Shortage of Dry Ice due to Shift in CO2 Demand for Sequestration
The dry ice industry is facing a critical supply-demand imbalance, with demand for dry ice having risen by approximately 5% per year over the past five years, reaching approximately 4,600 tonnes per day (1.25 million tonnes per year). This surge in demand has led to a shortage of CO2 supply, a primary ingredient in the production of dry ice.
Industry experts are proposing potential solutions to address this issue. One such solution is the exploration of sustainable sources and decentralized recovery of CO2. Holyoak, a notable figure in the industry, has suggested that a shift towards decentralized recovery could offer smaller-scale CO2 supply from local sources, helping to alleviate the current imbalance.
However, concerns have been raised about the potential consequences of pushing plants too much. Garvey, another industry leader, warns that the industry must pay close attention to the current sea change happening, as overreliance on CO2 recovery could lead to problems.
In response to this challenge, companies like Linde, Air Liquide, and Praxair have announced plans to build new CO2 production facilities to meet the growing demand for dry ice and address the increasing CO2 supply shortages. These facilities aim to produce CO2 more efficiently, reducing the amount of CO2 needed to produce a pound of dry ice. Currently, it takes about 1.5lbs (0.7kg) of CO2 to make one pound of dry ice with recycling, but many producers require as much as 2.5lbs (1.13kg) of CO2 per pound of dry ice without recycling.
Several dry ice producers are also exploring alternatives such as CO2 recovery from biogenic waste, wastewater treatment, carbonate fuel cells, and direct air capture. These strategies aim to reduce the industry's reliance on traditional CO2 sources while minimising its carbon footprint.
The gap between dry ice demand and CO2 supply could cause significant problems for the industry, particularly in North America. The loss of 1,400 tonnes per day of CO2 supply will further exacerbate the supply-demand imbalance in the dry ice industry, as three facilities in California will go offline in the next 12 months, accounting for about 700 tonnes per day of CO2.
To secure its long-term future, the dry ice industry must adapt, with strategies like diversifying supply, increasing storage, and developing sustainable sources being proposed. The Inflation Reduction Act in the US has expanded the 45Q tax credit to $85 per tonne for both carbon sequestration and utilisation, incentivising emitters to divert CO2 away from the commercial market. This policy shift could contribute to a tighter CO2 market in the near future.
Garvey emphasises the need for the dry ice industry to adapt, suggesting that the industry should also consider strategies like improving efficiency, optimising logistics, and exploring partnerships with other industries to find new uses for CO2. He notes that some sustainable CO2 projects are already operational in the US, though their output is often limited.
As the dry ice industry navigates this critical period, it is clear that a combination of strategies will be necessary to ensure a stable and sustainable future. The industry must continue to innovate, adapt, and collaborate to meet the growing demand for dry ice while minimising its environmental impact.
