Report Code : A74859
The global synthetic methane market is expected to possess high growth potential in the coming years owing to factors such as rapid energy integration, carbon capture & utilization, sector decarburization, energy storage, and flexibility of utilization. In addition, sand casting serves as an excellent process used for maintaining the finish and dimension of equipment by using relatively less energy. Moreover, synthetic methane offers a pathway to achieve sustainable development and climate goals. By reducing reliance on fossil fuels and enabling the utilization of renewable or captured carbon dioxide resources, the synthetic methane industry can contribute to mitigating climate change and fostering a sustainable energy transition. Thus, synthetic methane is gaining high traction in the recent years. However, outbreak of the COVID-19 pandemic has negative impacts on the global synthetic methane market.
Yerukola Eswara Prasad - Manager
Materials and Chemicals at Allied Market Research
According to a new report published by Allied Market Research, titled, “Synthetic Methane Market," The synthetic methane market was valued at $89.7 million in 2022, and is estimated to reach $334.5 million by 2032, growing at a CAGR of 14.1% from 2023 to 2032.
Synthetic methane refers to artificially produced form of methane gas (CH4) that closely resembles natural gas in its chemical composition and properties. It is generated through processes that utilize renewable energy sources or involve carbon capture and utilization technologies. The production of synthetic methane aims to provide a low-carbon alternative to natural gas, reducing greenhouse gas emissions and contributing to sustainability goals.
Renewable energy transition refers to the process of shifting from reliance on non-renewable energy sources, such as fossil fuels (coal, oil, and natural gas), to utilizing renewable energy sources that are naturally replenished and have a lower environmental impact. The goal of this transition is to reduce greenhouse gas emissions, combat climate change, and achieve a more sustainable and resilient energy system.
Renewable energy sources include solar power, wind power, hydropower, biomass, and geothermal energy. These sources are abundant and can be harnessed to generate electricity or produce heat without depleting finite resources or releasing significant amounts of carbon dioxide into the atmosphere.
As countries and industries strive to reduce their carbon footprint and shift toward renewable energy sources, the need for renewable alternatives to fossil fuels is expected to grow simultaneously. Synthetic methane offers a viable solution for replacing natural gas, which is a major contributor to greenhouse gas emissions. This factor acts as one of the key drivers responsible for the growth of the synthetic methane market.
By utilizing CO2 captured from industrial processes or directly from the atmosphere, synthetic methane production can contribute to reduce greenhouse gas emissions. It provides an opportunity to recycle carbon emissions and convert them into a useful energy source, minimizing environmental impact. This factor further augments the growth of the synthetic methane market.
However, the process of converting renewable electricity into synthetic methane involves multiple energy conversion steps, such as electrolysis and methanation, which can result in energy losses. Thus, the overall efficiency of the conversion process needs to be improved to make synthetic methane production more energy-efficient. This factor has restrained customers from using synthetic methane as compared to natural gas extracted methane, thus hampering the growth of the synthetic methane market.
On the contrary, synthetic methane can be a key element in decarbonizing sectors that heavily rely on fossil fuels, such as transportation, heating, and industrial processes. By replacing natural gas or diesel with synthetic methane, these sectors can reduce their carbon footprint without requiring significant changes to infrastructure or equipment. This factor is anticipated to create lucrative opportunities for the synthetic methane market in the coming future.
The global synthetic methane market is segmented into source, application, and region. By source, the market is segregated into direct air capture and hydrogen and carbon dioxide. The hydrogen and carbon dioxide segment dominated the global market, in terms of revenue in 2022. The production of synthetic methane from hydrogen and carbon dioxide offers a means of utilizing CO2 as a feedstock and converting renewable hydrogen into a versatile energy carrier. It enables the integration of renewable energy sources into existing natural gas infrastructure and provides a pathway for decarbonization in sectors that heavily rely on natural gas.
Moreover, increase in utilization of carbon and hydrogen for producing synthetic methane may enhance the carbon capturing activities, thus reducing the global carbon footprint. This factor is the major key market trend in the synthetic methane market for hydrogen and carbon dioxide source.
On the basis of application, the market is fragmented into fuel, hydrogen transport carrier, industrial, and others. By application, the fuel segment dominated the global market, in terms of revenue in 2022 with 58.7% share in the global market. The use of synthetic methane as a fuel offers several advantages, including reduced greenhouse gas emissions, compatibility with existing natural gas infrastructure, and versatility across different sectors.
However, it is important to ensure the production of synthetic methane is sourced from renewable energy and that proper infrastructure and safety measures are in place to support its utilization as a fuel. This factor may act as a key driver responsible for the growth of the synthetic methane market for fuel applications. Moreover, the government of both developed and developing economies are increasingly focusing on production of synthetic fuels such as bio-diesel and synthetic methane. This may further augment the demand for synthetic methane market for fuel applications.
Region wise, the synthetic methane market is analyzed across North America, Europe, Asia-Pacific, and LAMEA. The Asia-Pacific synthetic methane market size is projected to grow at the highest CAGR during the forecast period, and accounted for a major market share in 2022. China has a high demand for energy, and it is constantly seeking to diversify its energy sources to reduce dependence on imported fossil fuels. Synthetic methane, produced from renewable sources or through carbon capture and utilization (CCU) technologies, offers a domestically producible and sustainable energy option, which can enhance China's energy security and reduce reliance on imported fuels. This fuels the growth of the synthetic methane market in the region.
In addition, India has diverse energy needs, including rural electrification and decentralized energy solutions, wherein synthetic methane plays a role in meeting these requirements. It can be produced locally from various sources such as agricultural waste, biomass, or solar power, providing clean and reliable energy options for off-grid or remote areas where infrastructure for traditional energy sources may be limited. Thus, the abovementioned factors boost the growth of the synthetic methane market in Asia-Pacific.
Key players operating in the global synthetic methane market include CLARIANT, Air Liquide, Terega, TransTech Energy, LLC, OSAKA GAS CO.,LTD, Zentrum für Sonnenenergie- und Wasserstoff-Forschung Baden-Württemberg, Dakota Gasification Company, Mitsubishi Corporation, KADATEC s.r.o., and MAN Energy Solutions.
COVID-19 analysis
The pandemic has led to a decline in energy demand in many parts of the world due to lockdowns, travel restrictions, and economic slowdown. As a result, the demand for synthetic methane, which is primarily used as a fuel or feedstock, was negatively impacted. Reduced industrial activities, transportation restrictions, and decreased consumer spending contributed to decline in demand for synthetic methane. Moreover, the pandemic caused disruptions in global supply chains, including those related to energy and chemical industries. Manufacturing facilities and plants involved in the production of synthetic methane experienced temporary shutdowns, reduced capacity, or delays in operations due to labor shortages, restrictions on movement, or supply chain disruptions. These factors impacted the overall production and availability of synthetic methane.
In addition to this, government policies and investments played a crucial role in shaping the synthetic methane industry. During the pandemic, governments worldwide focused on managing the health crisis and supporting affected sectors, which diverted attention and resources away from clean energy initiatives, including synthetic methane. However, some governments have used the post-pandemic recovery period as an opportunity to promote sustainable and low-carbon technologies, which could provide a boost to the synthetic methane industry.
On the contrary, factors such as government policies for the promotion of synthetic fuels, sustainability goals, and investments in clean energy technologies have fueled the growth of the synthetic methane market post pandemic.
Key findings of the study
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Synthetic Methane Market by Source (Direct air capture, Hydrogen and carbon dioxide), by Application (Fuel, Hydrogen Transport Carrier, Industrial, Others): Global Opportunity Analysis and Industry Forecast, 2023-2032
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