Global Synthetic Natural Gas Market Outlook to 2030

Global Synthetic Natural Gas Market Overview

The Global Synthetic Natural Gas Market was valued at USD 22.09 billion. This growth is largely driven by the rising need to reduce carbon emissions, stringent government regulations promoting clean energy, and the increasing adoption of SNG in industrial applications, especially in regions with limited access to natural gas.

Key players in the Global synthetic natural gas market include Air Liquide, Siemens Energy, Linde AG, General Electric, and Sasol Limited. These companies are at the forefront of technological advancements, continuously innovating to improve the efficiency and cost-effectiveness of SNG production processes. Their strong market presence and extensive distribution networks have enabled them to maintain a competitive edge in the industry.

In April 2024, Brightmark RNG Holdings, a joint venture between Chevron USA Inc. and Brightmark, has opened its Eloy Renewable Natural Gas (RNG) center, producing pipeline fuel by capturing methane from dairy operations. Eloy RNG will produce RNG using anaerobic digesters at the Caballero Dairy farm in Arizona.

United States is the dominant region in the synthetic natural gas market share in 2023. The U.S. dominance is primarily due to the countrys substantial investments in clean energy technologies and its extensive natural gas infrastructure, which facilitates the integration of SNG. The availability of government incentives and the growing industrial demand for cleaner energy sources further reinforce the United States' leading position in the SNG market.

Global Synthetic Natural Gas Market Segmentation

The Global Synthetic Natural Gas market is segmented by various factors such as application, technology and region etc.

1. By Application: The market is segmented by application into Power Generation, Transportation, and Industrial Processes. In 2023, the Power Generation segment dominated the market share, driven by the increasing demand for cleaner energy in electricity production.
2. By Technology: The market is also segmented by technology into Gasification, Methanation, and Electrolysis. In 2023, the Methanation segment held the largest market share, due to its established technology and widespread adoption in converting biomass and other carbon sources into SNG. Methanation is particularly favored for its efficiency and scalability in large-scale industrial applications.
3. By Region: The Global market is regionally segmented into North America, Europe, APAC, MEA and Latin America. In 2023, North America dominates the market share due to substantial investments in clean energy technologies and extensive infrastructure. The regions advanced energy policies, strong government support, and large industrial base drive the adoption of SNG as a key energy source.

Global Synthetic Natural Gas Market Competitive Landscape

• Air Liquides Expansion: In April 2024, Air Liquide continues to expand its capacities in biomethane, also known as Renewable Natural Gas (RNG) in the U.S., with the construction of two new production units. These units, located in Center Township, Pennsylvania, and Holland Township, Michigan, will treat waste sourced from dairy farms.
• Sasols Expansion in South Africa: Sasol Limited announced in 2024 that it would expand its SNG production capacity in South Africa by 100 million cubic meters annually. The expansion, which involves an investment of ZAR 7 billion, is part of Sasols broader strategy to diversify its energy portfolio and reduce its carbon emissions. The new facility is expected to be operational by 2026 and will contribute to South Africas clean energy targets.

Global Synthetic Natural Gas Industry Analysis

Growth Drivers

• Increasing Demand for Clean Energy Alternatives: The World Energy Investment 2024 report, global energy investment is set to exceed USD 3 trillion for the first time in 2024, with USD 2 trillion going to clean energy technologies and infrastructure This shift is particularly pronounced in regions with strict environmental regulations, where SNG is being adopted as an alternative to conventional fossil fuels. The increasing consumption of natural gas has grown pushing industries to explore SNG as a viable, low-carbon substitute.

• Energy Security Concerns: With geopolitical tensions affecting the stability of natural gas supplies, many countries are turning to SNG as a means of ensuring energy security, to reduce reliance on foreign energy imports. The strategic reserves of SNG being developed in countries like Germany and South Korea are a testament to the rising importance of SNG in national energy policies.
• Industrial Adoption of SNG for Decarbonization: Industrial sectors, particularly those involved in heavy manufacturing and chemicals, are increasingly adopting SNG to meet their decarbonization goals. In 2024, industrial emissions are projected to be reduced by 1.8 billion tons of CO2 globally, largely due to the adoption of low-carbon alternatives like SNG. Countries such as China and India are leading this trend, with investments in SNG production facilities exceeding USD 10 billion in 2024.

Challenges

• Infrastructure Limitations: The existing natural gas infrastructure is not fully compatible with SNG, leading to additional costs for retrofitting and upgrading facilities, with a definite portion allocated to the modification of pipelines, storage facilities, and distribution networks. These infrastructure limitations pose a challenge to the scalability of SNG production and distribution, particularly in regions with underdeveloped energy infrastructure.

• Competition from Renewable Energy Sources: The rapid growth of renewable energy sources, such as solar and wind, presents a challenge to the SNG market. The decreasing cost of renewables, with solar energy production costs drop, is making them a more attractive option compared to SNG. This growing competition from renewables is likely to limit the market share of SNG in the global energy mix.

Government Initiatives

• European Unions Green Gas Strategy: The RePower EU plan was adopted in 2022, aims to reduce the EU's dependence on Russian fossil fuels and further accelerate the energy transition. It raised Europe's target for the share of renewables in the energy mix to 45% by 2030. The World Biogas Association has urged the EU to set a binding target for 11% green gases in the grid by 2030, amounting to around 500 TWh, with biomethane delivering 360 TWh (8%) and renewable hydrogen 140 TWh (3%).

• Chinas National Energy Plan: As part of its 2024 National Energy Plan, China has committed USD 10 billion to the development of SNG production facilities. This plan aims to reduce the countrys reliance on imported natural gas and enhance energy security by increasing domestic SNG production. The government is also offering tax incentives and low-interest loans to encourage private investments in SNG projects, with the goal of producing 60 billion cubic meters of SNG annually by 2028.

Global Synthetic Natural Gas Market Future Outlook

The Global synthetic natural gas market is expected to continue its upward growth fueled by increased investments in renewable energy projects, technological advancements in SNG production, and expanding applications across various industries, including transportation and power generation. Furthermore, the growing focus on energy security and reducing reliance on conventional natural gas will drive the adoption of SNG worldwide.

Future Trends

• Expansion of SNG Production Capacities: Over the next five years, the global market is expected to see substantial expansion in production capacities, with new facilities being commissioned in Europe, Asia, and North America. By 2028, it is estimated that global production, driven by increasing investments in clean energy projects. This expansion is expected to enhance energy security and reduce reliance on conventional natural gas.

• Technological Advancements in SNG Production: The next five years will witness technological advancements in SNG production, aimed at reducing production costs and increasing efficiency. These advancements will be driven by increased research and development investments globally. The focus will be on improving methanation and electrolysis processes, which are key to enhancing the scalability and sustainability of SNG production.