The reaction of calcium carbide with water, producing acetylene and calcium hydroxide, was discovered by Friedrich Wöhler in 1862.
:CaC(s) + 2HO(l) → CH(g) + Ca(OH)(aq)
This reaction was the basis of the industrial manufacture of acetylene, and is the major industrial use of calcium carbide.
Today acetylene is mainly manufactured by the partial combustion of methane or appears as a side product in the ethylene stream from cracking of hydrocarbons. Approximately 400,000 tonnes are produced this way annually (see acetylene preparation).
In China, acetylene derived from calcium carbide remains a raw material for the chemical industry, in particular for the production of polyvinyl chloride. Locally produced acetylene is more economical than using imported oil. Production of calcium carbide in China has been increasing. In 2005 output was 8.94 million tons, with the capacity to produce 17 million tons.
In the United States, Europe, and Japan, consumption of calcium carbide is generally declining. Production levels in the US during the 1990s were 236,000 tons per year.