Synthetic Fuels Market by Fuel Type (Methanol to liquid (MTL), Power to liquid (PTL), Gas to liquid (GTL)), Application (Gasoline, Diesel, Kerosene), End Use (Transportation, Industrial, Chemical), and Region - Global Forecast to 2030
Updated on : August 22, 2024
Synthetic Fuels Market
The global synthetic fuels market was valued at USD 48.4 billion in 2023 and is projected to reach USD 70.1 billion by 2030, growing at 5.4% cagr from 2023 to 2030. The push for carbon neutrality and decarbonization in various sectors, including automotive, transportation, and heavy industry, is driving interest in synthetic fuels. Synthetic fuels offer a way to reduce emissions and transition away from fossil fuels, which propels the market expansion.
Attractive Opportunities in the Synthetic Fuels Market
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Synthetic Fuels Market Dynamics
Driver: Investment from private players boosting research and development
As the world seeks sustainable energy alternatives to combat climate change and enhance energy security, private players have emerged as crucial contributors to the growth and innovation in this sector. For instance, Sunfire, a German energy technology company, received private funding to scale up its power-to-liquids technology, demonstrating the potential for synthetic fuel commercialization. These investments from private players are expected to boost the synthetic fuel market during the forecast period.
Restraint: High cost of synthetic fuel
While synthetic fuels offer promising solutions for reducing greenhouse gas emissions and enhancing energy security, the high cost of production remains a significant restraint on the growth of the synthetic fuels market. . Building facilities for synthetic fuel production, especially those employing advanced technologies like carbon capture, gasification, and Fischer-Tropsch synthesis, requires substantial capital investment. Thus, higher pricing of synthetic fuel is expected to hamper the growth of market.
Opportunity: High potential of different applications of synthetic fuels
The synthetic fuels market is poised for significant growth, driven by the high potential of various applications that extend beyond traditional transportation fuels. For instance, United Airlines, Inc. is a major American airline has committed to using sustainable aviation fuels (SAFs) to reduce its carbon footprint, signaling a growing demand for synthetic aviation fuels.
Challenge: Difficulty in achieving economies of scale in synthetic fuel production
One of the significant challenges facing the synthetic fuels market is the difficulty in achieving economies of scale in production. Smaller-scale synthetic fuel production facilities often experience higher unit production costs, making it challenging to compete with larger, more established facilities. These factors act as a challenge to the further growth of synthetic fuel market.
Synthetic Fuels Market Ecosystem
Prominent companies in this market include well-established, and financially stable manufacturers of synthetic fuels. These companies have been operating in the market for several years and possess a diversified product portfolio and strong global sales and marketing networks. Prominent companies in this market include Shell (UK), SASOL (South Africa), CHN Energy Investment Group Co., Ltd. (China), Chevron Renewable Energy Group (US) and ExxonMobil Corporation (US).
Based on fuel type, the power to liquid fuel segment is projected to register highest CAGR during forecast period
The power to liquid fuel (PTL) segment is estimated to be the fastest-growing segment of the global synthetic fuels market in forecast period. PTL offer several advantages including low consumption of water and land for power to liquid production plants, as well as very low lifecycle emissions. These factores make PTL as the most sustainable option in the long term.
Based on application, the diesel segment held the largest share of global synthetic fuels market in 2022
The diesel segment accounted for the largest share of the global synthetic fuels market in 2022. Manufacturers are focusing on the development of carbon-neutral synthetic diesel produced through renewable energy sources and carbon capture and utilization (CCU) technologies. Thus formed synthetic diesel has the ability to cater to various applications, including heavy-duty transportation, shipping, and off-road vehicles, where electrification may be challenging.
Based on end use, the transportation segment is estimated to account for the largest share in 2023
The transportation segment is estimated to have the largest share of the global synthetic fuels market in 2023 in terms of value. Usage of synthetic fuels has the advantage of producing fewer emissions than traditional aviation fuels. This is essential for reducing the carbon footprint of the aviation industry. Moreover, synthetic fuel can also be employed in internal combustion engines, such as those found in cars, trucks, and ships, without significant modifications. These factors are anticipated to attract consumers towards synthetic fuels during forecast period.
Based on region, Asia Pacific region is projected to be the largest region for synthetic fuels market during the forecast period
Asia-Pacific has been witnessing high growth in the synthetic fuels market and is projected to be the largest region from 2023 to 2030. Several countries in the region such as India, China, Japan, South Korea, and Australia, are actively investing in synthetic fuel technologies. In 2022, Japan's state-backed New Energy and Industrial Technology Development Organization (NEDO) granted 114.5 billion yen (USD 892 million) to support the development of new fuels including synthetic ones that emit lower carbon dioxide. These factors are expected to boost the synthetic fuels market in Asia Pacific.
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Synthetic Fuels Market Players
Shell (UK), SASOL (South Africa), CHN Energy Investment Group Co., Ltd. (China), Chevron Renewable Energy Group (US), ExxonMobil Corporation (US), TotalEnergies (France), Neste (Finland), Petro SA (South Africa), Linde Engineering (Ireland), Synthesis Energy Systems, Inc. (US), Dakota Gasification Company (US), TOPSOE (Denmark), MaireTecnimont S.p.A. (Italy), Sunfire GmbH (Germany), RWE (Germany), QatarEnergy (Qatar), Inner Mongolia Yital Coal Co., Ltd. (China) and others are among the major players leading the market through their innovative offerings, enhanced production capacities, and efficient distribution channels.
Synthetic Fuels Market Report Scope
Report Metric |
Details |
Market Size Value in 2023 |
USD 48.4 billion |
Revenue Forecast in 2030 |
USD 70.1 billion |
CAGR |
5.4% |
Market Size Available for Years |
2019 to 2030 |
Base Year Considered |
2022 |
Forecast Period |
2023–2030 |
Forecast Units |
Value (USD Million/Billion) |
Segments Covered |
Fuel Type, Application, End Use, and Region |
Geographies Covered |
North America, Europe, Asia Pacific, Rest of World (South America, and the Middle East & Africa) |
Companies Covered |
Shell (UK), SASOL (South Africa), CHN Energy Investment Group Co., Ltd. (China), Chevron Renewable Energy Group (US), ExxonMobil Corporation (US), TotalEnergies (France), Neste (Finland), Petro SA (South Africa), Linde Engineering (Ireland), Synthesis Energy Systems, Inc. (US), Dakota Gasification Company (US), TOPSOE (Denmark), MaireTecnimont S.p.A. (Italy), Sunfire GmbH (Germany), RWE (Germany), QatarEnergy (Qatar), Inner Mongolia Yital Coal Co., Ltd. (China) and others. |
This research report categorizes the synthetic fuels market based on type, textile type, application, and region.
Based on fuel type, the synthetic fuels market has been segmented as follows:
- Gas to Liquid Fuel (GTL)
- Methanol to Liquid (MTL)
- Power to Liquid Fuel (PTL)
- Others (BTL AND CTL)
Based on application, the synthetic fuels market has been segmented as follows:
- Gasoline
- Diesel
- Kerosene
Based on end use, the synthetic fuels market has been segmented as follows:
- Transportation
- Industrial
- Chemical & Others
Based on the region, the synthetic fuels market has been segmented as follows:
-
Asia Pacific
- China
- India
- Japan
- South Korea
- Rest of Asia Pacific
-
Europe
- Germany
- France
- Uk
- Russia
- Rest of Europe
-
North America
- US
- Canada
- Mexico
-
Middle East & Africa
- Middle East & Africa
- South America
Recent Developments
- In April 2023, Envalior started off as a brand-new business, one of the major global providers of engineering materials. DSM Engineering Materials (DEM) and LANXESS High Performance Materials (HPM), two highly complementary market leaders in engineering materials, have merged to become Envalior, which is owned by Advent International (around 60% share), a worldwide private equity firm, and LANXESS (around 40% share), a manufacturer of specialty chemicals.
- In February 2023, Asahi Kasei's Board of Directors approved a Final Agreement regarding the transfer of business related to the development, production, and sale of spunbond nonwoven products to a newly formed joint venture company, which will be established by joint incorporation-type company separation (The Separation) with Mitsui Chemicals, Inc. The Separation is expected to take place on October 2, 2023. Through this joint venture both the companies aim to strengthen their spunbond business in Asia.
Frequently Asked Questions (FAQ):
What is the key driver for the synthetic fuels market?
Investment from private players boosting research and development is the major driving factor for synthetic fuels market.
Which region is expected to register the highest CAGR in the polyamide market during forecast period?
The synthetic fuels market in North America is estimated to register the highest CAGR during forecast period.
What is the major end use of synthetic fuels?
The transportation segment is the major end use of synthetic fuels. It is projected to grow due to the rise in consumption from aviation sector.
Who are the major manufacturers of polyamides?
The key players operating in the market include Shell (UK), SASOL (South Africa), CHN Energy Investment Group Co., Ltd. (China), Chevron Renewable Energy Group (US) and ExxonMobil Corporation (US).
What is the total CAGR expected to record for the synthetic fuels market during 2023-2030?
The market is expected to record a CAGR of 5.4% from 2023-2030. .
To speak to our analyst for a discussion on the above findings, click Speak to Analyst
The study involved four major activities in estimating the current market size of synthetic fuels. Exhaustive secondary research was done to collect information on the market, the peer market, and the parent market. The next step was to validate these findings, assumptions, and sizes with industry experts across the value chain of synthetic fuels through primary research. Both top-down and bottom-up approaches were employed to estimate the complete market size. After that, market breakdown and data triangulation were used to estimate the size of the segments and sub-segments of the market.
Secondary Research
The research methodology used to estimate and forecast the access control market begins with capturing data on revenues of key vendors in the market through secondary research. BusinessWeek, Factiva, World Bank, and Industry Journals, such as Hoovers, Bloomberg BusinessWeek, Factiva, World Bank, and Industry Journals, were referred to for identifying and collecting information for this study. These secondary sources included annual reports, press releases & investor presentations of companies; white papers; certified publications; articles by recognized authors; notifications by regulatory bodies; trade directories; and databases. Vendor offerings have also been taken into consideration to determine market segmentation.
Primary Research
The synthetic fuels market comprises several stakeholders, such as such as raw material suppliers, technology support providers, synthetic fuels manufacturers, and regulatory organizations in the supply chain. Various primary sources from both the supply and demand sides of the market were interviewed to obtain qualitative and quantitative information. Primary sources from the supply side included industry experts such as Chief Executive Officers (CEOs), vice presidents, marketing directors, technology and innovation directors, and related key executives from various key companies and organizations operating in the synthetic fuels market. Primary sources from the demand side included directors, marketing heads, and purchase managers from various sourcing industries. Following is the breakdown of the primary respondents:
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Market Size Estimation
Both the top-down and bottom-up approaches were used to estimate and validate the total size of the synthetic fuels market. These methods were also used extensively to determine the size of various sub-segments in the market. The research methodology used to estimate the market size included the following:
- The key players were identified through extensive primary and secondary research.
- The value chain and market size of the synthetic fuels market, in terms of value, were determined through primary and secondary research.
- All percentage shares, splits, and breakdowns were determined using secondary sources and verified through primary sources.
- All possible parameters that affect the market covered in this research study were accounted for, viewed in extensive detail, verified through primary research, and analyzed to obtain the final quantitative and qualitative data.
- The research included the study of reports, reviews, and newsletters of top market players, along with extensive interviews for opinions from key leaders, such as CEOs, directors, and marketing executives.
Global Synthetic Fuels Market Size: Bottom-Up Approach
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Global Synthetic Fuels Market Size: Top-Down Approach
Data Triangulation
After arriving at the overall market size using the market size estimation processes as explained above, the market was split into several segments and sub-segments. To complete the overall market engineering process and arrive at the exact statistics of each market segment and subsegment, the data triangulation and market breakdown procedures were employed, wherever applicable. The data was triangulated by studying various factors and trends from both the demand and supply sides in the oil & gas sector.
Market definition
Synthetic fuel, also known as synfuel or synthetic petroleum, refers to a type of fuel that is produced from non-petroleum sources through chemical processes. Unlike traditional fossil fuels such as gasoline, diesel, or natural gas, which are derived from crude oil and natural gas reservoirs, synthetic fuels are artificially created. They are designed to have similar properties and characteristics to conventional fossil fuels, making them compatible with existing combustion engines and infrastructure.
Synthetic fuels can be produced from a variety of feedstocks, including coal, natural gas, biomass, and even carbon dioxide (CO2) captured from industrial processes or the atmosphere. The production of synthetic fuels typically involves a series of chemical reactions, such as Fischer-Tropsch synthesis or methanol-to-gasoline conversion, to transform these feedstocks into liquid or gaseous fuels. These fuels can then be used in vehicles, aircraft, power generation, and other applications where conventional fossil fuels are traditionally utilized.
Key Stakeholders
- Raw material manufacturers
- Technology support providers
- Manufacturers of synthetic fuel
- Traders, distributors, and suppliers
- Regulatory Bodies and Government Agencies
- Research & Development (R&D) Institutions
- End-use Industries
- Consulting Firms, Trade Associations, and Industry Bodies
- Investment Banks and Private Equity Firms
Report Objectives:
- To analyze and forecast the market size of synthetic fuels in terms of value
- To provide detailed information regarding the major factors (drivers, restraints, challenges, and opportunities) influencing the regional market
- To analyze and forecast the global synthetic fuels market on the basis of fuel type, application, end use, and region
- To analyze the opportunities in the market for stakeholders and provide details of a competitive landscape for market leaders
- To forecast the size of various market segments based on four major regions: North America, Europe, Asia Pacific, Rest of World (South America, and the Middle East & Africa), along with their respective key countries
- To track and analyze the competitive developments, such as acquisitions, partnerships, investments, and expansions in the market
- To strategically profile the key players and comprehensively analyze their market shares and core competencies
Available Customizations:
With the given market data, MarketsandMarkets offers customizations according to the client-specific needs.
The following customization options are available for the report:
- Additional country-level analysis of the synthetic fuels market
- Profiling of additional market players (up to 5)
Product Analysis
- Product matrix, which gives a detailed comparison of the product portfolio of each company.
Growth opportunities and latent adjacency in Synthetic Fuels Market