Diesel Power Engine Market – Global Industry Size, Share, Trends, Opportunity, and Forecast Segmented By Type (On-road Diesel Engine, Off-road Diesel Engine and Others), By Rating (Up to 0.5 MW, 0.5–1 MW, 1–2 MW, 2–5 MW and Above 5 MW), By Application (Standby, Peak Shaving, Prime/Continuous Power and Others), By Industry Vertical (Industrial, Commercial and Residential), By Region, By Competition Forecast & Opportunities, 2021-2031F

Forecast Period	2027-2031
Market Size (2025)	USD 12.23 Billion
CAGR (2026-2031)	7.87%
Fastest Growing Segment	Above 5 MW
Largest Market	Asia Pacific
Market Size (2031)	USD 19.27 Billion

Market Overview

The Global Diesel Power Engine Market will grow from USD 12.23 Billion in 2025 to USD 19.27 Billion by 2031 at a 7.87% CAGR. The Global Diesel Power Engine Market comprises internal combustion engines utilizing compression ignition to convert fuel into mechanical energy for industrial, marine, and commercial transport applications. Growth is fundamentally supported by the necessity for high thermal efficiency and durability in sectors such as mining, construction, and remote power generation where electrification remains unviable. These industries rely on the sustained high torque and extended operational range that diesel engines uniquely provide to ensure their continued adoption in large scale infrastructure projects globally.

However, the market faces significant impediments from tightening regulatory standards regarding emissions which force manufacturers to incur high costs for compliance technologies. Governments worldwide are implementing stricter measures to curb nitrogen oxide and particulate matter outputs. Despite these regulatory pressures, the sector retains dominance in heavy transport due to the lack of scalable alternatives. According to the European Automobile Manufacturers’ Association, in 2024, diesel trucks accounted for 95.1 percent of new registrations in the European Union, illustrating the persistent market reliance on this powertrain for heavy logistics.

Key Market Drivers

Rapid expansion of construction and infrastructure projects in emerging economies acts as a primary catalyst for the diesel engine market. Developing nations are heavily investing in urbanization, road networks, and utility frameworks, necessitating heavy machinery that relies on diesel powertrains for high torque and durability in harsh environments. Electric alternatives currently lack the requisite energy density for such rigorous applications, ensuring continued dependence on internal combustion technology for excavators, loaders, and graders. According to the Indian Construction Equipment Manufacturers Association, August 2024, in the 'Annual Report 2024', the Indian construction equipment industry recorded a 26 percent year-on-year growth in sales volumes for the fiscal year 2023-24, highlighting the intensifying demand for diesel-powered machinery in developing regions.

Critical demand for reliable backup power in hyperscale data centers and AI infrastructure further propels market expansion. As technology firms scale operations to support artificial intelligence and cloud computing, the need for uninterrupted power supply necessitates the procurement of high-capacity diesel generator sets. These units provide essential redundancy during grid failures, safeguarding data integrity and operational continuity where battery storage remains insufficient for prolonged outages. According to Cummins Inc., November 2024, in the 'Third Quarter 2024 Earnings Release', Power Systems sales increased 17 percent to 1.7 billion dollars, driven significantly by global demand for data center power generation. Beyond the technology sector, the maritime industry also sustains demand; according to BIMCO, in 2024, the container shipping fleet capacity was projected to expand by 9.5 percent, illustrating the continued reliance on diesel technology across diverse industrial verticals.

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Key Market Challenges

The Global Diesel Power Engine Market is significantly constrained by tightening regulatory standards regarding emissions, which compel manufacturers to incur substantial expenses for compliance technologies. To adhere to stringent environmental frameworks, such as Euro 7 and EPA Tier 4 Final, companies are required to integrate complex exhaust after-treatment systems like Selective Catalytic Reduction and Diesel Particulate Filters. These mandates necessitate high levels of capital investment in research and development, directly increasing the unit cost of engines and diverting resources away from performance innovation. This cost escalation reduces the economic competitiveness of diesel powertrains, particularly in price-sensitive segments where cleaner alternatives are becoming increasingly viable.

This regulatory pressure has resulted in a tangible contraction in sales volumes within major regions. According to the European Automobile Manufacturers’ Association, from January to October 2024, new diesel car registrations in the European Union declined to approximately 1.09 million units, a decrease from the 1.22 million units recorded during the same period in 2023. This downturn demonstrates how escalating compliance burdens are actively restricting the addressable market size for diesel technology, hampering overall industry growth despite its continued prevalence in heavy-duty applications.

Key Market Trends

The transition toward Biofuel and Hydrotreated Vegetable Oil (HVO) compatible engines is reshaping the market as operators seek immediate decarbonization without replacing existing powertrain infrastructure. This trend is characterized by the widespread approval of drop-in renewable fuels that require no mechanical modifications to standard compression ignition engines, thereby preserving capital investments while meeting strict environmental targets. According to DB Cargo, January 2025, in the 'HVO targets for 2024 clearly exceeded' press release, the company reduced carbon dioxide emissions by approximately 32,000 tons in 2024 by replacing conventional diesel with HVO across its locomotive fleet.

The integration of hybrid diesel-renewable power systems is gaining traction, particularly in decentralized microgrids and remote industrial sites where fuel efficiency and grid stability are paramount. Manufacturers and service providers are increasingly deploying battery energy storage systems alongside diesel generators to manage load fluctuations, optimize engine runtime, and facilitate the incorporation of solar or wind energy. According to Transport + Energy, June 2024, in the article 'Aggreko increases global BESS investment', Aggreko increased its investment in mobile battery energy storage solutions to around $200 million to expand fleet capabilities for hybrid deployments.

Segmental Insights

Based on recent industry analysis, the Above 5 MW segment is emerging as the fastest-growing category within the Global Diesel Power Engine Market. This rapid expansion is primarily driven by the escalating demand for continuous, high-capacity power generation in heavy industrial sectors, particularly remote mining operations and large-scale manufacturing facilities. Furthermore, the increasing development of decentralized power plants in emerging economies, where utility grid infrastructure is often unstable, has necessitated the deployment of robust multi-megawatt diesel engines for base-load application. Consequently, industrial operators and utility providers are prioritizing these high-output units to ensure energy security and operational continuity for critical infrastructure.

Regional Insights

Asia Pacific commands the leading position in the Global Diesel Power Engine Market, driven principally by rapid industrialization and extensive urban development in major economies like China and India. The region’s dominance is underpinned by massive government-led infrastructure projects, including transportation networks and heavy construction, which necessitate robust diesel-powered machinery. Additionally, the critical need for reliable standby power in manufacturing and commercial sectors to mitigate grid instability drives consistent demand for diesel generators. This robust consumption across construction, marine, and power generation verticals solidifies Asia Pacific as the central hub for market expansion.

Recent Developments

• In January 2025, Scania Power Solutions showcased its Next Generation 13-liter DC13 engine platform for industrial and power generation applications at the World of Concrete trade show in Las Vegas. The company presented the new engine as its most fuel-efficient platform yet, offering up to 11% more power and 21% more torque compared to the previous generation. Scania emphasized that the engine was designed for sustainability and reliability, featuring a base engine lifespan that was up to 50% longer than its predecessor. The President of Scania USA described the platform as a game-changer for the industry, noting its capability to generate significant fuel savings and its compatibility with biodiesel and HVO.
• In September 2024, Perkins Engines announced the development of the Perkins 2606 diesel engine, a 13-liter platform optimized specifically for the electric power generation market. The company revealed that this new six-cylinder engine was designed to deliver between 321 and 523 kW of prime power, leveraging the architecture of the industrial 2600 Series to provide high power density and fuel efficiency. A Vice President at Perkins stated that the engine would be compatible with renewable liquid fuels such as 100% HVO and B100 biodiesel. Commercial production for the 2606 engine was scheduled to commence in the second half of 2025, targeting regions with varying emissions regulations.
• In April 2024, Cummins Power Generation expanded its award-winning Centum Series with the launch of two new diesel generator set models, the C2750D6E and C3000D6EB. These high-performance generators, powered by the robust QSK78 engine, were designed specifically for mission-critical applications such as data centers, healthcare facilities, and wastewater treatment plants. The company highlighted that these models offered a reduced footprint to optimize space while delivering high power outputs of 2750kW and 3000kW respectively. Additionally, the new generators were approved for use with paraffinic fuels, including hydrotreated vegetable oil (HVO), enabling operators to lower carbon emissions without engine modifications.
• In January 2024, Volvo Penta launched its most powerful industrial generator set engine to date, the D17, at the PowerGen International event. The new 17-liter diesel engine was engineered to deliver a power output of up to 705 kWe, offering a significant increase in power density compared to the company’s 16-liter model. Designed for standby and prime power applications, the engine featured a modernized fuel injection system and dual-stage turbochargers to improve fuel efficiency by approximately 5%. The Vice President of Industrial Sales at Volvo Penta noted that the compact design allowed customers to transition to a higher power node without requiring major installation changes.

Key Market Players

• Caterpillar Inc.
• Cummins Inc.
• Kohler Co
• Volvo AB
• Mitsubishi Heavy Industries Ltd
• Wartsila Oyj Abp
• Hyundai Heavy Industries Co. Ltd
• Man SE
• Rolls-Royce Holding PLC
• Doosan Corporation

By Type	By Rating	By Application	By Industry Vertical	By Region
On-road Diesel Engine Off-road Diesel Engine and Others	Up to 0.5 MW 0.5-1 MW 1-2 MW 2-5 MW and Above 5 MW	Standby Peak Shaving Prime/Continuous Power and Others	Industrial Commercial and Residential	North America Europe Asia Pacific South America Middle East & Africa

Report Scope:

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

• Diesel Power Engine Market, By Type:

• On-road Diesel Engine
• Off-road Diesel Engine and Others

• Diesel Power Engine Market, By Rating:

• Up to 0.5 MW
• 0.5-1 MW
• 1-2 MW
• 2-5 MW and Above 5 MW

• Diesel Power Engine Market, By Application:

• Standby
• Peak Shaving
• Prime/Continuous Power and Others

• Diesel Power Engine Market, By Industry Vertical:

• Industrial
• Commercial and Residential

• Diesel Power Engine 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