Answer extracted from The Pitch podcast — listen to the full episode below.
What drives CO2 market volatility?
CO2 market volatility is driven by three interconnected forces: geopolitical conflicts that disrupt the physical transport of CO2, rising electricity costs since CO2 production is energy-intensive, and explosive demand growth from emerging sectors. E-fuels and construction are expanding at 23% and 30% CAGR respectively—far outpacing current supply capacity.
The challenge isn't just economic; it's logistical. Transportation represents 87% of gas distribution costs, and any geopolitical disruption—like conflict affecting fuel availability—immediately bottlenecks the entire supply chain. This creates sudden price spikes that ripple across industries relying on CO2.
Energy costs compound the problem. Producing CO2 requires significant electricity input, so when power prices rise, production costs follow. As Sonny explains in The Pitch episode, this dual pressure—supply shock plus production cost inflation—makes CO2 pricing unpredictable. Historically, prices have ranged from £200 to £2,500 per ton, spiking above £5,000 during acute shortages like the 2021 UK shortage, which cost the economy around two billion pounds.
Demand is accelerating faster than supply can respond. The e-fuels sector alone is growing at 23% CAGR, while construction—another major CO2 consumer—is expanding at 30% CAGR. Traditional industrial gas plants take one to seven years to build and cost hundreds of millions to a billion dollars, so they cannot keep pace with this surge. The supply-demand mismatch intensifies volatility and locks customers into dependency on expensive, unreliable supply chains.
"We can cut the deployment time from years to days, and reduce CO2 costs by up to 50% for our customers."
Sonny — Co-founder and CEO of Ventrix Labs. Sonny has a background in mathematics and AI, previously working at a Sequoia-backed AI startup. He comes from a family heritage in cement, steel manufacturing, and traditional heavy industries. He founded Ventrix Labs approximately one year and eight months ago while completing his master's degree at Imperial College London, where he met his co-founders through the Climate Entrepreneur Society.
The real insight into supply-demand dynamics comes from exploring how Ventrix's modular design addresses deployment bottlenecks—a deeper strategy discussed throughout the full episode that shows why centralized supply models fail in volatile markets.
Key takeaways
- Geopolitical disruptions affect fuel availability for transport, which makes up 87% of gas distribution costs and creates immediate supply shocks.
- Energy production costs rise alongside electricity prices, directly increasing CO2 manufacturing expenses and market price volatility.
- E-fuels (23% CAGR) and construction (30% CAGR) are growing far faster than traditional gas plant capacity can expand, creating persistent supply shortages.
- Traditional industrial gas plants require one to seven years and hundreds of millions to a billion dollars to build, making them unable to respond to surging demand.
See also
What is the timeline for Ventrix deploying its first unit to the Welsh brewery?
Ventrix is currently deploying to the Welsh brewery with an end-to-end deployment timeline of six months, which is significantly faster than the normal one to seven years required for traditional industrial gas plants.
How much has Ventrix raised to date and what are the proceeds from the current 2 million dollar round?
Ventrix previously raised approximately 400K to 500K pounds in an angel round at a 5.75 million pound valuation, with participation from Alexis Ohanian, Reddit co-founder, and is currently raising 2 million dollars in this funding round.
What intellectual property protections does Ventrix have?
Ventrix's IP focuses on process engineering, how the unit is designed, and how units communicate with each other. The mechanical design enabling modularity and deployment speed is a key differentiator.