by The global Synthetic Fuel Market is estimated to be valued at US$ 5.60 Bn in 2023 and is expected to exhibit a CAGR of 19.8% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Synthetic fuel refers to liquid or gas fuels that are produced from renewable biomass resources through biochemical and thermochemical processes. These fuels are compatible with existing transportation fuel infrastructure and engines. Some of the commonly used synthetic fuels include biofuels such as biodiesel and bioethanol produced from biomass feedstocks as well as gas fuels synthesized from biomass or fossil resources through gasification and Fischer–Tropsch processes. Synthetic fuels provide a viable alternative to conventional petroleum fuels and help reduce dependence on crude oil imports. They emit less greenhouse gases and particulate matter compared to petroleum fuels. With growing concerns over energy security and environmental protection, demand for synthetic fuels is increasing significantly worldwide especially in the transportation sector.
Market key trends:
One of the key trends in the synthetic fuel market is growing focus on advanced biomass gasification technologies to produce cleaner fuels. Major companies are investing in research and development of thermochemical gasification processes that can efficiently convert varied biomass feedstocks such as wood residues, agricultural wastes into synthetic gas consisting of carbon monoxide and hydrogen. This syngas can then be further processed using Fischer–Tropsch technology into drop-in renewable fuels compatible with vehicles. Another major trend is increasing production of cellulosic ethanol from non-food biomass sources. Companies are developing technologies to break down cellulose and hemicellulose fractions of lignocellulosic biomass into fermentable sugars for producing cellulosic or advanced ethanol. This helps address issues of land use change associated with conventional corn or sugarcane based ethanol.
Porter’s Analysis
Threat of new entrants: The threat of new entrants is moderate as the synthetic fuel market requires large capital investments and technological expertise to effectively compete in this mature market.
Bargaining power of buyers: The bargaining power of buyers is moderate as key buyers include automobile manufacturers, airline industries and governments which have some influence over prices.
Bargaining power of suppliers: The bargaining power of suppliers is low due to the availability of many raw material suppliers providing feedstock for synthetic fuel production.
Threat of new substitutes: The threat of new substitutes is low as synthetic fuels can effectively substitute petroleum-based fuels without major infrastructure modifications.
Competitive rivalry: Intense as major players compete on product differentiation, reliability and pricing.
Key Takeaways
The Global Synthetic Fuel Market Size is expected to witness high growth, exhibiting CAGR of 19.8% over the forecast period, due to increasing automotive fleet and supportive government policies promoting clean fuels. Regionally, North America is expected to dominate the synthetic fuel market due to presence of major producers and government focus on reducing oil imports in the region. The Asia Pacific synthetic fuel market is anticipated to exhibit the fastest growth on account of rising vehicle ownership and industrialization in developing economies such as China and India.
Key players operating in the synthetic fuel market are Sasol, Shell, Chevron, ExxonMobil, BP, Synfuels China, Rentech, Inc., Fischer-Tropsch, Technology, Linc Energy, and DKRW Advanced Fuels. Sasol is one of the leading producers of synthetic fuel using Fischer-Tropsch process. Shell is investing in development of second-generation biofuels produced from municipal waste and other cellulosic feedstock.
The global synthetic fuel market size for 2023 is estimated at US$ 5.60 Bn. Government policies promoting renewable and clean transportation fuel coupled with increasing automotive fleet is expected to drive the demand for synthetic fuels during the forecast period.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
