The removal of carbon dioxoide from gas/air streams is more often becoming necessary in many industries for different purposes. In cryogenic air separation plant, air has to be free from carbon dioxide before its liquefaction otherwise blockage due to freezing of heat exchange equipment would result. Enrichment of methane in biogas to have fuel of higher calorific value can be achieved by removing carbon dioxide. Elimination of carbon dioxide from the flue gas helps to increase its calorific value as well as to eliminate the greenhouse gas. The carbon dioxide thus generated can be utilised as an effective refrigerant. Carbon dioxide could be removed in several ways such as by chemical separation, membrane separation, cryogenic separation as well as by adsorption, the latter playing a vital role if suitable adsorbent material is available. We have developed activated carbon pellets from coconut shell and also designed a PSA adsorption system for studying the effectiveness of the activated carbon pellets in separating carbon dioxide. This paper describes the physical properties of the carbon pellets, preliminary findings on carbon dioxide adsorption and the development of an adsorption system for gas separation/purification.