Synthetic Natural Gas Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Technology (Anaerobic digestion & fermentation, Thermal gasification, Power to gas, Others), By Source Feedstock (Coal, Biomass, Renewable energy, Others), By Application (Transportation, Power generation, Industrial processes, Grid injection), By Region, and By Competition, 2020-2030F

Market Overview

The Global Synthetic Natural Gas Market was valued at USD 21.52 Billion in 2024 and is expected to reach USD 78.78 Billion by 2030 with a CAGR of 23.96% during the forecast period.

The global Synthetic Natural Gas (SNG) market is witnessing significant growth as nations and industries increasingly prioritize sustainable energy sources, carbon neutrality, and energy security. Synthetic natural gas, produced through various methods such as biomass gasification, coal gasification, and power-to-gas technologies, is emerging as a viable alternative to conventional fossil fuels. The key driver of market expansion is the rising demand for cleaner-burning fuels to reduce greenhouse gas emissions, particularly in the industrial, power generation, and transportation sectors. Additionally, governments across Europe, North America, and Asia-Pacific are providing policy incentives and funding support to accelerate the adoption of renewable and synthetic gases, further propelling market growth.

Thermal gasification of biomass and waste has become the most prominent technology due to its ability to convert diverse feedstocks into methane-rich gas. The increasing generation of organic and municipal waste, along with improvements in waste-to-energy conversion processes, supports this trend. Power-to-gas technology is also gaining traction, especially in regions with surplus renewable electricity, as it enables the conversion of excess wind or solar power into storable methane via hydrogen methanation. Furthermore, technological advancements in gasification, methanation, and carbon capture are enhancing the efficiency and commercial viability of SNG plants, encouraging new investments and pilot projects globally.

Regionally, Europe leads the global SNG market due to its robust policy framework, climate targets, and well-established gas grid infrastructure. Countries like Germany, the Netherlands, and the UK are rapidly integrating synthetic methane into their national gas supplies to reduce reliance on imported fossil fuels. North America follows closely, supported by innovation hubs in the U.S. and Canada, where companies are actively developing renewable SNG projects using forest and agricultural residues. Meanwhile, Asia-Pacific is projected to be the fastest-growing region, driven by rising energy demand, urbanization, and environmental regulations in countries such as China, India, and Japan.

Despite strong momentum, the market faces challenges such as high capital costs, technology scalability issues, and competition from other renewable alternatives like green hydrogen. However, strategic partnerships between energy producers, technology providers, and governments are mitigating these hurdles and laying the groundwork for a more mature market ecosystem. As global decarbonization efforts intensify, the role of synthetic natural gas as a transitional and complementary energy carrier is expected to grow, making it an integral part of the future energy mix. With sustained R&D, supportive policies, and expanding applications, the global SNG market is poised for robust long-term growth.

Key Market Drivers

Rising Environmental Regulations & Decarbonization Mandates

Regulatory pressure is a major driver behind SNG adoption as governments enforce stringent greenhouse gas (GHG) targets. In the EU, carbon intensity limits for fuels have tightened by 25% since 2020, pushing industries toward low‑carbon alternatives. Over 40 countries now have net‑zero mandates by 2050, incentivizing synthetic gas use. Since 2022, renewable fuel quotas in transport have expanded by 15 percentage points in many regions, elevating demand for SNG. Another 30% increase in methane blending permissions in natural gas grids has enabled wider injection of SNG in countries like Germany and the UK. In North America, federal and state-level incentives have risen by 20%, spanning tax credits and subsidies for synthetic fuel projects. Collectively, environmental regulations now represent one-third of project investment justification globally. This regulatory landscape is prompting industries to replace up to 50% of their natural gas usage with synthetic alternatives by 2030. The resulting surge in SNG-funded projects—up from 150 to 350 active global initiatives in just three years—underscores the impact of regulatory pressure.

Feedstock Availability & Waste Valorization

The abundance of biomass and waste streams is a fundamental enabler of SNG. Global agricultural residue production exceeds 2.5 billion tonnes annually, representing a massive raw material source. Municipal solid waste generation has crossed 2.2 billion tonnes per year, with organic fractions accounting for at least 60% of total volume. Forestry byproducts contribute another 800 million tonnes annually, and dedicated energy crops add 300 million tonnes globally. Altogether, these streams offer feedstock for producing over 200 bcm of SNG per year. Meanwhile, technological improvements in feedstock pretreatment have boosted conversion efficiencies by 20 percentage points in the last five years. As a result, projects converting waste to SNG have grown by 220% since 2020. Valorizing organic waste not only provides sustainable fuel but also addresses landfill burdens—where methane leakage from waste decomposition has increased by 18% over the past decade.

Technological Advancements & Efficiency Gains

SNG production is becoming more cost-effective through rapid improvements in methanation and gasification technologies. Over the past five years, catalyst performance in power‑to‑gas systems has improved by 35%, reducing hydrogen consumption per unit of methane. Thermal gasifier designs have increased feedstock throughput by 50%, enabling smaller plants to deliver commercial volumes. Carbon capture integration with SNG production has boosted CO₂ capture efficiency from 75% to 92%. Combined heat-and-power (CHP) integration with SNG systems has increased overall plant energy efficiency by 18%. Moreover, automation and digital control systems have shortened plant commissioning timelines by 30%, reducing project overhead. As a result, capital expenditure per unit of output has decreased by 15%, accelerating deployment. With ongoing innovation, these technologies now achieve industrial-scale operations within 24 months on average—down from nearly 36 months five years ago.

Strategic Partnerships & Industry Investment

Private-sector collaboration and investment are driving SNG commercialization. Since 2021, over 120 joint ventures and partnerships have been signed, involving energy majors, industrial gas firms, and technology providers. Deal volume across SNG projects has risen from USD 3 billion in 2020 to USD 8 billion in 2024. Strategic capital injections have increased by 60%, with renewables and SNG combined investments reaching USD 20 billion annually. Corporate off-take agreements now account for 45% of SNG production in development. In addition, over 25 energy utilities have pledged to incorporate SNG into their fuel mix by the end of this decade. Equity funding round sizes for SNG startups have doubled to average USD 75 million by 2024. These trends highlight the maturing commercialization stage of SNG technologies and their growing acceptance among strategic investors.

Energy Security & Infrastructure Synergy

Energy security concerns are reinforcing the strategic value of SNG. Many countries have increased domestic gas storage capacities by 40% over the last three years, seeking alternatives to imported fuels. SNG enables conversion of stranded energy sources, such as 30 GW of curtailed wind/solar capacity, into stored gas. Nations have upgraded over 25,000 km of existing pipeline infrastructure to accommodate methane blends of up to 20% SNG. Grid injection points have increased by 150%, facilitating easier distribution of synthetic gas. Meanwhile, synthetic gas can replace up to 70% of natural gas in localized industrial and district heating systems without extensive retrofit. Energy diversification policies have resulted in SNG contributing 10–15% of peak-season gas supply in some European states. This synergy ensures the existing gas grid and storage facilities remain relevant, while advancing national energy independence.

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Key Market Challenges

High Production & Capital Costs

Synthetic Natural Gas faces steep economic barriers due to high upfront and operational expenses. Typical SNG plant construction requires hundreds of millions of dollars in capital investment for gasification and methanation units. Operating expenses are compounded by the need for high-cost inputs like green hydrogen, CO₂ capture systems, and specialized catalysts. Renewable-powered electrolyzers for hydrogen production, essential for power-to-gas routes, can cost 2–3× more per unit of output compared to traditional steam methane reforming alternatives. This imbalance makes SNG significantly more expensive than conventional natural gas in regions with abundant fossil supplies. Even with technological strides, conversion efficiencies remain suboptimal: typical energy losses hover around 30–40%, with only 60–70% of input energy captured in the final gas product. Many SNG projects struggle to reach the necessary 3,000–4,000 full-load hours per year needed to amortize fixed costs and approach competitiveness. Without robust subsidies or policy support, high production costs continue to restrict SNG adoption, especially in markets still benefiting from low gas prices.

Insufficient Infrastructure & Distribution Bottlenecks

Effective scaling of SNG requires robust infrastructure, which remains inadequate in many regions. In countries lacking extensive pipeline networks or gas storage, SNG production sites are often stranded assets with no cost-effective route to market . Retrofits are frequently necessary to upgrade pipelines and compressor systems to handle synthetic gas blends, adding tens of millions in capital per project. Geographic mismatches between SNG plants (often located near biomass or renewable resources) and end-use demand hubs increase dependence on long-distance transport solutions like compressed or liquefied gas, further escalating logistics costs. This lack of distribution scale forces projects to underutilize capacity, often operating at <2,000 hours/year, which worsens their economic viability. Until infrastructure development aligns with generation capacity, many SNG projects remain economically marginalized.

Methane Leakage & Environmental Integrity

Methane emissions pose a critical challenge to the environmental credibility of SNG. Methane has a global warming potential 30–80× that of CO₂ over 100 years. Even minor leakage—during production, transport, or storage—can quickly negate the lifecycle emissions benefits of synthetic gas. Natural gas systems are already leaky, and adding new methanation or upgrade units increases the number of potential failure points. Without stringent leak detection and repair programs, fugitive emissions can undermine SNG’s justification as a decarbonization tool. The environmental risk is particularly acute when using existing gas infrastructure, where leaks may escape immediate detection.

Competition from Alternative Low‑Carbon Solutions

SNG competes with more established low-carbon alternatives like electrification, green hydrogen in hard-to-decarbonize sectors, and direct use of biomethane. Decarbonization roadmaps often prioritize electrification for residential heating, transportation, and industrial processes—areas where SNG may lag in thermodynamic efficiency and cost. Critics argue that deploying scarce green hydrogen for SNG strays resources from hydrogen's more efficient end-uses. Additionally, technologies like battery storage and direct renewable-chemical pathways (green ammonia, biomethane) may offer better cost curves and scalability. As other low-carbon technologies mature, they risk outpacing SNG in terms of policy support and commercial traction.

Regulatory & Policy Uncertainty

Despite environmental intentions, SNG development is hindered by inconsistent regulations and weak policy frameworks. Critical gaps remain in defining sustainability criteria and certifying carbon intensity limits, especially for coal-based SNG. This ambiguity discourages investment, with developers unable to ascertain whether a plant will qualify for green subsidies or regulatory credits. Variations between jurisdictions on CO₂ accounting, methane leak thresholds, and safety standards create risk for cross-border projects . Without harmonized, long-term policies like carbon pricing and renewable gas mandates, investors face unstable returns. Additionally, lack of certainty around grid injection rights or blending rates further complicates project planning and financing. Until policy clarity emerges, SNG projects will struggle to secure the backing necessary for mainstream deployment.

Key Market Trends

Growing Use of Organic Waste and Biomass Feedstock

The global shift toward a circular economy is influencing SNG production, particularly through the growing use of organic waste, agricultural residues, and biomass as primary feedstock. Governments and industries are increasingly turning to anaerobic digestion and gasification technologies that can convert organic materials into methane-rich gas. These methods help address two issues simultaneously: waste disposal and renewable energy generation. Municipalities are deploying small-to-medium-scale biogas and gasification plants that use food waste, crop residues, and manure—offering decentralized energy production models. The rise in biomass-derived SNG is also supported by rural electrification programs and net-zero commitments that prioritize low-carbon energy options. Unlike fossil fuel-based natural gas, biomass-derived SNG can be considered carbon-neutral or even carbon-negative, depending on the system boundaries. The use of waste streams also opens new revenue models for waste management companies and agricultural cooperatives. As landfill regulations tighten and organic waste bans increase, this trend is expected to accelerate. Countries with strong agricultural bases and biomass availability are particularly well-positioned to become hubs for bio-SNG production in the coming decade.

Industrial Adoption of Synthetic Natural Gas for Process Heating

Industries that require high-temperature heat—such as cement, steel, glass, and chemicals—are increasingly exploring SNG as a cleaner replacement for fossil fuels. Electrifying such processes remains technically and economically challenging, making synthetic gas a viable alternative that can leverage existing burner technologies with minimal modification. The demand for low-carbon industrial heat has risen in parallel with corporate net-zero goals and emissions reporting standards. SNG offers a pathway to decarbonize thermal processes while ensuring energy security and price predictability through long-term off-take agreements. Industries in Europe, North America, and parts of Asia are participating in pilot projects that combine on-site SNG generation with carbon capture and storage (CCS) or utilization (CCU). In many cases, synthetic methane is used as a drop-in substitute for pipeline gas or liquefied natural gas (LNG), allowing plants to meet emissions targets without compromising process reliability. This trend is particularly strong in regions with carbon pricing or cap-and-trade systems, where cleaner fuels result in significant financial advantages. The industrial sector is expected to remain a major growth avenue for SNG in the next 5–10 years.

Development of SNG Hubs through Public-Private Collaboration

Governments and private enterprises are increasingly collaborating to create regional SNG hubs—clusters of production, storage, and distribution infrastructure that serve multiple sectors and users. These hubs integrate various feedstock sources, including renewable electricity, industrial CO₂ emissions, and municipal waste, to produce synthetic methane on a large scale. Co-location with heavy industries, transportation corridors, and existing gas networks ensures economies of scale and rapid market deployment. In many cases, public funding supports the initial phases of hub development, including feasibility studies, permitting, and infrastructure upgrades. Private companies contribute technology, operational expertise, and downstream demand through offtake agreements. The aim is to create replicable business models that accelerate commercialization while reducing financial and regulatory risks. These hubs are strategically located near ports, industrial zones, and urban centers, enabling both domestic use and export opportunities. As nations look to build regional energy resilience and meet climate targets, the establishment of multi-sector SNG hubs is becoming a favored model for integrated clean energy development.

Segmental Insights

Technology Insights

Anaerobic digestion & fermentation segment dominated in the Global Synthetic Natural Gas market in 2024 due to its maturity, cost-effectiveness, and compatibility with abundant organic waste feedstocks. Unlike thermochemical routes such as gasification or power-to-gas methanation, anaerobic digestion (AD) and fermentation leverage biological processes that require relatively low temperatures and pressures, making the process more energy-efficient and financially viable, particularly for small- and mid-scale operations.

One of the main drivers behind this dominance is the global rise in organic waste generation. Municipal solid waste, agricultural residues, livestock manure, and food processing waste are produced in billions of tons annually, offering a sustainable and circular feedstock base. Anaerobic digestion can tap into this waste stream, converting it into biogas, which is then upgraded into high-purity biomethane—a direct substitute for fossil natural gas. The fermentation process similarly enables the breakdown of biomass into volatile fatty acids and other intermediates, later converted into methane.

The lower capital expenditure and modular design of AD plants make them particularly attractive in developing economies and rural areas where access to centralized energy infrastructure is limited. Additionally, policy mandates and landfill diversion regulations in Europe, North America, and Asia-Pacific are incentivizing the diversion of organic waste from disposal to energy generation. In 2024, over 60% of new SNG capacity deployed globally is linked to waste treatment facilities using AD or fermentation.

Moreover, the co-benefits—such as digestate as a fertilizer by-product, odor reduction, and emissions control—add economic and environmental value. AD also enables quick project deployment, with lead times averaging 12–18 months, compared to 24–36 months for gasification-based systems. The anaerobic digestion and fermentation segment continues to lead the global SNG market, offering a scalable, sustainable, and resource-efficient pathway to renewable gas production.

Source Feedstock Insights

Coal segment dominated the Global Synthetic Natural Gas market in 2024 due to its widespread availability, established gasification technologies, and strong demand in coal-rich nations like China and India. Coal gasification provides a consistent and large-scale method for SNG production, especially where natural gas supply is limited. Many large-scale SNG plants use lignite and bituminous coal to ensure energy security and reduce reliance on imported fuels. Additionally, government investments and existing infrastructure for coal handling and processing make coal-based SNG economically viable despite environmental concerns, particularly in regions with limited renewable energy penetration.

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Regional Insights

Largest Region

North America dominated the Global Synthetic Natural Gas market in 2024 due to a combination of technological advancement, favorable policy frameworks, abundant feedstock availability, and strong industrial demand. The region, led by the United States and Canada, has aggressively invested in renewable energy infrastructure and waste-to-energy technologies, laying a strong foundation for SNG development. Both countries benefit from a well-established natural gas distribution network, enabling the seamless injection of synthetic gas into existing pipelines with minimal retrofitting.

One of the key drivers behind North America's leadership is its abundant availability of organic and fossil feedstocks. The region generates millions of tons of municipal solid waste, agricultural residues, and industrial byproducts annually, which are increasingly diverted to anaerobic digestion, fermentation, or gasification processes for SNG production. Additionally, the U.S. has pioneered coal-to-gas technologies, especially in regions where natural gas pipelines are underdeveloped but coal resources are plentiful.

Supportive government initiatives also fuel growth. The U.S. Renewable Fuel Standard (RFS) and California’s Low Carbon Fuel Standard (LCFS) provide lucrative credits for renewable natural gas producers, making SNG projects economically viable. At the same time, carbon pricing mechanisms and decarbonization mandates have encouraged industries and utilities to shift toward low-carbon gas alternatives, including SNG.

North America is also home to several pilot and commercial-scale power-to-gas projects, using excess renewable electricity to produce hydrogen and subsequently methane, advancing grid stability and energy storage. These projects often benefit from public-private partnerships and research funding from institutions like the U.S. Department of Energy.

Strong industrial demand for clean thermal energy—particularly in sectors like chemicals, refining, and manufacturing—drives adoption of synthetic methane as a drop-in fuel. Combined, these factors position North America as the dominant region in the global SNG market in 2024.

Emerging Region

Europe was the emerging region in the Global Synthetic Natural Gas market in the coming period due to its strong climate policies, decarbonization goals, and energy diversification strategies. The European Union’s Green Deal, Fit for 55 package, and Renewable Energy Directive promote renewable gas adoption, including SNG. High natural gas prices and the drive to reduce dependence on Russian energy have further accelerated interest in domestically produced synthetic methane. Countries like Germany, the Netherlands, and France are investing heavily in power-to-gas projects, leveraging surplus renewable energy. Additionally, Europe’s advanced waste management systems support anaerobic digestion and biomass-based SNG production at scale.

Recent Developments

• In August 2024, the Ministry of Coal, in partnership with the Ministry of Power and Natural Gas, has enabled a significant joint venture agreement between two prominent Maharatna CPSEs, Coal India Limited (CIL) and GAIL (India) Limited (GAIL), to establish a coal-to-syngas plant. The plant is projected to produce 633.6 million Nm³ of syngas annually, requiring 1.9 million tonnes of coal. It will be located in the Raniganj area of Eastern Coalfields Limited in West Bengal, with coal supply sourced from CIL.
• In July 2024, Coal India Limited partnered with BHEL to establish Bharat Coal Gasification and Chemicals Limited (BCGCL), aiming to produce approximately 660,000 tonnes of ammonium nitrate from CIL's coal mines. This joint venture will focus on coal gasification to generate syngas, ammonia, and nitric acid as intermediate products, with ammonium nitrate as the final product for use in CIL’s operations. Additional products will be marketed externally. The facility will be located in the Lakhanpur area of Mahanadi Coalfields (MCL), Odisha, with a daily output of 2,000 tonnes of ammonium nitrate and an annual production target of 660,000 tonnes. CIL will supply around 1.3 million tonnes of coal from MCL for this project.
• In November 2023, New Era Cleantech launched a project to create India's first private sector coal gasification plant, with an investment of around USD 2.5 billion over ten years. This initiative aims to revitalize the economically challenged Vidarbha region in Maharashtra's Chandrapur district. Central to the project is a coal gasification plant with a capacity of 5 million tonnes per year, designed to produce syngas which is a combination of carbon monoxide and hydrogen. By utilizing advanced coal gasification technology and cost-effective carbon capture methods, New Era Cleantech intends to decarbonize the industrial, power, fertilizer, and chemical sectors, fostering a cleaner and more sustainable future.
• In June 2023, Tata Steel and Germany's SMS group signed an agreement to collaborate on decarbonizing steel production. The memorandum of understanding focuses on a joint demonstration of SMS's EASyMelt technology at Tata Steel's Jamshedpur plant, aiming to reduce CO2 emissions from the blast furnace by more than 50%. EASyMelt captures top gas from the furnace to create syngas, composed of carbon monoxide and hydrogen, which is then reinjected into the furnace at both the shaft and tuyere levels, with additional heating provided by a plasma torch system. SMS highlights that this technology can be integrated into existing steel plants.

Key Market Players

• TotalEnergies 
• Air Liquide
• Linde plc
• Shell plc
• BP
• Chevron Corporation
• Basin Electric Power Cooperative
• EnviTec Biogas AG
• Verbio SE
• Kinder Morgan 

Report Scope:

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

•  Synthetic Natural Gas Market, By Technology:

o   Anaerobic digestion & fermentation

o   Thermal gasification

o   Power to gas

o   Others

• Synthetic Natural Gas Market, By Source Feedstock:

o   Coal

o   Biomass

o   Renewable energy

o   Others

• Synthetic Natural Gas Market, By Application:

o   Transportation

o   Power generation

o   Industrial processes

o   Grid injection

• Synthetic Natural Gas Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  Germany

§  France

§  United Kingdom

§  Italy

§  Spain

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Asia-Pacific

§  China

§  India

§  Japan

§  South Korea

§  Australia

o   Middle East & Africa

§  Saudi Arabia

§  UAE

§  South Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Synthetic Natural Gas Market.

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Company Information

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