Carbon dioxide (chemical formula CO2) is a colorless, odorless gas vital to life on Earth. This naturally occurring chemical compound is composed of a carbon atom covalently double bonded to two oxygen atoms.arbon dioxide is produced during the processes of decay of organic materials and the fermentation of sugars in bread, beer and winemaking. It is produced by combustion of wood, carbohydrates and fossil fuels such as coal, peat, petroleum and natural gas.