Synthetic Fuel Market Research Report: North America dominated the synthetic fuel market | Valuates Reports

The global synthetic fuel market was valued at $3.9 billion in 2021 and is projected to reach $22.5 billion by 2031, growing at a CAGR of 19.7% from 2022 to 2031.

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In recent years, many corporations and industry players are entering into collaborations or joint ventures for researching the possibilities of synthetic fuels. They are even collaborating with automobile and aviation giants to promote synthetic fuel. Aston Martin, Porsche, Ford, Aramco, Bosch, and other market leaders are working with startups or research firms to encourage synthetic fuel use. This will also save many classic automobile models such as Mazda, Mustang, and others from going fully electric through a sustainable option. This results in increased investment in research and development activities, further acting as a growth driver for the synthetic fuel market.

There is increased demand for electric vehicles as they have successfully shown the importance of switching to an electric mode of transportation. Using battery-operated vehicles which contribute zero amounts of greenhouse gases to the environment is in huge demand. The automobile sector is launching fully electric versions of many popular models as well as new ones to meet the demand and cut down on carbon emissions. Thus, the growing market for electric vehicles overshadows the synthetic fuel benefits and thus hampers the synthetic fuel market growth. Moreover, the presence of alternate fuels also discourages synthetic fuel market opportunities.

Many high-end technologies are used for capturing carbon and producing hydrogen. After getting the desired carbon dioxide and hydrogen they are made to react together and form hydrocarbon chains. There is a huge industrial process behind this which incurs a high cost for production. Thus, the end product obtained is at the higher end of the price range. Therefore, the high cost of synthetic fuel also acts as a restraint for market growth.

Synthetic fuels have many applications in almost all industrial sectors. It can be used for firing up machinery that is currently operating on oil, gasoline, diesel, kerosene, and other such lubricants. Synthetic fuel can be used in the exact same manner as existing conventional fuels in the same infrastructure. In the automotive industry as well they can replace existing fuels in any type of engine. Similarly for the aviation industry as well the use of synthetic fuels can be used and help reduce carbon footprint. Thus, such a vast potential of fuel provides lucrative opportunities for industry growth.

By raw material, the synthetic fuel market is divided into coal, natural gas, food-crop/plant-based, and non-food crop based. The natural gas segment is expected to grow at a higher pace. In Great Britain, for example, a combination of demand reduction increased low-carbon renewable generation, and fuel switching from coal to natural gas generation have provided an emissions reduction of 61% in 2016 from a 1990 baseline. Thus, it is expected that natural gas will be one of the major contributors to the synthetic fuel market growth followed by coal.

Biomass to liquid (BTL) fuels are obtained in similar processes like GTL and CTL. The only difference in the process is that organic material is used from wood, crops, straws, Municipal Solid Waste (MSW), and grains. Biomass is subjected to combustion in an environment with low oxygen to obtain syngas. The syngas produced is further processed into synthetic fuels. BTL fuels require a lot less energy than other synfuels.

However, it costs more money and requires a huge number of feedstocks. Moreover, it is also a lesser-known process and requires heavy investments. Meanwhile, in the long run, the process of making synthetic fuel from BTL is much more environmentally friendly and emits lower carbon dioxide. Technological advancements and boosts from government and private players can contribute to synthetic fuel market growth.

By type, the synthetic fuel market was segmented into extra heavy oils, gas to liquid oils, shale oils, coal to liquid, biomass to liquid, and others. The gas-to-liquid oils segment is projected to grow at a higher pace followed by coal-to-liquid. Coal-to-liquid (CTL) technology is practiced to convert coal into liquid fuel. It is done through Fischer-Tropsch conversion technology. Coal is subjected to pulverization and then reacted with a catalyst. After that under high pressure and temperature hydrogen is added to make hydrocarbon chains in presence of a solvent which results in raw liquid. This process results in synthetic fuel that is used in many applications such as gasoline, jet fuel, and diesel.

Depending on the application, the market is divided into gasoline, diesel, and kerosene. The gasoline segment is expected to grow at the fastest pace during the projection period. Gasoline is the primary source of fuel in the transportation industry. It is also used to power several industrial processes. Gasoline is a mixture of hydrocarbons used to fuel vehicles and used in major energy sources worldwide. Gasoline means gas or petrol which is used in internal combustion engines. They are also used as solvents in many industrial applications.

Turning synthetic gas into fuels is a widely used industrial process. Synthetic gasoline produced through similar industrial processes exhibits similar properties to that of conventional gasoline. It can be used in existing vehicles and engines. The fuel can also be transported, distributed, and stored through existing infrastructure. Moreover, the synthetic gasoline produced is almost carbon neutral as the production process requires carbon dioxide, which is either extracted from the atmosphere or captured by the industrial process. The carbon dioxide used in the production is said to be equivalent to the carbon emission on the road. Thus, the growing demand for synthetic gasoline will fuel the market growth for synthetic fuel.

Region-wise, the synthetic fuel market analysis is done across North America, Europe, Asia-Pacific, And LAMEA (Latin America, The Middle East, and Africa). North America dominated the synthetic fuel market share for 2021 and is expected to continue its dominance during the synthetic fuel market forecast period. The synthetic fuel market growth is driven by numerous factors. In the U.S., the government has implemented strict rules and regulations to promote the applications of synthetic fuels and encourage the production of those fuels.

Moreover, the government is also investing and encouraging private players to invest in enhancing the present synthetic fuel production technology. Canada is also a major contributor to the rising demand for synthetic fuel. Moreover, the market growth is also driven due to the need to cut down carbon emissions and transition energy away from fossil fuels.

The key players operating in the synthetic fuel industry are Sasol, Indian Oil Corporation, Shell Plc, Exxon Mobil Corporation, Reliance, Robert Bosch GmbH, Air Liquide, PetroChina, Phillips 66, And SG Preston Company. Porsche (owned by Volkswagen) is investing around $100 million at a new facility in Chile which is expected to produce 13,000 liters of synthetic fuel by 2022 and by 2026 it is expected to produce 550 million liters. Similarly, BMW invested $12.5 million in an e-fuel startup.

By Type
• Extra Heavy Oils
• Gas to Liquid Oils
• Shale Oils
• Coal to Liquid
• Biomass to Liquid

By Raw Material
• Coal
• Natural Gas
• Food-crop/Plant Based
• Non-food Crop Based

By Application
• Gasoline
• Diesel
• Kerosene

Key Players
L'Air Liquide S.A., Phillips 66 Company, Shell Plc., PetroChina Company Limited, Indian Oil Corporation Ltd, Reliance Industries Ltd, Synhelion SA, Sasol Limited, Bosch Ltd, Exxon Mobil Corporation

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This release was published on openPR.