Synthetic Natural Gas Market

Market Definition

The market includes the production of methane-rich gas from feedstocks like coal, biomass, or municipal solid waste through thermochemical processes such as gasification and methanation. This gas mirrors the properties of conventional natural gas and is primarily used in power generation, heating, and as a feedstock in chemical manufacturing. 

The report provides a comprehensive analysis of key drivers, emerging trends, and the competitive landscape expected to influence the market over the forecast period.

Synthetic Natural Gas Market Overview

The global synthetic natural gas market size was valued at USD 23.38 billion in 2024 and is projected to grow from USD 28.18 billion in 2025 to USD 120.35 billion by 2032, exhibiting a CAGR of 23.05% during the forecast period. 

The market growth is supported by the rising demand for cleaner alternatives to conventional natural gas and the need for energy diversification. Integration of biomass and waste-to-gas technologies, along with innovation in methanation and gasification technologies, is driving advancements in production efficiency and long-term scalability.

Major companies operating in the synthetic natural gas industry are Air Liquide S.A., Linde PLC, Sasol Limited, Dakota Gasification Company, TotalEnergies SE, Shell plc, ExxonMobil, Chevron Corporation, BASF, Air Products and Chemicals, Inc., Siemens, Technip Energies N.V., Verbio SE, MAN Energy Solutions SE, and EnviTec Biogas AG.

The global shift toward low-carbon energy sources is accelerating the growth of the market. With rising regulatory pressure on emissions and fossil fuel dependency, industries are turning to synthetic alternatives that offer cleaner combustion and compatibility with existing infrastructure. 

Synthetic natural gas allows for decarbonization without requiring major pipeline changes, supporting long-term energy transition goals while meeting environmental standards set by governments and international frameworks.

• In March 2025, Finland's EnergySampo CCU consortium announced the commencement of synthetic methane production at Westenergy's waste-to-energy site in Mustasaari. The plant captures CO₂ from flue gases and combines it with green hydrogen to produce liquefied synthetic natural gas (LSNG), aligning with the EU's "Fit for 55" goals and promoting carbon-negative district heating.

Key Highlights

1. The synthetic natural gas industry size was valued at USD 23.38 billion in 2024.
2. The market is projected to grow at a CAGR of 23.05% from 2025 to 2032.
3. Asia Pacific held a market share of 36.12% in 2024, with a valuation of USD 8.44 billion.
4. The coal-based segment garnered USD 10.83 billion in revenue in 2024.
5. The thermal gasification segment is expected to reach USD 46.70 billion by 2032.
6. The industrial feedstock/heating segment secured the largest revenue share of 38.32% in 2024.
7. The market in North America is anticipated to grow at a CAGR of 23.13% during the forecast period.

Market Driver

Integration of Biomass and Waste-to-Gas Technologies

The growing adoption of thermochemical technologies that convert biomass and municipal solid waste into gas is expanding the synthetic natural gas market. Countries facing waste disposal issues are investing in synthetic natural gas (SNG) plants that use refuse-derived fuel. This not only addresses waste management but creates a sustainable energy stream. 

With increasing support for circular economy practices, synthetic gas from renewable sources is becoming more commercially viable, reinforcing market expansion globally.

• In January 2024, Advanced Biofuel Solutions Ltd (ABSL), a developer of advanced biofuels from waste, announced the successful initial production from its 22 GWh waste-to-syngas line at the demonstration facility in Swindon. The plant operates using ABSL’s patented RadGas technology, which integrates a gasifier, electric arc furnace, and waste heat boiler into a highly efficient and reliable system. This process converts household waste and biomass residues into clean synthesis gas (syngas), free from tars and particulates.

Market Challenge

High Capital Investment and Complex Technology

A significant challenge limiting the market growth is the high capital investment required for setting up production facilities, coupled with the complexity of gasification and methanation technologies. These factors make initial project costs substantial and deter smaller players.

Key market players are focusing on technological innovation to improve efficiency and reduce operational costs. Many are forming strategic partnerships and joint ventures to share financial risks. Additionally, firms are investing in modular and scalable plant designs, allowing gradual expansion and better cost management, which supports broader market adoption.

Market Trend

Innovations in Methanation and Gasification Technologies

Advancements in gasification and catalytic methanation have improved the efficiency and economics of SNG production. New reactor designs, improved catalyst lifespans, and modular production units are reducing the cost of synthetic gas facilities. 

These innovations are expanding the commercial feasibility of small-to-medium-scale projects, especially in remote or off-grid areas. Technological progress is expanding the synthetic natural gas market by lowering entry barriers and increasing scalability.

• In February 2025, a pilot plant employing nickel-based catalysts for CO₂ methanation was evaluated under the RdS Research Program in collaboration with ENEA (Italian Agency for New Technologies, Energy and Sustainable Economic Development) and Sapienza University of Rome, and funded by the Italian Ministry of Environment and Energy Security. The study demonstrated enhanced efficiency in converting CO₂ into synthetic methane, marking a significant advancement in catalytic methanation technology that supports more cost-effective and scalable SNG production.

Synthetic Natural Gas Market Report Snapshot

Segmentation	Details
By Feedstock	Coal-based, Waste-based, Biomass-based
By Production Technology	Thermal Gasification, Anaerobic Digestion & Fermentation, Power-to-Gas (P2G) Methanation, Others
By Application	Transportation Fuel, Power Generation, Industrial Feedstock/Heating, Others
By Region	North America: U.S., Canada, Mexico
	Europe: France, UK, Spain, Germany, Italy, Russia, Rest of Europe
	Asia-Pacific: China, Japan, India, Australia, ASEAN, South Korea, Rest of Asia-Pacific
	Middle East & Africa: Turkey, U.A.E., Saudi Arabia, South Africa, Rest of Middle East & Africa
	South America: Brazil, Argentina, Rest of South America

Market Segmentation

• By Feedstock (Coal-based, Waste-based, and Biomass-based): The coal-based segment earned USD 10.83 billion in 2024, due to abundant coal reserves, established gasification technologies, and the ability to produce SNG at a competitive cost compared to alternative feedstock.
• By Production Technology (Thermal Gasification, Anaerobic Digestion & Fermentation, Power-to-Gas (P2G) Methanation, and Others): The thermal gasification segment held 38.33% share of the market in 2024, due to its proven efficiency in converting diverse feedstocks into high-quality syngas at a competitive cost.
• By Application (Transportation Fuel, Power Generation, Industrial Feedstock/Heating, and Others): The industrial feedstock/heating segment is projected to reach USD 43.87 billion by 2032, owing to its widespread use in industries requiring reliable, high-quality fuel for consistent heating and chemical processes.

Synthetic Natural Gas Market Regional Analysis

Based on region, the market has been classified into North America, Europe, Asia Pacific, Middle East & Africa, and South America.

Asia Pacific synthetic natural gas market share of around 36.12% in 2024, with a valuation of USD 8.44 billion. Asia Pacific generates large volumes of biomass and agricultural residues, presenting a valuable feedstock source for SNG production. The availability of such waste supports cost-effective conversion processes like gasification and methanation. 

Moreover, public and governmental focus on improving air quality in rapidly growing cities has increased the demand for cleaner fuels. Efforts to reduce urban pollution levels stimulate investments in SNG technologies, boosting the market in Asia Pacific, specifically the densely populated urban centers in the region.

• In January 2025, the Hubballi-Dharwad Municipal Corporation in Karnataka, India, approved a plan to establish a compressed biogas (CBG) plant. Bharat Petroleum Corporation Limited (BPCL) will set up the facility to process 144 tonnes of wet waste daily, producing five tonnes of CBG per day, contributing to cleaner fuel alternatives in urban areas.

The synthetic natural gas industry in North America is poised for significant growth at a robust CAGR of 12.85% over the forecast period. The region benefits from well-developed technology infrastructure and expertise in gasification & synthetic gas production. 

Companies in North America have access to cutting-edge technologies and strong R&D support, which improve efficiency and reduce costs of SNG production. This technological advantage contributes significantly to the growth of the market by making operations more reliable and commercially viable.

• In September 2024, the North Dakota Public Service Commission approved Cerilon's USD 3.2 billion gas-to-liquids (GTL) plant near Trenton, North Dakota. This facility aims to convert natural gas into synthetic fuels, enhancing the region's energy infrastructure.

Regulatory Frameworks

• The U.S. Environmental Protection Agency (EPA) regulates methane emissions under the Clean Air Act, directly impacting SNG production. Updated rules targeting methane leaks from oil & gas facilities were upheld by the U.S. Supreme Court in 2024.
• The European Union’s Methane Strategy sets binding standards for methane emissions in energy systems, impacting SNG production. The regulation mandates monitoring, reporting, and mitigation of emissions across gas value chains. It also promotes the blending of renewable and synthetic gases into national grids. These regulations support the EU Green Deal and Fit for 55 initiatives, driving the shift toward low-carbon fuels like SNG across member states.
• China governs SNG through national standards such as GB/T 37178-2018, which sets the specifications for coal-based SNG used in vehicles. The National Energy Administration encourages the use of SNG to replace coal in urban heating and power generation. China's 14th Five-Year Plan promotes low-carbon energy systems, further accelerating investment in SNG infrastructure, particularly for integrated coal gasification and renewable energy conversion technologies.
• Japan’s SNG framework supports carbon-neutral fuels through regulatory pathways tied to its 2050 decarbonization plan. The Japan Gas Association promotes “clean gas certificates” for tracking and certifying low-carbon gases, including e-methane and biogas. By 2030, Japan aims to blend more than 1% synthetic methane into city gas networks. The strategy is backed by government subsidies and policies encouraging carbon capture and green hydrogen-based SNG production.

Competitive Landscape

Market players are adopting strategies such as research and development, strategic partnerships, and technological advancements to strengthen their position and drive growth. Collaborations between companies help pool resources and expertise, accelerating innovation in SNG production and distribution. 

Investment in advanced methanation and gasification technologies improves efficiency and reduces costs, making SNG more competitive. These combined efforts enhance scalability and market reach, contributing significantly to the overall expansion of the market.

• In March 2024, TotalEnergies partnered with seven major international companies—including Engie, Mitsubishi Corporation, Osaka Gas, Sempra Infrastructure, TES, Tokyo Gas, and Toho Gas—to form the "e-NG Coalition." This alliance aims to promote the development and use of e-natural gas (e-NG), a synthetic gas produced from renewable hydrogen and CO₂, leveraging existing infrastructure for transportation and usage.

List of Key Companies in Synthetic Natural Gas Market:

• Air Liquide S.A.
• Linde PLC 
• Sasol Limited
• Dakota Gasification Company
• TotalEnergies SE
• Shell plc
• ExxonMobil
• Chevron Corporation
• BASF
• Air Products and Chemicals, Inc.
• Siemens
• Technip Energies N.V.
• Verbio SE
• MAN Energy Solutions SE
• EnviTec Biogas AG

Recent Developments (Expansion/Joint Venture/Agreements)

• In May 2025, Indonesian state-owned coal miner Bukit Asam announced a planned investment of USD 3.1 billion to develop a facility dedicated to coal-to-SNG conversion. The project aims to process approximately 8.4 million tonnes of low-grade coal with a calorific value of around 3,700 kcal/kg GAR, targeting a production capacity of 240 billion British thermal units (BBtu) per day, equivalent to 1.6 million metric tonnes per year.
• In March 2025, GAIL (India) Limited and Coal India Limited announced the launch of their joint venture, Coal Gas India Limited, aimed at advancing SNG production. The partnership focuses on building and upgrading infrastructure required for coal-to-SNG conversion. Key areas include captive coal mining, coal beneficiation, coal imports, equipment sourcing, and the establishment of essential processing and support facilities to support large-scale SNG development.
• In October 2024, Linde Engineering was selected by NEXTCHEM to supply its HISORP CC carbon capture technology for ADNOC's Hail and Ghasha project in the U.A.E. This initiative aims to capture 1.5 million tonnes of CO₂ annually, supporting the production of lower-emission natural gas and aligning with global decarbonization efforts.