Industrial Uses of CO₂ Captured from Ethanol Production

Carbon dioxide (CO₂) is usually discussed in the context of greenhouse gas emissions. But in an ethanol plant, it is also a valuable industrial product.

During the process of ethanol production, CO₂ is generated naturally through fermentation. Rather than venting this gas into the atmosphere, modern ethanol plants now capture, purify, and route it directly into the supply chains of major industries. When handled correctly, this so-called "by-product" becomes a reliable, high-margin revenue stream.

As India accelerates toward its E20 blending targets, the volume of CO₂ available from fermentation is set to grow exponentially. This is both an environmental and a significant business opportunity for producers and industrial buyers alike.

Here is how CO₂ is produced in ethanol plants, why it is uniquely valuable, and where it is used across the Indian economy.

How CO₂ is Produced in Ethanol Manufacturing

Ethanol is produced through fermentation. Yeast converts sugars derived from feedstocks such as maize, sugarcane, or broken rice into ethanol and carbon dioxide.

The stoichiometry is straightforward:

For every 1 litre of ethanol produced, approximately 1 kg of CO₂ is generated.

This means a 100 KLPD (kilolitres per day) ethanol plant has the potential to produce 100 tonnes of CO₂ per day. Over a year of operation, that volume becomes commercially significant.

Why Fermentation CO₂ is Different

Unlike CO₂ captured from coal-fired power plants or cement kilns which is dilute and contaminated with sulphur, heavy metals, and particulates, fermentation CO₂ is biogenic and relatively clean. It originates from biological processes, not fossil fuels. However, "relatively clean" does not mean food-grade. Raw fermentation CO₂ carries volatile organic compounds (VOCs) and trace alcohols that cause odour issues.

In a well-designed recovery system, CO₂ undergoes:

• Capture directly from fermentation tanks
• Scrubbing & Cooling to remove water-soluble impurities
• Deodorization & Filtration (critical for food-grade certification)
• Drying & Purification to meet food quality standards
• Compression & Storage for industrial dispatch

This process transforms a waste gas into a certified industrial input.

Why Capturing CO₂ Makes Practical Sense

Capturing CO₂ is not just about reducing emissions. It also creates practical advantages:

• It converts a by-product into a revenue stream.
• It improves overall plant efficiency and EBITDA.
• It supports responsible resource use.
• It insulates producers from single-commodity risk.
• It meets growing industrial demand for certified "Green CO₂".

As global beverage and food majors commit to net-zero supply chains, biogenic CO₂ from ethanol plants is increasingly preferred over fossil-derived CO₂. Some markets already recognise this as Green CO₂, attracting a price premium.

Major Industrial Uses of Captured CO₂

CO₂ from ethanol plants serves a diverse and expanding set of industries. Below are the most relevant applications.

1. Beverage Industry

The beverage industry remains the largest consumer of food-grade CO₂ in India.

CO₂ is used for:

• Carbonating soft drinks
• Producing sparkling water
• Adding fizz to beverages

Food-grade CO₂ must meet strict purity standards. Ethanol plants with proper purification and deodorization systems are well-positioned to supply this premium market.

With per capita beverage consumption rising and packaged drinking water penetrating Tier-2 and Tier-3 cities, the demand gap for reliable, domestic CO₂ supply is widening.

2. Food Processing and Cold Chain

CO₂ is critical to India's rapidly expanding cold chain and processed food sector.

Modified Atmosphere Packaging (MAP):

CO₂ displaces oxygen in packaged food, retarding bacterial growth and extending shelf life. 

Common applications include:

• Fresh poultry and meat
• Bakery and confectionery products
• Ready-to-eat meals

Dry Ice:

Solid CO₂ (dry ice) is used for:

• Cold chain transport of frozen foods
• Pharmaceutical shipments (vaccines, biologics)
• Industrial cleaning (dry ice blasting)

As India invests in integrated cold chain infrastructure under schemes like the PM Kisan SAMPADA Yojana, industrial CO₂ demand is projected to grow steadily.

3. Chemical Manufacturing

CO₂ is a key raw material in several chemical processes.

Urea Production:

The largest captive consumer of CO₂ is the fertilizer industry, where CO₂ reacts with ammonia to form urea. However, this is typically an integrated operation. Merchant supply to urea plants is viable only when ethanol facilities are located in close proximity to fertiliser complexes.

Methanol & Syngas:

Emerging technologies now enable the hydrogenation of CO₂ to produce methanol and synthetic fuels. While not yet mainstream in India, this represents a long-term avenue for CO₂ offtake.

4. Oil and Gas Industry

Internationally, CO₂ is used extensively for Enhanced Oil Recovery (EOR).

In this process:

• CO₂ is injected into oil reservoirs
• It increases pressure
• It improves oil extraction efficiency

Although India’s EOR activity is limited compared to some other countries, CO₂ still plays a role in certain oilfield applications and industrial pressurization systems.

5. Construction and Building Materials

One of the most promising emerging applications is CO₂ curing in concrete.

When CO₂ is injected into fresh concrete:

It reacts with calcium compounds to form calcium carbonate

• Compressive strength increases
• Curing time reduces
• Permanent carbon mineralisation occurs

This process, known as Carbon Capture and Utilization (CCU) in construction, is gaining traction among sustainability-focused infrastructure players. With India undertaking the largest housing and infrastructure expansion in its history, this segment could become a significant offtaker.

6. Agriculture and Greenhouses

CO₂ is a plant nutrient. In controlled-environment agriculture, CO₂ enrichment accelerates photosynthesis.

Applications:

• Greenhouse vegetable cultivation
• Algae cultivation for biofuels, nutraceuticals, and aquafeed
• Mushroom farming
• Improve crop yields
• Speed up plant growth
• Enhance overall productivity

As protected cultivation and polyhouse farming expand under Rashtriya Krishi Vikas Yojana (RKVY) , agricultural demand for industrial CO₂ is expected to rise.

Business Opportunity for Ethanol Producers

For ethanol manufacturers, capturing CO₂ is not just an environmental measure, it is a commercial decision.

Installing a CO₂ recovery system allows producers to:

• Diversify revenue: Ethanol prices are volatile; CO₂ offtake agreements provide stable, contracted income.
• Improve utilisation: Monetizing a previously vented stream improves overall resource efficiency.
• Access premium markets: Food-grade and Green CO₂ attract higher margins than merchant ethanol.
• Future-proof compliance: As carbon taxation and emissions reporting expand, early movers will face lower regulatory adjustment costs.

Instead of treating CO₂ as waste, producers can market it as an industrial product.

Companies that integrate CO₂ capture systems early often gain a competitive advantage, especially as environmental regulations become stricter.

Challenges in CO₂ Capture and Supply

While the opportunity is clear, there are practical considerations:

1. Capital Investment

Recovery systems require expenditure on scrubbers, deodorizers, compressors, and storage spheres.

2. Purity Certification

Food and pharma buyers mandate IS 307 compliance. Continuous VOC monitoring is essential.

3. Logistics & Storage

CO₂ is transported in pressurised cylinders or cryogenic tankers. Supply reliability depends on fleet management. Logistics planning is essential for safe supply.

4. Market Access

Long-term offtake agreements with industrial gas companies or direct end-users are necessary for consistent dispatch.

Despite these hurdles, the payback period for well-executed CO₂ recovery projects in India typically ranges from 24 to 36 months, depending on scale and market access.

CO₂ and the Circular Economy

Ethanol production is already part of a renewable fuel system. When CO₂ from fermentation is captured and reused, it supports better resource efficiency.

Instead of releasing CO₂ directly into the atmosphere, it is redirected into industries that need it. This reduces reliance on fossil-based CO₂ sources and supports more responsible manufacturing practices.

Biological source → Industrial input → No additional fossil carbon extracted

As India scales its biofuel capacity to meet E20 and beyond, the availability of biogenic, fermentation-derived CO₂ will expand proportionally. Industries currently reliant on CO₂ from ammonia plants or imported sources can benefit from this reliable, domestic, and cleaner supply.

Turning Fermentation CO₂ into Industrial Value

CO₂ captured from ethanol production is not just a by-product. It is an industrial resource with measurable commercial and environmental value.

It supports:

• Beverage carbonation and food preservation
• Chemical synthesis and emerging construction technologies
• Agricultural productivity and cold chain logistics

For ethanol producers, CO₂ recovery offers a clear path to revenue diversification and operational resilience. For industrial buyers, it offers a dependable, domestically-produced, and increasingly preferred source of Green CO₂.

As biofuel production scales up, captured CO₂ will continue to play an important role across multiple sectors. With the right systems and partnerships in place, this by-product can contribute meaningfully to both industry growth and better resource use.