Compressed Natural Gas Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Source (Associated Gas, Non-Associated Gas, Unconventional Sources), By End User (Light Duty Vehicles, Medium Or Heavy Duty Buses, Medium Or Heavy Duty Trucks), By Region, By Competition, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 16.12 Billion
CAGR (2026-2031)	9.79%
Fastest Growing Segment	Medium Or Heavy Duty Trucks
Largest Market	Asia Pacific
Market Size (2031)	USD 28.23 Billion

Market Overview

The Global Compressed Natural Gas Market will grow from USD 16.12 Billion in 2025 to USD 28.23 Billion by 2031 at a 9.79% CAGR. Compressed Natural Gas (CNG) is defined as natural gas, comprised primarily of methane, that is compressed to less than one percent of its standard atmospheric volume for use as a clean-burning fuel. The global market is fundamentally supported by stringent environmental regulations aimed at reducing vehicular emissions and the comparative cost-effectiveness of natural gas against traditional liquid fuels. Distinct from evolving trends such as the integration of renewable natural gas, these core drivers provide a sustained economic and regulatory basis for market adoption. According to the International Gas Union, in 2024, global natural gas demand increased by 1.9% to 4,122 billion cubic meters, underscoring the robust consumption metrics that reinforce the sector's supply stability.

However, a significant challenge impeding broader market expansion is the inadequate development of refueling infrastructure in many developing regions. The substantial capital required to establish a comprehensive network of filling stations often lags behind vehicle production, creating a barrier to widespread consumer acceptance. Consequently, this infrastructure gap represents a critical bottleneck that could restrict the scalability of compressed natural gas as a primary alternative transportation fuel.

Key Market Drivers

The accelerated expansion of global CNG refueling infrastructure acts as a primary catalyst for market growth, addressing critical concerns regarding fuel availability and range anxiety. Governments and energy companies are prioritizing the development of dense distribution networks to support the increasing fleet of natural gas vehicles, particularly in high-growth developing economies. This strategic deployment of filling stations is essential for bridging the gap between vehicle production and consumer adoption, creating a viable ecosystem for alternative fuels. For instance, according to GAIL (India) Limited, in March 2024, the total network of compressed natural gas stations in India surged to over 6,200, exemplifying the aggressive infrastructure scaling undertaken to sustain the sector's momentum.

Simultaneously, the surging production and sales of factory-fitted CNG vehicles are fundamentally reshaping market dynamics by offering consumers safer and more reliable alternatives to aftermarket retrofits. Original Equipment Manufacturers (OEMs) are increasingly integrating CNG powertrains directly onto assembly lines, ensuring compliance with rigorous safety standards and providing warranties that boost buyer confidence. This shift is evident in the performance of major automotive players who are witnessing substantial volume growth in this segment. According to Tata Motors, in June 2024, the company registered a 120% year-on-year increase in its CNG vehicle sales for the fiscal year 2024. Furthermore, underscoring the broader consumption trends, according to The Transport Project, in April 2024, the total natural gas used as motor fuel in North America reached 675 million gasoline gallon equivalents in 2023.

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Key Market Challenges

The inadequate development of refueling infrastructure serves as a significant constraint on the growth of the global compressed natural gas market. This infrastructure gap creates a substantial barrier to entry for consumers and fleet operators who require reliable and accessible filling stations to ensure operational efficiency. The capital-intensive nature of establishing these networks often results in a slower rate of expansion compared to the manufacturing of natural gas vehicles, leading to a disparity that fuels range anxiety and limits widespread market adoption.

This misalignment is especially evident in high-growth developing economies where vehicle uptake is accelerating yet continues to face logistical bottlenecks. For example, according to the Society of Indian Automobile Manufacturers, in the fiscal year 2024-25, the market share of CNG passenger vehicles in India reached 19.5%. This statistic highlights the strong consumer demand for natural gas mobility which is currently restricted by the lagging pace of refueling station deployment, thereby directly impeding the sector's ability to capitalize on its full market potential.

Key Market Trends

The integration of Renewable Natural Gas (Bio-CNG) into supply chains is transitioning compressed natural gas from a cleaner fossil fuel to a carbon-neutral energy solution. This trend is driven by circular economy mandates where agricultural residue and waste are processed into Compressed Biogas, decoupling fuel availability from geopolitical volatility while meeting decarbonization targets. This shift is stimulating significant investment in localized production infrastructure to support green mobility initiatives. According to BioEnergy Times, August 2025, in the 'India expands bioenergy network' article, the Union Minister for Petroleum and Natural Gas reported that 113 compressed biogas plants are currently operational in India, highlighting the rapid scaling of this sustainable supply infrastructure.

Accelerated penetration into heavy-duty commercial fleets is expanding the market beyond passenger applications, supported by high-horsepower natural gas engines matching diesel performance. Fleet operators are deploying Class 8 trucks powered by compressed natural gas to mitigate rising operating costs and comply with emissions zones, effectively leveraging the fuel's energy density for long-haul logistics. This adoption is reinforced by technologies offering the requisite torque for freight transport without the payload penalties associated with electric alternatives. According to Volvo Trucks, May 2025, in the press release 'Volvo's gas-powered trucks on the rise', the company reported that its sales of gas-powered trucks increased by more than 25% in 2024, validating the growing commercial demand.

Segmental Insights

The Medium or Heavy Duty Trucks segment currently represents the fastest-growing category within the Global Compressed Natural Gas Market. This robust expansion is primarily driven by the enforcement of stringent emission regulations by authorities such as the Environmental Protection Agency and the European Commission. These mandates compel logistics providers to replace diesel fleets with cleaner natural gas alternatives. Furthermore, the substantial cost efficiency of natural gas compared to liquid fuels offers a strong economic incentive for long-haul operations. Consequently, the continuous development of refueling infrastructure ensures sustainable adoption across the global commercial transportation sector.

Regional Insights

Asia Pacific holds a dominant position in the Global Compressed Natural Gas Market, driven primarily by increasing energy requirements and stringent environmental regulations in major economies like China and India. Governments in the region are actively promoting cleaner fuel alternatives to combat rising air pollution levels and reduce dependence on conventional liquid fuels. For instance, initiatives by the Ministry of Petroleum and Natural Gas in India to expand distribution infrastructure have significantly accelerated adoption. Consequently, the rapid expansion of the automotive sector and the widespread availability of gas reserves continue to solidify the region's market leadership.

Recent Developments

• In September 2024, Cummins Inc. commenced the full production of its X15N natural gas engine at the Jamestown Engine Plant in New York. This 15-liter powertrain, designed specifically for heavy-duty commercial trucks, became the first natural gas engine available on the company's HELM platform. The unit was engineered to provide diesel-like power ratings of up to 500 horsepower while complying with stringent 2024 U.S. EPA and CARB emission standards. It supports the use of renewable natural gas and was developed to offer fleets a viable lower-carbon alternative for line-haul applications without sacrificing towing capability or range.
• In July 2024, Bajaj Auto launched the Freedom 125 in India, marking the global debut of the first motorcycle powered by compressed natural gas. The vehicle was equipped with a dual-fuel system comprising a 2 kg CNG cylinder and a 2-liter petrol tank, offering a combined range of approximately 330 kilometers. The motorcycle featured a specialized trellis frame designed to securely house the gas cylinder and protect it during impacts. The company introduced this model to provide a more fuel-efficient and environmentally sustainable option for two-wheeler commuters, aiming to reduce daily running costs significantly.
• In May 2024, Hexagon Agility announced the receipt of new orders totaling USD 57.7 million from UPS to supply renewable natural gas fuel systems for heavy-duty trucks. These orders were secured under a three-year extension of a Master Services Agreement signed earlier in the year. The contract covered the delivery of fuel systems for trucks equipped with the newly introduced 15-liter natural gas engine. This collaboration underscored the logistics company's commitment to deploying alternative fuel vehicles to reduce greenhouse gas emissions, leveraging the established infrastructure for natural gas in the commercial transportation industry.
• In February 2024, Tata Motors launched the Tiago iCNG and Tigor iCNG AMT, establishing them as the first compressed natural gas vehicles in India to feature an automated manual transmission. The new models incorporated twin-cylinder technology, where two smaller gas cylinders are placed beneath the luggage compartment to preserve boot capacity. The vehicles were engineered with a single advanced engine control unit to facilitate seamless switching between fuel modes and smooth gear shifts. This product launch addressed the growing consumer preference for automatic transmissions while maintaining the operational cost benefits associated with natural gas fuel.

Key Market Players

• PJSC Gazprom
• Shell plc
• ExxonMobil Corporation
• TotalEnergies SE
• Chevron Corporation
• Eni S.p.A
• China National Petroleum Corporation
• China Petroleum & Chemical Corporation
• PetroChina Company Limited
• National Petroleum Limited

By Source	By End User	By Region
Associated Gas Non-Associated Gas Unconventional Sources	Light Duty Vehicles Medium Or Heavy Duty Buses Medium Or Heavy Duty Trucks	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

In this report, the Global Compressed Natural Gas Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

• Compressed Natural Gas Market, By Source:

• Associated Gas
• Non-Associated Gas
• Unconventional Sources

• Compressed Natural Gas Market, By End User:

• Light Duty Vehicles
• Medium Or Heavy Duty Buses
• Medium Or Heavy Duty Trucks

• Compressed Natural Gas Market, By Region:

• North America
• United States
• Canada
• Mexico
• Europe
• France
• United Kingdom
• Italy
• Germany
• Spain
• Asia Pacific
• China
• India
• Japan
• Australia
• South Korea
• South America
• Brazil
• Argentina
• Colombia
• Middle East & Africa
• South Africa
• Saudi Arabia
• UAE