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The compressed natural gas (CNG) market size is forecast to increase by USD 19.77 billion at a CAGR of 7.51% between 2023 and 2028. The report includes historic market data from 2018-2022. CNG is considered a cleaner alternative to traditional fossil fuels, as it emits lower levels of pollutants and greenhouse gases. The CNG market is growing globally due to increasing environmental concerns and the need for energy diversification.
The market growth analysis depends on the increase in the supply of natural gas, the rising energy demand leading to improvements in CNG storage tanks and the technological advances in the market. The market report also includes an in-depth analysis of the increase in number of CNG-powered vehicles, the increase in the supply of natural gas, and the fluctuation in global oil and gas prices.
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The US EIA classifies cars and trucks in the light-duty vehicle (LDV) segment as fleet and passenger vehicles with a gross vehicle weight rating (GVWR) of 8,500 lbs. or less. To meet the International Energy Agency (IEA) Net Zero Emissions Scenario by 2050, the automotive industry will need to increase the market share of electric vehicles and accelerate improvements in the fuel efficiency of new conventional vehicles. As a result, there is a great chance that CNG light-duty vehicles will be widely used for transportation during the forecast period.
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Further, the development of the carbon correction factor is attributed to the significant benefits, reduced GHG emissions, and the overall WtW impact of switching from diesel and petrol to CNG as a fuel in passenger cars as well as light and heavy duty buses. Thus, owing to the significant emissions of GHGs from gasoline-powered LDVs and regulations worldwide to reduce the same, there has been significant adoption of CNG-operated LDVs across the world, which will propel the market growth during the forecast period.
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APAC is estimated to contribute 44% to the growth of the global market during the forecast period. Technavio’s analysts have elaborately explained the regional trends and drivers that shape the market during the forecast period. The growth in demand in APAC is driven by countries such as Japan, Pakistan, China, South Korea, India, and Taiwan. Pakistan is one of the largest users of CNG across the world. There has been significant demand in China, and it is expected to grow rapidly.
Moreover, initiatives are being undertaken to increase the adoption in the transportation sector. Additionally, there has been significant adoption of CNG in the transportation sector in India. The Government of India has been supporting the infrastructure developments to ensure its availability. Thus, the market in APAC is expected to grow rapidly during the forecast period due to the demand for clean fuels such as CNG and the development of infrastructure to support the adoption of CNG as a transportation fuel.
The Compressed Natural Gas (CNG) Market experiences growth driven by the surge in CNG-powered vehicles, particularly in the automobile industry catering to light duty vehicles, medium duty trucks, medium duty buses, and heavy duty trucks. An evident trend in this market is the increase in the supply of natural gas vehicles, facilitated by advancements in gas exploration techniques, including unconventional sources such as shale gas reserves.
However, the industry faces challenges such as the fluctuation in global oil and gas prices, impacting the competitiveness of CNG against conventional fuels and influencing adoption rates among truck and fleet owners. Despite challenges, the global compressed natural gas market continues to expand, driven by efforts to reduce emissions and mitigate ozone depletion, with a focus on promoting cleaner transportation solutions through the adoption of CNG-powered vehicles across heavy-duty transport trucks and other segments of the automotive industry.
The surge in CNG-powered vehicles stands out as the primary driver of market expansion. CNG, known for its eco-friendly attributes, significantly contributes to improved air quality and sustainability, making it an ideal choice for urban settings. This positive momentum is further fueled by supportive government policies and robust CNG infrastructure development, fostering greater consumer acceptance and enhancing the cost competitiveness of CNG vehicles.
Moreover, with the increasing demand for sustainable transportation solutions, CNG vehicles in India are poised for remarkable growth, anticipated to soar by 233.33% by 2024-2025 compared to 2018. This growth trajectory is further buoyed by the establishment of an additional 5,000 CNG filling stations. The entry of key industry players such as automotive supplier MAHLE, grid operator EWE NETZ, and lightweight alloy component manufacturer Hexagon Xperion into the CNG mobility consortium further bolsters the market outlook. Consequently, these developments are set to drive substantial market expansion in the foreseeable future.
An increase in the supply of natural gas is the primary trend shaping market growth. It has become one of the fastest-growing fossil fuels globally due to the growth of the supply of tight gas, coalbed methane, and shale gas. Hence, the global oil and gas industry has experienced rapid growth in the unconventional oil and gas resources sector. Moreover, according to the IEA, global consumption is expected to increase from 3,630 bcm (billion cubic meters) in 2016 to 4,000 bcm by 2022.
Moreover, aligned with the market trends, the increase in natural gas production in countries such as the US and Russia will boost the supply of natural gas, thereby enabling them to meet the growing demand for CNG as a transportation fuel across the world. Thus, this will propel the growth of the market during the forecast period.
Fluctuation in global oil and gas prices is a challenge that affects market growth. The recent surplus in crude oil supply has led to volatility in global crude oil prices since 2021. For example, in Japan, during the fiscal year 2022, the price of imported crude oil per kilogram was roughly USD 589.71, the highest amount when compared to the preceding ten years. The crude oil price was USD 104.16 per barrel in 2014. Thus, such steep price reductions impact the financials of companies involved in the upstream oil and gas sector and have a negative impact on their profit margins and the market.
Additionally, CNG-fueled vehicles might lose their popularity and result in the extension of a payback period for the fleet operators owing to the high upfront capital costs involved. According to the IEA, the changes in the fuel injection system and the size of the fuel storage tank as compared to conventional fuel vehicles result in an additional cost of USD 2,000- USD 10,000 for a new CNG vehicle. Hence, the volatility of crude oil prices can have an adverse impact on the availability and price of natural gas, thus restricting market growth during the forecast period.
The market research report includes the adoption lifecycle of the market, covering from the innovator’s stage to the laggard’s stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the market analysis and report also include key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their growth strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
BP Plc: The company offers compressed natural gas such as bio CNG for road transport and operates biomethane refueling stations, providing renewable solutions to the heavy goods vehicle industry.
The research report also includes detailed analyses of the competitive landscape of the market and information about 20 market companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
The market is witnessing substantial growth owing to increasing concerns over air pollution and the transition away from traditional fuels like diesel fuel and propane/LPG. CNG, primarily composed of light hydrocarbons like nitrogen and carbon dioxide, is sourced from non-associated gas fields, reducing dependency on crude oil output and oil wells. Further, as the industrial sector seeks cleaner alternatives, CNG offers a viable solution, particularly in urbanized areas. The auto industry is embracing natural gas cars, driven by both environmental consciousness and economic factors like rising disposable income.
Furthermore, to address pressure difficulties and ensure efficient storage and transport, storage cylinders and continuous carbon fiber wrapping are utilized. Adsorbed natural gas technology further enhances storage capacity and safety. While initial investment and installation costs may be higher, the long-term maintenance expenses are comparatively lower. This makes CNG an attractive option for various sectors, including trash firms and emerging revenue pockets in the transportation sector.
However, challenges remain, including the impact of domestic and localized market players, but overall, the CNG market shows promise as a sustainable energy solution. The market is driven by the increasing demand for cleaner fuel alternatives amidst concerns over carbon emissions from traditional Internal combustion engines fueled by resources like Peat and Anthracite coal. With rapid Urbanization, cities are embracing CNG as a viable option for public transport, including buses and trunks, leading to a surge in demand. Major players like Chevron Corporation are investing in infrastructure and applications for CNG, enhancing awareness and facilitating the conversion and distribution of natural gas. Companies like ANGI Energy are pioneering advancements in CNG tank technology, promoting the adoption of gas vehicles and bolstering gas distribution networks alongside the growth of LNG and NGV sectors.
The market research and growth report forecasts market growth by revenue at global, regional & country levels and provides an analysis of the market growth and forecasting and the latest market growth and trends opportunities from 2018 to 2028.
Compressed Natural Gas (CNG) Market Scope |
|
Report Coverage |
Details |
Page number |
174 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 7.51% |
Market Growth 2024-2028 |
USD 19.77 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
6.68 |
Regional analysis |
APAC, Middle East and Africa, South America, Europe, and North America |
Performing market contribution |
APAC at 44% |
Key countries |
US, Iran, Qatar, Turkmenistan, and Russia |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
Key companies profiled |
Bharat Petroleum Corp. Ltd., BP Plc, Chevron Corp., China National Petroleum Corp., Clean Energy Fuels Corp., E.ON SE, ENGIE SA, Eni SpA, Gazprom Nedra LLC, Gujarat Gas Ltd., Maharashtra Natural Gas Ltd., ONTRAS Gastransport GmbH, OrangeGas BV., Shell plc, Snam SpA., TotalEnergies SE, Trillium Transportation Fuels LLC, VERBIO Vereinigte BioEnergie AG, and Indraprastha Gas Ltd. |
Market dynamics |
Market trends and analysis, Market growth inducers and obstacles, Fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, Market condition analysis for the forecast period. |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
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1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by Application
7 Market Segmentation by Source
8 Customer Landscape
9 Geographic Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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