Synthetic fuels involve creating hydrocarbon chains from basic elements to mimic or improve upon traditional petroleum fuels. Synthetic fuels are alternatives to petroleum fuels derived from raw materials such as coal, natural gas or biomass through various processes like gasification, pyrolysis and Fischer-Tropsch synthesis. Synthetic fuels offer certain advantages over petroleum fuels like having lower carbon intensity and can be derived from various feedstocks. The global demand for liquid fuels is ever rising, while petroleum sources are limited. Synthetic fuels provide a viable option to meet this energy need along with environmental benefits.
The global Synthetic Fuel Market is estimated to be valued at Us$ 6.46 Mn in 2024 and is expected to exhibit a CAGR Of 5.1% over the forecast period 2024 To 2031, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the major trends in the synthetic fuel market is growing investment in renewable synthetic fuel production. Companies are investing in research and pilot projects to produce synthetic fuels from renewable sources using renewable energy and captured carbon. For instance, Porsche is developing renewable synthetic fuels from CO2 captured from the atmosphere along with renewable hydrogen produced using wind power. The key advantage is that existing vehicles and infrastructure can run on such renewable synthetic fuels with little or no modifications required. This is expected to boost commercial production and adoption of synthetic fuels in the coming years.
Threat of new entrants: The threat of new entrants in the synthetic fuel market is moderate. High capital requirements and the need for technological expertise pose barriers for new companies.
Bargaining power of buyers: The bargaining power of buyers is high due to the availability of alternatives to synthetic fuels from conventional oil and gas resources. However, environmental regulations are increasing the demand for cleaner fuel options.
Bargaining power of suppliers: A few large companies dominate synthetic fuel production, giving them significant bargaining power over raw materials and production inputs.
Threat of new substitutes: The threat from new substitutes is moderate as synthetic fuels can be used directly in vehicles and equipment without any modifications. However, electric vehicles may emerge as strong substitutes in the long run.
Competitive rivalry: Firms compete based on production efficiency, technology, and customer service. Major players strive to differentiate their products and establish strategic partnerships.
The Global Synthetic Fuel Market Demand is expected to witness high growth over the forecast period supported by stringent environmental regulations and the need to reduce dependence on fossil fuels. The global Synthetic Fuel Market is estimated to be valued at US$ 6.46 Mn in 2024 and is expected to exhibit a CAGR of 5.1% over the forecast period 2024 to 2031.
Regional analysis –
North America is projected to dominate the global synthetic fuel market during the forecast period. Major factors include the presence of key producers, focus on developing clean and affordable transportation fuels, and government initiatives to enhance energy security by diversifying fuel sources.
Key players –
Key players operating in the Synthetic Fuel Market include CRI/Criterion Inc., General Electric Company, Koninklijke DSM N.V., Lanzatech, Virent Inc., and Anthropic. CRI/Criterion focuses on gas-to-liquid technology that converts natural gas into synthetic fuels and chemicals. Virent develops patented BioForming technology to produce high-octane gasoline and diesel fuel from biomass and other waste resources.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it