Synthetic Fuel Market – Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Raw Material (Coal, Natural Gas, Food-crop/Plant Based, Non-food Crop Based), By Type (Extra Heavy Oils, Gas to Liquid Oils, Shale Oils, Coal to Liquid, Biomass to Liquid, Others), By Application (Gasoline, Diesel, Kerosene), By Region, and By Competition, 2020-2030F

Market Overview

The Global Synthetic Fuel Market, valued at USD 49.40 Billion in 2024, is projected to experience a CAGR of 6.19% to reach USD 70.83 Billion by 2030. Synthetic fuel, also known as e-fuel or synfuel, represents a liquid fuel manufactured from syngas, a blend of carbon monoxide and hydrogen derived from diverse feedstocks such as biomass, natural gas, or captured carbon dioxide and renewable hydrogen. The market for these fuels is primarily driven by the imperative to reduce global greenhouse gas emissions and enhance energy security through the diversification of energy portfolios. Furthermore, government policies, regulations, and incentives promoting low-carbon energy solutions significantly contribute to market expansion.

According to the International Air Transport Association (IATA), in 2024, Sustainable Aviation Fuel (SAF) production volumes reached 1 million tonnes, doubling the 0.5 million tonnes produced in 2023, though this still only represented 0.3% of global jet fuel production. A significant challenge impeding market expansion is the substantial capital investment required for establishing production facilities and the inherent difficulty in achieving economies of scale, which leads to higher production costs compared to conventional fuels.

Key Market Drivers

The global synthetic fuel market is profoundly influenced by stringent environmental regulations and ambitious decarbonization goals, which compel industries to adopt low-carbon alternatives. Regulatory frameworks, such as the European Union's ReFuelEU Aviation initiative, establish clear targets for synthetic fuel integration in hard-to-abate sectors. According to the Council of EU ministers, October 2023, 'Final approval given | 1.2% of aviation fuel in EU must be derived from green hydrogen by 2030', an average of 1.2% of the fuel used by planes leaving EU airports in 2030 and 2031 must be synthetic kerosene, directly stimulating demand and investment in production capabilities. These mandates provide the necessary policy certainty for long-term investments in synthetic fuel production, driving technological advancements and scale-up efforts across the value chain.

Furthermore, the decarbonization needs of hard-to-electrify sectors represent a critical catalyst for synthetic fuel adoption. Industries such as maritime shipping and aviation, where direct electrification is technically challenging or economically unfeasible, increasingly rely on synthetic fuels to meet their emission reduction commitments. The maritime sector, for instance, is rapidly embracing green methanol as a viable synthetic fuel option. According to DNV-Maritime, February 2024, '23 methanol-powered ships ordered since the start of 2024', 138 methanol-powered ships were ordered in 2023, demonstrating a significant shift towards these alternative fuels. This trend underscores synthetic fuels' indispensable role in enabling these sectors to achieve their climate objectives, particularly as the overall market expands. According to H2 View, May 2021, 'A new hydrogen reality: Haru Oni, the world's first integrated e-fuels plant', the Haru Oni project in Chile is set to significantly scale up to produce 55 million litres of e-fuels by 2024, highlighting the tangible progress in increasing production capacity.

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Key Market Challenges

A significant challenge impeding the expansion of the global synthetic fuel market is the substantial capital investment required for establishing production facilities and the inherent difficulty in achieving economies of scale. These factors directly contribute to higher production costs compared to conventional fossil fuels. Such elevated costs diminish the economic competitiveness of synthetic fuels, thereby hindering their widespread adoption by industries seeking cost-effective energy solutions. This financial disparity limits the ability of synthetic fuels to penetrate existing markets, even with strong environmental drivers and policy support, as end-users face considerable additional expenses.

The economic disadvantage is evident in key segments. According to the International Air Transport Association (IATA), in 2024, the average cost of Sustainable Aviation Fuel was 3.1 times that of conventional jet fuel, incurring an additional industry cost of $1.6 billion. This cost multiple is projected to increase to 4.2 times in 2025. These figures illustrate the significant premium associated with synthetic fuels, directly impacting their commercial viability and slowing market penetration across sectors.

Key Market Trends

Technological innovations in production efficiency are significantly enhancing the viability and scalability of synthetic fuels by addressing key cost and operational hurdles. Advancements encompass improvements in catalyst development, reactor design, and integrated process technologies that streamline the conversion of raw materials into usable fuels. For example, Prometheus Fuels announced in September 2025 that it had reduced the cost of direct air capture (DAC) of carbon dioxide to below $50 per ton, a substantial decrease compared to previous industry averages, thereby making carbon-neutral fuels more cost-competitive. These efficiencies are critical for lowering the overall production expense, fostering greater investment, and accelerating market penetration by making synthetic fuels more economically attractive to end-users across various sectors.

The emergence of key regional growth hubs is another influential trend, as specific geographic areas establish themselves as centers for synthetic fuel production and consumption. These hubs are often characterized by favorable policy environments, abundant renewable energy resources, and strategic industrial partnerships, creating localized ecosystems that support large-scale development. In 2023, China's National Energy Administration (NEA) unveiled plans for a major synthetic fuel plant in Inner Mongolia, projected to produce 1 million tons of synthetic fuel annually by 2025, demonstrating the concentrated efforts to build significant production capacities within specific regions. This regionalization facilitates the development of robust supply chains, reduces logistical complexities, and drives economic growth by attracting substantial capital and fostering technological clusters.

Segmental Insights

The Natural Gas segment is emerging as a key growth driver within the Global Synthetic Fuel Market. This rapid expansion is primarily fueled by the increasing worldwide emphasis on cleaner energy solutions and stringent environmental regulations aimed at reducing carbon emissions. Natural gas-derived synthetic fuels, produced through advanced Gas-to-Liquids technologies, offer superior combustion properties and significantly lower pollutant emissions compared to traditional fossil fuels. Furthermore, the abundant availability of natural gas reserves globally ensures a reliable and cost-effective feedstock supply, driving investments in GTL processes to meet the escalating demand for high-quality, sustainable fuel alternatives across various sectors.

Regional Insights

Asia Pacific stands as a leading region in the global synthetic fuel market, primarily driven by substantial energy demand stemming from rapid industrialization, urbanization, and sustained economic growth across its diverse economies. The region's dominance is further solidified by the widespread availability of crucial feedstocks, such as coal and natural gas, which are fundamental for synthetic fuel production. Moreover, supportive government policies and strategic initiatives aimed at enhancing energy security and achieving ambitious carbon emission reduction targets significantly bolster investment and development in synthetic fuel technologies. This confluence of high demand, abundant resources, and proactive regulatory frameworks fosters a robust market for synthetic fuels.

Recent Developments

• In June 2025, Synhelion, a solar fuel technology company, and INERATEC, a synthetic fuel producer, expanded their long-standing collaboration to accelerate the rollout of solar fuel production in Europe. This strategic decision followed the successful integration of their complementary technologies at Synhelion's industrial-scale DAWN plant in Germany, which commenced operations in late summer 2024. At the DAWN facility, Synhelion's solar thermochemical process produces syngas, which INERATEC's Fischer-Tropsch production module then converts into synthetic crude oil. This deepened partnership demonstrates a breakthrough in scalable, renewable fuel solutions within the Global Synthetic Fuel Market.

• In May 2025, Metafuels AG, a Swiss aviation technology company, partnered with Evos Rotterdam to establish a new synthetic sustainable aviation fuel (e-SAF) production plant in the Port of Rotterdam. This collaboration marks a significant step in deploying Metafuels' proprietary aerobrew methanol-to-jet technology, which converts methanol into jet fuel with high energetic efficiency. The facility, named Turbe, is initially projected to produce 12,000 liters of e-SAF daily, with plans for a tenfold increase in a subsequent phase. This initiative directly contributes to the expansion of the Global Synthetic Fuel Market by increasing e-SAF production capacity in Europe.

• In April 2025, ENEOS Corporation announced a collaboration with Suzuki Motor Corporation, Subaru Corporation, DAIHATSU MOTOR CO., LTD., Toyota Motor Corporation, and Mazda Motor Corporation. This partnership aims to showcase synthetic fuel technology during Expo 2025 Osaka, Kansai, Japan, where vehicles utilizing a synthetic fuel mixture will transport guests and related parties within the venue. ENEOS is supplying the synthetic fuel from a demonstration plant completed in September 2024, supported by Japan’s New Energy and Industrial Technology Development Organization (NEDO). This initiative highlights the potential of synthetic fuels in achieving carbon neutrality for internal combustion engine vehicles and their compatibility with existing infrastructure.

• In September 2024, HIF Global and the Chilean National Petroleum Company (Enap) formalized a commercial agreement to expedite the development of green fuels, specifically e-Fuels, within Chile. This updated partnership provides a framework for Enap to potentially acquire a shareholder stake in HIF's e-Fuel production initiatives in Magallanes. The agreement also outlines plans for modernizing the Cabo Negro docks and associated infrastructure, which are crucial for the logistical support required for e-Fuel production and export. This collaboration is a strategic move towards bolstering the global synthetic fuel supply chain and establishing a business model for e-Fuel commercialization in the Chilean market.

Key Market Players

• Sasol Limited
• Shell plc
• Robert Bosch GmbH
• L’Air Liquide S.A
• Air Products and Chemicals, Inc.
• John Wood Group Plc
• Amyris, Inc.
• Chevron Corporation
• Gevo, Inc.
• Exxon Mobil Corporation

Report Scope:

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

• Synthetic Fuel Market, By Raw Material:

o   Coal

o   Natural Gas

o   Food-crop/Plant Based

o   Non-food Crop Based

• Synthetic Fuel Market, By Type:

o   Extra Heavy Oils

o   Gas to Liquid Oils

o   Shale Oils

o   Coal to Liquid

o   Biomass to Liquid

o   Others

• Synthetic Fuel Market, By Application:

o   Gasoline

o   Diesel

o   Kerosene

• Synthetic Fuel Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  France

§  United Kingdom

§  Italy

§  Germany

§  Spain

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Middle East & Africa

§  South Africa

§  Saudi Arabia

§  UAE

o   Asia Pacific

§  China

§  India

§  Japan

§  Australia

§  South Korea

Competitive Landscape

Company Profiles: Detailed analysis of the major companies presents in the Global Synthetic Fuel Market.

Available Customizations:

Global Synthetic Fuel Market report with the given market data, TechSci Research offers customizations according to a company's specific needs. The following customization options are available for the report:

Company Information

• Detailed analysis and profiling of additional market players (up to five).

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