Carbon Dioxide Supply Chain - Executive Summary
Carbon Dioxide
Direct Use Chemical
co2
(liquified gas)
Inputs to Manufacturing Process:
Byproduct in manufacturing of
Ethanol, Anhydrous Ammonia,
Hydrogen
^ % of Total Domestic Consumption
Attributed to Water Sector:
Less than 10%
Derivative Water Treatment Chemicals: w Mooter
^"° oa(\4e g/>
RISK DRIVERS
Ethanol production is the largest do-
mestic source of purified carbon di-
oxide, followed by production of an-
hydrous ammonia. Reductions in
production of ethanol due to re-
duced demand for transportation
fuels has led to idling or permanent
plant closures, dramatically reducing
availability of purified carbon diox-
ide. Fluctuations in demand for ferti-
lizer may also impact production.
RISK PARAMETERS
Criticality: High. Essential and widely
used for pH adjustment.
Likelihood: High. History of price in-
creases, force majeure, and regional
disruptions in supply that impacted
the water sector.
Vulnerability: Low. Distributed
domestic manufacturing and
supply. Supply output tied to ethanol
production.
MANUFACTURING PROCESS
Water Treatment Applications
Ethanol Production
Anhydrous Ammonia Production
Carbon Dioxide
Hydrogen Production
^Jnput_ _End^Us^]
pH adjustment
Other Applications
• Food production and preservation
• Carbonation of beverages
• Chemical manufacturing
• Enhanced oil recovery
DOMESTIC PRODUCTION AND CONSUMPTION, AND INTERNATIONAL TRADE
Domestic Manufacturing Locations (2021):
75, distributed throughout the U.S.
(^) International Trade (2019)
Primary Trading Partner (Imports): Canada
Primary Trading Partner (Exports): Mexico
Domestic Consumption (2018):
26,574 M kg
¦ Domestic Production (33,657 M kg)
¦ Imports for Consumption (105 M kg)
Export of Domestic Production (7,187 M kg)
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Carbon Dioxide Supply Chain - Full Profile
Product Description
Carbon Dioxide (C02), a naturally occurring component of the atmosphere, is commercially produced primarily
as a co-product of chemical manufacturing, most commonly ethanol and ammonia production. Further
purification steps of recovered carbon dioxide yield a product that is widely used in numerous industries, most
prominently in food and beverage production.
Use in Water Treatment
Carbon dioxide is used in both water and wastewater treatment for pH adjustment (AWWA, 2018).
Use as a Precursor to Other Water Treatment Chemicals
Carbon dioxide is not used to manufacture other water treatment chemicals.
Other Applications
Carbon dioxide is used food production and preservation, carbonation of beverages, chemical manufacturing
(e.g., urea), enhanced oil recovery, pulp and paper processing pH adjustment, medical procedures,
semiconductor manufacturing, animal slaughter, and in greenhouses to stimulate plant growth. Purified carbon
dioxide in the solid state (i.e., dry ice) is used to preserve substances that must be transported and shipped at a
low temperature, including some vaccines (FTC, 2018; NCBI, 2021).
Primary Industrial Consumers
A majority of the purified carbon dioxide produced domestically is used in food preparation and preservation
and carbonation of beverages. Other primary uses include chemical manufacturing, enhanced oil recovery,
metal working, and healthcare (FTC, 2018; NCBI, 2021). The food and beverage sector, which is inclusive of many
uses of carbon dioxide, accounts for approximately 70% of the domestic demand for carbon dioxide supplied as
a byproduct of ethanol production (Rushing, 2020). It is estimated that water treatment applications account for
less than 10% of domestic use.
Manufacturing, Transport, & Storage
Manufacturing Process
Carbon dioxide is produced from naturally-occurring carbon dioxide reservoirs, as a byproduct from the energy
and industrial production processes (e.g., ammonia production, fossil fuel combustion, ethanol production), and
as a byproduct from the production of crude oil and natural gas. Domestic production of carbon dioxide is
largely supplied by recovery of carbon dioxide as a co-product of chemical manufacturing, primarily from
ethanol, ammonia, and hydrogen manufacturing facilities. Fermentation from ethanol plants is the largest single
source of carbon dioxide for the U.S. market, and has historically produced more than half of the carbon dioxide
sold in the domestic market. Ethanol production yields waste gas in excess of 90% carbon dioxide, while the
production of ammonia yields nearly 40% carbon dioxide (State CO2-EOR Deployment Work Group, 2017).
Carbon dioxide is processed to a liquefied gas after distillation of the crude gas using a cryogenic process, often
at facilities located near carbon dioxide sources.
The source of carbon dioxide varies regionally and from country to country, depending on the predominant
industry producing carbon dioxide as a byproduct. This can lead to regional vulnerabilities in supply. Where
carbon dioxide production is heavily reliant on the production of ammonia, there are planned downtimes to
production, with peaks during winter months and a slowdown in the spring. Where carbon dioxide production is
a byproduct of natural gas production, availability of carbon dioxide is tied to fluctuations in natural gas
production (DeCarlo and Marrero, 2018).
EPA 817-F-22-019 | December 2022
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Carbon Dioxide Supply Chain - Full Profile
Product Transport
Carbon dioxide is classified as a hazardous material, which dictates how it can be transported and may add
significant cost to long-distance transport. Liquefaction, which allows for transport of greater volumes of carbon
dioxide, is routinely used for transport by container via truck, barge, rail, and ship. While a pipeline network is
extensive in the Midwest and Western U.S., transport of carbon dioxide in this network is primarily intended for
delivery to enhanced oil recovery projects (FTC, 2018; IPCC, 2005).
Storage and Shelf Life
Carbon dioxide can be pressurized and cooled to a liquified gas and stored in pressure vessels. Small, pressurized
cylinders may be used by smaller water systems, while larger systems may require bulk deliveries. Pressurized
storage vessels should be stored in a cool, dry location away from direct sunlight. When stored properly,
liquified carbon dioxide can have a shelf life of 60 months (Air Products, 2014; Linde, 2021).
Domestic Production & Consumption
Domestic Production
Production data was collected from the 2020 EPA Toxic Substances Control Act (TSCA) Chemical Data Reporting
(CDR) for the year 2018, while trade data was collected from the USITC Dataweb, as shown in Table 1. Both
production and trade data are specific to carbon dioxide.
Table 1. Carbon Dioxide Production and Trade Data Sources
Production and Trade Data
Category
Data Source
Identifier
Description
Domestic Production
2020 TSCA Chemical Data Reporting
CAS No.: 124-38-9
Carbon Dioxide
Imports and Exports
U.S. International Trade Commission
HS Code: 2811.21
Carbon Dioxide
Total U.S. domestic production of carbon dioxide was approximately 33,657 million kilograms (M kg) in 2018
(EPA, 2020). Several significant producers claimed confidential business information and did not offer
production volumes. Independent reporting indicates that annual domestic production capacity may be as high
as 60,000 M kg (Rushing, 2020). It is estimated that in 2018 approximately 30% of reported production volume
was used in captive consumption (EPA, 2020). The top five domestic carbon dioxide suppliers to the commercial
market in 2018 were Linde, Air Liquide, Praxair, Matheson Tri-Gas, and Reliant Holdings. All of these suppliers
operate numerous liquid carbon dioxide production facilities and produce or contract for supply of raw carbon
dioxide. In 2018 Linde had a daily carbon dioxide production capacity of nearly one-quarter of total domestic
capacity (NREL, 2019). The number of domestic manufacturing locations shown in Figure 1 represents operating
facilities as of 2021. Supply of NSF/ANSI Standard 60 certified carbon dioxide for use in drinking water treatment
is widely distributed throughout the U.S. (NSF International, 2021). For a more current listing of manufacturing
locations and supplier locations, visit the U.S. Environmental Protection Agency's (EPA's) Chemical Locator Tool
(EPA, 2022a).
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Carbon Dioxide Supply Chain - Full Profile
Do rnesti c Co nsum pti o ri
U.S. consumption of carbon dioxide in 2018 is estimated at 26,574 M kg. This estimate includes production of
33,657 M kg, import of 105 M kg, minus export of 7,187 M kg (EPA, 2020; USITC, 2021), as shown in Figure 2.
• Domestic Consumption (2018):
26,574 M kg
¦ Domestic Production (33,657 M kg)
¦ Imports for Consumption (105 M kg)
¦ Export of Domestic Production (7,187 M kg)
Figure 2, Domestic Production and Consumption of Carbon Dioxide in 2018
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Carbon Dioxide Supply Chain - Full Profile
Trade & Tariffs
Worldwide Trade
Worldwide import and export data for carbon dioxide are reported through the World Bank's World Integrated
Trade Solutions (WITS) software, as a category specific to carbon dioxide. In 2021, the U.S. ranked first
worldwide in total exports and third in total imports of carbon dioxide. In 2021, Germany ranked first worldwide
in total imports (WITS, 2022), as shown in Table 2.
Table 2. WITS Worldwide Export and Import of Carbon Dioxide in 2021
2021 Worldwide Trade
Carbon Dioxide (HS Code 2811.21)
Top 5 Worldwide Exporters
Top 5 Worldwide Importers
United States
10,044 M kg
Germany
237 M kg
Flungary
117 M kg
Belgium
154 M kg
Canada
107 M kg
United States
129 M kg
Norway
87 M kg
Mexico
117 M kg
Belgium
87 M kg
United Kingdom
113 M kg
Domestic Imports and Exports
Domestic imports and export data are reported by USITC in categories specific to carbon dioxide. Figure 3
summarizes imports for consumption1 and domestic exports2 of carbon dioxide between 2015 and 2020. During
this period, the overall quantity of imports remained relatively steady, while the overall quantity of domestic
exports grew significantly starting in late 2018. Through this five-year period, domestic exports exceeded
imports for consumption. Over this five-year period, Mexico was the primary recipient of domestic exports while
Canada was the primary source of imports (USITC, 2021).
A carbon dioxide shortage in Mexico occurred in late 2018 through 2019 due to reductions in availability of the
primary source of carbon dioxide in Mexico, natural gas (DeCarlo and Marrero, 2018). This led to a temporary
but dramatic increase in exports to Mexico in 2019 at a level not seen previously. Since 2018, exports to Mexico
have remained higher than in past years and account for a persistent increase in overall domestic exports
(USTIC, 2021).
1 Imports for consumption are a subset of general imports, representing the total amount cleared through customs and entering
consumption channels, not anticipated to be reshipped to foreign points, but may include some reexports.
2 Domestic exports are a subset of total exports, representing export of domestic merchandise which are produced or manufactured in
the U.S. and commodities of foreign origin which have been changed in the U.S.
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Carbon Dioxide Supply Chain - Full Profile
30,000
25,000
20,000
Domestic Trade of Carbon Dioxide
HS Code 2811.21
10,000
5,000
0
I
o
o.
E
2015
o
E
2016
o
E
2017
o
2018
£
o
E
2019
2020
I Imports from Canada
I Imports from Austria
Imports from Other Countries
I Exports to Mexico
Exports to Canada
Exports to Other Countries
Figure 3. USITC Domestic Import and Export of Carbon Dioxide between 2015 and 2020
Tariffs
There is a 3.7% general duty, and a 25% additional duty for China, for import of carbon dioxide (USITC, 2022), as
summarized in Table 3.
Table 3. 2020 Domestic Tariff Schedule for Carbon Dioxide
HS Code
General Duty
Additional Duty - China
(Section 301 Tariff List)
Special Duty
2811.21
3.7%
25%
Free (A, AU, BH, CA, CL, CO, D, E, IL, JO,
KR, MA, MX, OM, P, PA, PE, SG)3
Market History & Risk Evaluation
History of Shortages
Between 2017 and 2021 numerous water systems received force majeure notices from their contracted carbon
dioxide suppliers. Many suppliers referred to a lack of feedstock (ethanol) due to temporary shutdown of
ethanol production facilities. The fluctuation in demand for ethanol due to fluctuating demand for refined
petroleum products directly affected the availability of refined carbon dioxide. Carbon dioxide production can
fluctuate seasonally as well, as it may be tied to corn harvest (ethanol) and fertilizer production (ammonia). Both
industries have planned downtimes for annual maintenance.
The COVID-19 pandemic created significant volatility in the commercial market for carbon dioxide. A confluence
of events reduced demand for ethanol and ammonia-based fertilizer, and the supply of purified carbon dioxide
dramatically decreased. Certain areas of the U.S. were more heavily impacted by the volatile carbon dioxide
3 Symbols used to designate the various preference programs and trade agreements. A full list of special trade agreements and
associated acronyms can be found at https://help.cbp.eov/s/article/Article-310?laneuaee=en US and the General Notes Section of the
Harmonized Tariff Schedule https://hts.usitc.eov/current
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Carbon Dioxide Supply Chain - Full Profile
market conditions in 2020. The Northeast, Southeast, and Southwest were all impacted by closures or idling of
regional carbon dioxide purification plants in 2020-2021. Water systems in Florida were uniquely vulnerable to
disruptions in the supply of carbon dioxide given the closure of the only regional plant consistently supplying the
Florida market, located in southern Georgia. These events created price volatility and led to significant increases
in cost of supply for some water systems.
Risk Evaluation
The complete risk evaluation methodology is described in Understanding Water Treatment Chemical Supply
Chains and the Risk of Disruptions (EPA, 2022b). The risk rating is calculated as the product of the following three
risk parameters:
Risk = Criticality x Likelihood x Vulnerability
Criticality Measure of the importance of a chemical to the water sector
Likelihood Measure of the probability that the chemical will experience a supply disruption in the
future, which is estimated based on past occurrence of supply disruptions
Vulnerability Measure of the market dynamics that make a chemical market more or less resilient to
supply disruptions
The individual parameter rating is based on evaluation of one or more attributes of the chemical or its supply
chain. The ratings and drivers for these three risk parameters are shown below in Table 4.
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Carbon Dioxide Supply Chain - Full Profile
Table 4. Supply Chain Risk Evaluation for Carbon Dioxide
Risk Parameter Ratings and Drivers
ICriticality High
1 Likelihood High
(Vulnerability Low 1
Carbon dioxide is essential and widely
used for pH adjustment.
The water sector has experienced
several regional carbon dioxide supply
disruptions in the past. From 2017
through 2021 disruptions in the
supply of carbon dioxide occurred due
to a decrease in supply as a result of
both losses in production capacity due
facility closures and reduced
production of ethanol.
Strong domestic manufacturing
capabilities and a distributed
manufacturing base provide some
resilience to supply disruptions.
However, facility closures in 2021 and
the potential for future losses in
production capacity could increase
vulnerability.
Risk Rating: Moderate-Low
References
Air Products, 2014. Safetygram 18 Carbon Dioxide, retrieved from
https://www.airproducts.com/companv/sustainabilitv/safetygrams
American Water Works Association (AWWA), 2018. B510 Carbon Dioxide. Denver, CO: American Water
Works Association.
DeCarlo, S., and Marrero, A., 2018. Not My Beer: The Effects of a C02 Shortage. U.S. International Trade
Commission (USITC) Executive Briefings on Trade, retrieved from
https://www.usitc.gov/staff publications/all?f%5B0%5D=document type%3Aexecutive briefings
EPA, 2020. 2020 TSCA Chemical Data Reporting, retrieved from https://www.epa.gov/chemical-data-
reporting/access-cdr-data#2020
EPA, 2022a. Chemical Suppliers and Manufacturers Locator Tool, retrieved from
https://www.epa.gov/waterutilitvresponse/chemical-suppliers-and-manufacturers-locator-tool
EPA, 2022b. Understanding Water Treatment Chemical Supply Chains and the Risk of Disruptions, retrieved
from https://www.epa.gov/waterutilitvresponse/water-sector-supplv-chain-resilience
Intergovernmental Panel on Climate Change (IPCC), 2005. IPCCSpecial Report on Carbon Dioxide Capture
and Storage, retrieved from https://www.ipcc.ch/report/carbon-dioxide-capture-and-storage/
Linde, 2021. Safety Data Sheet for Carbon Dioxide, retrieved from https://www.lindeus.com/-
/media/corporate/praxairus/documents/sds/carbon-dioxide/carbon-dioxide-medipure-co2-safetv-data-
sheet-sds-p4574.pdf?la=en
National Center for Biotechnology Information (NCBI), 2021. PubChem Compound Summary for CID 280,
Carbon Dioxide, retrieved from https://pubchem.ncbi.nlm.nih.gov/compound/Carbon-Dioxide
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National Renewable Energy Laboratory (NREL), 2019. Comparative Economics of Carbon Capture into
Alternative Dispositions, Routes, and End Products. New Technologies & Economics for Carbon
Capture/Sequestration Conference, Chapel Hill, North Carolina, March 29, 2019, retrieved from
https://www.nrel.gov/docs/fyl9osti/73573.pdf
NSF International, 2021. Search for NSF Certified Drinking Water Treatment Chemicals, retrieved from
https://info.nsf.org/Certified/PwsChemicals/
Rushing, S., 2020. C02 Outlook: Consequences of the Crunch. Ethanol Producer Magazine, June 10, 2020,
retrieved from https://ethanolproducer.com/articles/17216/co2-outlook-consequences-of-the-crunch
State C02-E0R Deployment Work Group, 2017. Capturing and Utilizing C02from Ethanol: Adding Economic
Value and Jobs to Rural Economies and Communities While Reducing Emissions, retrieved from
https://www.kgs.ku.edu/PRS/ICKan/2018/March/WhitePaper EthanolC02Capture Dec2017 Final2.pdf
U.S. Federal Trade Commission (FTC), 2018. Analysis of Proposed Agreement Containing Consent Orders to
Aid Public Comment, In the Matter ofLinde AG, Praxair, Inc., and Linde PLC, File No. 171-0068, retrieved
from https://www.ftc.gov/svstem/files/documents/cases/1710068 praxair linde-analvsis.pdf
U.S. International Trade Commission (USITC), 2021. USITC DataWeb, retrieved from
https://dataweb.usitc.gov/
U.S. International Trade Commission (USITC), 2022. Harmonized Tariff Schedule (HTS) Search, retrieved from
https://hts.usitc.gov/
World Integrated Trade Solutions (WITS), 2022. Trade Statistics by Product (HS 6-digit), retrieved from
https://wits.worldbank.org/trade/countrv-bvhs6product.aspx?lang=en#void
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