Published: 05/05/2026
Why More Businesses Are Switching to Nitrogen During the CO₂ Shortage
The CO₂ supply chain is under serious and it’s starting to disrupt operations across a wide range of industries. More than 200 million tonnes of CO₂ are used globally, but recent supply shortages combined with rising demand have created significant challenges for a wider range of businesses.
Why are CO₂ shortages happening?
Following large-scale strikes by the US on Iran, Iran has restricted access through the Strait of Hormuz in retaliation. This key global shipping route is crucial for transporting oil and gas, and therefore, shortages and shipping delays have put more pressure on everyday costs for homes and businesses worldwide.
In particular, CO₂ shortages are having a drastic impact on the food and beverage industry. If the situation continues, it could lead to wider disruption over the coming months and potentially into 2027.
What’s driving the current CO₂ shortages?
- Constant increased demand: Carbon dioxide plays an essential role across several sectors, including healthcare and food preservation. As demand continues to grow, limited production capacity is resulting in reduced availability.
- Large-scale production cuts: A large proportion of CO₂ is a secondary output of ammonia and fertiliser processing. When production in this sector slows, CO₂ levels drop, meaning there is less supply for external businesses.
- Disruptions to the global supply chain: Interruptions in transport networks as a result of the conflict in the Middle East have contributed to the lack of CO₂ supply.
Currently, there’s very little indication that these shortages will improve and, as a result, many businesses are starting to look at alternative solutions. Nitrogen generating systems have become the number-one substitute for CO₂.
What makes nitrogen a more stable option than CO₂?
It’s becoming increasingly clear that CO₂ is no longer a steadfast gas source. Ongoing supply challenges and pricing volatility have contributed to its instability, making it an unreliable gas option for businesses worldwide.
As a result, nitrogen is now being viewed as a more dependable alternative for the years ahead. Unlike CO₂, nitrogen is not tied to industrial by-product streams – and businesses have the freedom to generate this gas type on-site, without having to worry about cost spikes and delays from third parties. Therefore, businesses have greater control over their supply as and when they need it, without being forced to halt production.
What is on-site nitrogen generation?
On-site nitrogen generation systems allow businesses to produce gas directly on their premises – rather than having it transported in bulk from third parties. These systems suck in compressed air and separate nitrogen from oxygen and other gases using technologies such as Pressure Swing Adsorption (PSA) or Membrane Separation. From then on, the result is a continuous, controlled supply of pure nitrogen.
The key advantages of switching to nitrogen
There are several reasons why businesses are now switching from CO₂ to an industrial nitrogen generator:
More dependable supply
Nitrogen is generated on-site, eliminating the need for deliveries or reliance on stored gas levels.
Lower environmental impact
Producing nitrogen on-site helps reduce transport-related emissions, which supports a more sustainable operation.
Consistent performance
Because nitrogen is generated as needed, it provides a continuous, stable flow for industrial applications without potential downtime.
Reduced operating costs
Nitrogen is often a more economical option than CO₂, with fewer price swings and no ongoing delivery expenses. In turn, this helps businesses manage costs more predictably.
Plus, the UK government is stepping in to offset 100% of the initial investment for businesses keen to make the switch. Additionally, those with high energy consumption could be eligible for a grant known as the IETF (Industrial Energy Transformation Fund) to reduce energy use (e.g., by investing in state-of-the-art nitrogen generation).
How do nitrogen generators work?
So, you may be wondering how to generate nitrogen. It’s typically produced on-site using a method known as Pressure Swing Adsorption (PSA).
In this process, compressed air is fed into a system that selectively removes oxygen and other gases, leaving behind high-purity nitrogen. This nitrogen is then delivered directly to the point of use via a compressed air line, providing a continuous supply without the need for cylinders or bulk storage. The good news is that it can be used around the clock without waiting for external deliveries.
Real-life cases of choosing nitrogen over carbon dioxide
Europe’s largest bottling facility (name withheld for confidentiality) is among the companies that have rapidly transitioned from CO₂ dependency to nitrogen, with highly positive results.
What began as a trial installation of a single nitrogen generator to quickly evaluate performance and feasibility evolved into a programme that spanned the entire business. Perhaps not surprisingly, the change has resulted in annual savings of more than £1.5 million.
Nitrogen generator solutions from Air Supply Lancashire
Ready to upscale your gas needs? Air Supply Lancashire is on hand to provide your business with a selection of the latest Parker nitrogen generation systems designed to integrate into existing operations as an alternative to CO₂.
Get in touch with the team today to find out more.