The substance resembles powdered sugar and could revolutionise the way chemicals are used.
Each particle of dry water contains a water droplet surrounded by a sandy silica coating. In fact, 95 per cent of dry water is ''wet'' water.
Scientists believe dry water could be used to combat global warming by soaking up and trapping the greenhouse gas carbon dioxide.
Tests show that it is more than three times better at absorbing carbon dioxide than ordinary water.
Dry water may also prove useful for storing methane and expanding the energy source potential of the natural gas.
Dr Ben Carter, from the University of Liverpool, presented his research on dry water at the 240th National Meeting of the American Chemical Society in Boston.
He said: ''There's nothing else quite like it. Hopefully, we may see dry water making waves in the future.''
Another application demonstrated by Dr Carter's team was using dry water as a catalyst to speed up reactions between hydrogen and maleic acid.
This produces succinic acid, a key raw material widely used to make drugs, food ingredients, and consumer products.
Usually hydrogen and maleic acid have to be stirred together to make succinic acid. But this is not necessary when using dry water particles containing maleic acid, making the process greener and more energy efficient.
''If you can remove the need to stir your reactions, then potentially you're making considerable energy savings,'' said Dr Carter.
The technology could be adapted to create ''dry'' powder emulsions, mixtures of two or more unblendable liquids such as oil and water, the researchers believe.
Dry emulsions could make it safer and easier to store and transport potentially harmful liquids.
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