Dimethyl Ether (DME) Synthesis From Carbon Dioxide (CO2) Global Market Report 2025

The dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market size has grown rapidly in recent years. It will grow from $1.03 billion in 2024 to $1.2 billion in 2025 at a compound annual growth rate (CAGR) of 16.4%. The growth in the historic period can be linked to rising adoption of cleaner fuel alternatives in industrial sectors, increasing government support for renewable and low-carbon fuel research, growing demand for alternative fuels in transportation and household applications, increasing environmental regulations on carbon emissions and fossil fuel usage, and growing adoption of sustainable chemical synthesis processes.

The dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market size is expected to see rapid growth in the next few years. It will grow to $2.17 billion in 2029 at a compound annual growth rate (CAGR) of 16%. The growth in the forecast period can be driven by increasing demand for low-carbon transportation fuels, growing adoption of renewable hydrogen, rising investments in carbon capture, utilization, and storage (CCUS) infrastructure, increasing focus on decarbonizing industrial processes, and increasing pilot-scale projects and demonstrations. Major trends in the forecast period include developing hybrid catalytic systems, integration of power-to-liquid (PTL) technologies, innovation in bifunctional catalyst design, integration of life cycle assessment tools, and developing circular carbon pathways.

The increasing demand for clean and sustainable fuels is expected to drive the growth of the dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market. Clean and sustainable fuels are energy sources that produce minimal environmental pollution and are derived from renewable or low-carbon resources, ensuring long-term availability without depleting natural resources. This demand is rising due to environmental concerns, as industries and consumers aim to reduce greenhouse gas emissions, combat climate change, and lessen the ecological impact of traditional fossil fuels. Dimethyl ether synthesis from CO₂ contributes to clean and sustainable fuels by converting waste CO₂ into a low-emission, renewable alternative that reduces dependence on fossil fuels. For example, in September 2023, according to the U.S. Energy Information Administration, nationwide biofuels production capacity - including renewable diesel, biodiesel, ethanol, and other biofuels - stood at 23 billion gallons per year, reflecting a 6% increase in total capacity compared to January 2022.

Companies in the DME synthesis from CO₂ market are focusing on advanced catalytic conversion technologies to enhance conversion efficiency and reduce carbon emissions. These technologies use highly efficient catalysts to accelerate chemical reactions, enabling the conversion of CO₂ into valuable fuels like DME with lower energy consumption. In November 2025, Godavari Biorefineries Limited, an India-based bio-based manufacturing company, partnered with the Institute of Chemical Technology (ICT) to launch a pilot project converting industrial CO₂ emissions directly into DME. This clean-burning, low-emission fuel serves as an eco-friendly alternative to LPG and diesel and functions as a chemical feedstock for various industrial uses. The initiative reduces greenhouse gas emissions, supports a circular economy, and aligns with India’s energy transition and rural development goals.

In April 2024, the Council of Scientific and Industrial Research (CSIR) partnered with Bharat Heavy Electricals Limited (BHEL) to develop indigenous technology for capturing and converting CO₂ into DME, which can be blended with LPG. This collaboration aims to support India’s net-zero goals by advancing sustainable carbon capture and utilization technologies that transform CO₂ emissions into a valuable, low-emission fuel.

Major companies operating in the dimethyl ether (dme) synthesis from carbon dioxide (co₂) market are Sinopec Limited, BASF SE, Korea Gas Corporation, Linde plc, Air Liquide S.A., Johnson Matthey plc, Air Products And Chemicals Inc., Bharat Heavy Electricals Limited, Toyo Engineering Corporation, Nippon Gases Co. Ltd., Haldor Topsoe A/S, TNO, Godavari Biorefineries Limited, Proman AG, Mitsubishi Gas Chemical Company Inc., Oberon Fuels Inc., Real Carbon Technology Private Limited, Winspiration Energy And Engineering Pvt. Ltd., Dimeta B.V., Grillo-Werke AG

Asia-Pacific was the largest region in the market in 2024. Europe is expected to be the fastest-growing region in the forecast period. The regions covered in dimethyl ether (DME) synthesis from carbon dioxide (CO₂) report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East and Africa. The countries covered in the dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Note that the outlook for this market is being affected by rapid changes in trade relations and tariffs globally. The report will be updated prior to delivery to reflect the latest status, including revised forecasts and quantified impact analysis. The report’s Recommendations and Conclusions sections will be updated to give strategies for entities dealing with the fast-moving international environment.

The intensifying U.S. tariffs and escalating trade tensions in spring 2025 are expected to have a significant impact on the chemicals sector, which is bearing a disproportionate burden, particularly from tariffs on petrochemicals and intermediates, where affordable domestic substitutes are often unavailable. Producers of specialty chemicals, heavily dependent on Chinese raw materials, are experiencing production disruptions. At the same time, fertilizer manufacturers are seeing profit margins eroded due to tariffs on phosphate imports. In response, companies are ramping up R&D into bio-based alternatives, forming procurement alliances to consolidate buying power, and shifting production to tariff-neutral nations such as Saudi Arabia.

The dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market research report is one of a series of new reports that provides dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market statistics, including dimethyl ether (DME) synthesis from carbon dioxide (CO₂) industry global market size, regional shares, competitors with a dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market share, detailed dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market segments, market trends and opportunities, and any further data you may need to thrive in the dimethyl ether (DME) synthesis from carbon dioxide (CO₂) industry. This dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

Dimethyl ether (DME) synthesis from carbon dioxide (CO₂) refers to a chemical process that converts captured CO₂ into dimethyl ether, a clean and efficient alternative fuel, through catalytic hydrogenation. This process offers a sustainable method for utilizing CO₂ while helping to reduce greenhouse gas emissions and support the integration of renewable energy.

The main technologies for dimethyl ether (DME) synthesis from carbon dioxide (CO₂) are direct synthesis and indirect synthesis. Direct synthesis of dimethyl ether (DME) from carbon dioxide (CO₂) refers to a one-step chemical process in which CO₂ is converted directly into DME using catalysts, typically through hydrogenation to methanol followed by dehydration, without isolating intermediate products. The feedstocks used include carbon dioxide with hydrogen and carbon dioxide with syngas. These technologies are applied in various uses, such as fuel, aerosol propellant, refrigerant, chemical intermediate, and others, and serve multiple end-users, including automotive, power generation, the chemical industry, and more.

The dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market consists of revenues earned by entities by providing services such as carbon capture and utilization (CCU) services, catalyst development and optimization, process design and engineering services, technology licensing and consulting, and project development and operation services. The market value includes the value of related goods sold by the service provider or included within the service offering. The dimethyl ether (DME) synthesis from carbon dioxide (CO₂) market also includes sales of carbon monoxide, higher alcohols, formic acid, and light olefins. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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