The LNG as a fuel market is expected to register a CAGR of over 8% during the forecast period. Factors, such as a gradual shift from conventional energy sources, like coal to cleaner energy sources, such as natural gas for power generation, along with an increase in the use of LNG for transportation are expected to help grow the market. However, the high cost and complexities of the LNG production plants and the infrastructure required for the safe distribution of LNG have somewhat hampered the growth of the market.
– There has been a significant shift in the transportation industry from conventional sources to a much cleaner and affordable sources, such as LNG, in recent years. In countries, such as China, the growth of LNG-based vehicles from 2012 to 2018 amounts to over 600%.
– Asia-Pacific is expected to be the fastest-growing market in the forecast period, mainly due to increased focus on a shift toward cleaner fuel for both energy generation and transportation.
– With worldwide increased focus on energy generation from cleaner fuels and increase in LNG based vehicles, the market is expected to grow in the forecasted period. The major market includes countries, such as the United States and China, etc.
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Key Market Trends
Transportation Application to Dominate the Market
– LNG use for transportation has shown significant growth in recent years and is expected to do so in the forecast period.
– There has been a significant rise in LNG based heavy-duty trucks in China, aiming at a reduction in greenhouse gas emissions. The number of LNG trucks rose from around 35,000 in 2012 to 235,000 in 2018 and LNG buses rose from around 14,000 in 2012 to 122,000 in 2018.
– EU has also been aiming at increasing its LNG based heavy-duty transportation system and have managed to get a growth of over 250% from 2016-2018.
– The strict regulations in response to climate change have put pressure on shipping vessels to choose LNG in-place oil. At the beginning of March 2018, there were more than 120 vessels burning LNG, with more than two-third operating in Europe.
– About 13 out of 73 cruise ships on order and to be delivered between 2017-2026 are LNG powered, with an increasing trend towards LNG powered ships.
– Hence, growing stricter regulation, government subsidies, and the aim toward reducing greenhouse gases are expected to drive the market in the forecast period.
Asia-Pacific to Dominate the Market
– The Asia-Pacific region has crossed its expected LNG import, with China importing three times the expected LNG in 2018.
– There has been a major increase in the use of LNG for power generation and transportation in the region, aiming at reducing greenhouse gas emissions.
– China’s gas demand increased from around 240 BCM in 2017 to around 280 BCM, with a lot of demand coming from the industrial and transportation sectors.
– China, with its huge fleet of LNG powered buses and trucks, has been leading the LNG based transportation sector. In China 2,552 LNG fuel station was installed and 6.7 million metric ton of LNG was used in transportation in 2018.
– Therefore, with increasing investment in infrastructure development for LNG use in the region and increasing desire toward energy generation and transportation for being cleaner and cheaper, this region is expected to show growth in forecast period.
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