled properly, but there are many ingenious ways to do that,” he told gasworld. “Dry ice products incorporate a lot of opportunities in terms of economics and sustainability. I will give some interesting and exotic examples of how CO2 dry ice can improve hydrogen-based fire-prevention systems and help reduce a hospital’s emissions balance.”

Dr Rudek also told gasworld why he thinks these events are so important. “Personal contact helps to drive business in new directions,” he enthused. “Everything we have achieved so far with TREAVES started with personal contact and every single customer of ours appeared through personal contact. I would say that 98% of our business is driven by some personal interaction beforehand. There is no better way to interact and exchange information, knowledge, and ideas than with representatives from other companies. It happens often that you come home with a bag full of valuable contacts and new project ideas from such an event.”

If you want to secure your ticket to gasworld’s North American CO2 Summit, you must be quick – there are less than 50 tickets left! Secure yours here.