Compressed Natural Gas (CNG) Market Rising With Growth In New Technology Trends Research By 2020


Global compressed natural gas (CNG) market is anticipated to reach USD 129.77 billion by 2020, according to a new study by Grand View Research, Inc. Growth of global natural gas vehicles (NGVs) industry coupled with increased automobile fuel efficiency attributed by CNG is anticipated to remain a key driving factor for the global market. Government subsidiaries in form of financial incentives particularly in Asia Pacific and Latin America is also expected to have a positive impact on the market growth. Positive outlook on exploration of unconventional resources including shale gas particularly in U.S. and China is expected to provide growth opportunities for market participants. High initial investment for CNG automobile storage tanks is expected to remain a key challenge for market participants over the forecast period. Increasing R&D expenditure by automobile manufactures on developing dual fuel engines is expected to remain a critical success factor over the next six years.
Non-associated gas emerged as leading source for CNG and accounted for 89.9% of total market volume in 2013. Increasing drilling activities particularly in Middle East is expected to ensure continuous supply of non-associated gases for CNG over the forecast period. Unconventional methods are expected to be the most lucrative source segment growing at an estimated CAGR of 28% from 2014 to 2020.
The global CNG market is highly fragmented owing to large number industry participants spread across various regions. Regional market players compete on the basis of price differentiation and service levels. Key industry participants include Indraprastha Gas Limited (IGL), National Iranian Gas Company, Mahanagar Gas Limited (MNGL), and J-W Power Company. Other major players include OAO Gazprom, Trillium CNG, GNVert, ANGI Energy Systems Inc., NeoGas Inc., China Natural Gas Inc. and J-W Power Company.
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The shift in trend towards adoption of unconventional transportation fuels to reduce carbon footprints is expected to remain a key driving factor for global compressed natural gas (CNG) market. CNG emerged used as a substitute transportation fuel for gasoline, diesel and LPG on account of low emission of greenhouse gases (GHG) production on combustion. CNG can be used in traditional internal combustion engines that have been originally designed or modified for gasoline/diesel which has been further propelling its market growth.
Further key findings from the study suggest:
  • Global CNG demand was 61,668 MCM in 2013 and is expected to reach 108,957.9 MCM by 2020, growing at a CAGR of 8.5% from 2014 to 2020.
  • Light duty vehicles (LDV) were the largest CNG consuming segment and accounted for 48.3% of total market volume in 2013. Growth of passenger cars particularly in emerging markets of BRICS is expected to drive this segment. LDV is also expected to witness highest growth rate over the forecast period. The segment is expected to grow at an estimated CAGR of 9.1% from 2014 to 2020.
  • Asia Pacific was the leading regional CNG market and is expected to continue its dominance over the next six years in the global market. The region accounted for 46.6% of total market volume in 2013. Positive outlook on automotive industry coupled with government support to promote the use of alternative transportation fuel particularly in China and India is expected to drive the regional CNG market. Central & South America is expected to be the fastest growing regional market for CNG at an estimated CAGR of 17% from 2014 to 2020.
  • Highly fragmented CNG industry participants compete on the basis of price differentiation across various regions. Major industry participants operating in the global CNG market include National Iranian Gas Comp, Indraprastha Gas Ltd (IGL), China Natural Gas Inc and Mahanagar gas Ltd (MNGL).
The emergence of CNG as low-cost fuel coupled with growing energy demands is expected to have a positive influence on global CNG market growth. It costs lower than traditional fuels such as gasoline and diesel and produce energy equivalent on combustion. Exploration of shale gas and other non-conventional sources of energy particularly in North America have brought down global CNG prices. Increasing government regulations on account of environmental concern is expected to significantly have a significant effect on global CNG market over the next six years. Increasing monetary assistance in the form of subsidies coupled with growing awareness to reduce pollution by are some major factors promoting its use in automobiles in regions such as Middle East, Asia Pacific and Latin America. The majority of the governments have been making efforts to convert gasoline based public transport to CNG.
Placement and costs of CNG storage tanks in automobiles coupled with a limited number of filling stations is expected to remain a key challenge for market participants. Traditional gasoline vehicles require additional CNG tanks storage space in trunks usually utilizing the free space. Initial installation cost of storage tanks are higher than traditional gasoline engines are already installed in automobiles. With increasing CNG powered automobile, fuel tanks costs are gradually decreasing, and efforts are being made to bring costs to an acceptable level. In addition, automobiles manufactures have been providing in-build CNG installed tanks under vehicles body and providing free space for trunks. Increasing R&D investment on dual fuel technology engines by leading automobile manufacturers is expected to open up new gates for market participants.
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The global CNG market can be segmented based on the sources of extraction. Major sources include extraction of associated gases, non-associated gases, and unconventional methods. Non-associated gas reservoir emerged as a leading source for CNG production. Increasing exploration of non-associated and unconventional gas reservoirs is expected to drive CNG market over the next six years. Associated gas reservoir formed the second largest share of production. It is expected to show moderate growth rates over the forecast period owing to presence of wet gases. Unconventional methods including LNG  is expected to be the fastest-growing source production over the next six years owing to growing global LNG fleet coupled with increasing installations of re-gasification facilities in Asia Pacific particularly in countries such as China and India.
Grand View Research has segmented the CNG market on the basis of source, application:
Global Compressed Natural Gas (CNG) Source Outlook (Volume, MCM; Revenue, USD Billion, 2012 - 2020)
  • Non-Associated Gas
  • Associated Gas
  • Unconventional Methods
Global Compressed Natural Gas (CNG) Application Outlook (Volume, MCM; Revenue, USD Billion, 2012 - 2020)
  • Light Duty Vehicles
  • Medium/Heavy Duty Buses
  • Medium/Heavy Duty Trucks
  • Others
On the basis of application, CNG market is classified as light-duty vehicles (LDV), heavy/light duty buses and heavy/light duty trucks. LDV emerged as dominant application for CNG market and accounts for over half of the total CNG market. LDV is also expected to witness the highest growth rate over the next six years owing to global increase in production of natural gas vehicles (NGVs) coupled with demand for clean fuels in automobiles. Numerous LDV manufacturers such as General Motors, Fiat, Toyota, Suzuki, and Honda have introduced in-built CNG fuel tanks owing to increase efficiency of vehicle and low maintenance costs. In addition, existing gasoline fuel automobiles can also be converted to dual fuel technology by installing CNG kits which are further expected to drive CNG demand in LDV. Major public transportation vehicles specifically in Asia Pacific and Latin America are being converted to CNG based fuel systems owing to their maximum fuel consumption and fast recovery of the initial capital invested.
About Grand View Research
Grand View Research, Inc. is a U.S. based market research and consulting company, registered in the State of California and headquartered in San Francisco. The company provides syndicated research reports, customized research reports, and consulting services. To help clients make informed business decisions, we offer market intelligence studies ensuring relevant and fact-based research across a range of industries, from technology to chemicals, materials and healthcare.


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