In March 2025, the Asian liquid carbon dioxide industry experienced a dramatic price surge after an unexpected escalation in natural gas prices and demand pressures. As liquid carbon dioxide is predominantly derived from natural gas, any variation in the price of the latter would also be reflected proportionally in terms of production cost and market price of the former. Recent disturbances to the natural gas supply chain, added to peaking electricity demand for gas, put extra pressure on liquid carbon dioxide availability and price.

Shortages of liquid carbon dioxide were noted by China, Japan, and South Korea, especially in the latter half of the winter-spring period, when energy demand was highest. In China, stabilization of energy security in the 14th Five-Year Plan has led to accelerated development of infrastructure such as major pipelines such as the West-East Natural Gas Pipeline and the China-Russia Eastern Route. Storage capacity has trailed behind production targets, however, and caused bottlenecks in supply that restricted the availability of liquid carbon dioxide in March.

Balancing market pressure were natural gas price mechanism reforms designed to promote competitive practice and operational efficiency. While ultimately positive, these reforms introduced transitional market uncertainties, further affecting liquid carbon dioxide prices. Despite high production rates, the absence of storage capacity for sufficient CO2 has amplified the effect of these fluctuations, producing volatile market movement.

At the same time, there was growth in demand for liquid carbon dioxide in non-energy end-use markets. The food and beverage sector, for example, saw increased application due to improved demand for packaged food and carbonated soft drinks. Urbanization and Asian consumer tastes have fueled food-grade liquid carbon dioxide demand, adding to overall market tightness.

In Northeast Asia, warmer climate and early emergence of summer weather conditions augmented electricity consumption, further putting natural gas reserves under pressure. Supplemental gas supplied to generate electricity reduced feedstock available to manufacture liquid carbon dioxide, again augmenting the demand-supply deficit in March.

The manufacturing sector also continues expanding its uses of liquid carbon dioxide, namely in cooling, carbonation, and preservation. Nevertheless, constrained storage facilities and profitability issues have checked growth activities.

Finally, March 2025 was a tough month for the Asian liquid carbon dioxide market. Prices rose when natural gas prices were rising, supply was tightening, and all sectors of industry were experiencing healthy demand. Market players are watching closely for future infrastructure development as well as policy shifts, hoping these will turn around current bottlenecks and bring some much-needed stability to the liquid carbon dioxide market.