Synthetic Fuel Market to Grow at CAGR of 20% through 2033; Growing Need for Sustainable Energy Solutions to Bolster Growth

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The global synthetic fuel market size is anticipated to grow from USD 5 billion to USD 30.95 billion in 10 years. The market will experience rapid growth due to technological advancements in synthetic fuel production processes during the forecast period.

Newark, Feb. 15, 2024 (GLOBE NEWSWIRE) — The Brainy Insights estimates that the USD 5 billion in 2023 global synthetic fuel market will reach USD 30.95 billion in 2033. Fuels created by means other than those found in nature are referred to as synthetic fuels. They could serve as a viable substitute for traditional fossil fuels. These fuels can be generated from carbon-containing feedstocks such as coal, natural gas, and biomass. To facilitate a smooth transition and increased uptake, synthetic fuels guarantee or possess attributes comparable to those of conventional fuels regarding their compatibility with current combustion engines and infrastructure. Several techniques are used to manufacture synthetic fuels, such as hydrogenation, methanol synthesis, and Fischer-Tropsch synthesis. Synthetic fuels are adaptable, emit few emissions, provide stable storage, and may be tailored. The capacity to create fuels with certain qualities gives rise to adaptability. These fuels are used in power plants, trucks, cars, aircraft, and ships, demonstrating their adaptability in various settings. These fuels support environmental sustainability since they can have fewer greenhouse gas emissions. Synthetic fuels offer a way to guarantee carbon reduction, energy security, and interoperability with current systems. Applications for synthetic fuels can be found in several industries, including manufacturing, transportation, and power generation.

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Key Insight of the Global Synthetic Fuel Market

Asia Pacific will dominate the market during the forecast period.

The region’s fast urbanisation, industrialization, and economic expansion have significantly raised energy consumption. Synthetic fuels offer a competitive alternative to traditional fossil fuels while satisfying the increased demand for energy due to environmental concerns and the growing need for sustainable energy alternatives. Supporting government policies, incentives, and regulations and fostering the adoption of synthetic fuels will help augment the market’s growth. The region’s transportation industry is a significant user of synthetic fuels, encouraging the market’s potential expansion. Growth in the market will also be aided by technological innovation, developments in synthetic fuel technologies, and their quick adoption in the area.
In 2023, the natural gas segment dominated the market with the largest market share of 39% and market revenue of 1.95 billion.
The raw material segment is divided into coal, natural gas, food-crop/plant-based, non-food crop-based and others. In 2023, the natural gas segment dominated the market with the largest market share of 39% and market revenue of 1.95 billion.

In 2023, the coal-to-liquid segment dominated the market with the largest market share of 37% and market revenue of 1.85 billion.

The type segment is divided into extra heavy oils, gas to liquid oils, shale oils, coal to liquid, biomass to liquid, and others. In 2023, the coal-to-liquid segment dominated the market with the largest market share of 37% and market revenue of 1.85 billion.

In 2023, the kerosene segment dominated the market with the largest market share of 38% and market revenue of 1.90 billion.

The application segment is divided into gasoline, diesel, and kerosene. In 2023, the kerosene segment dominated the market with the largest market share of 38% and market revenue of 1.90 billion.

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Advancement in market

After months of testing at its European technical centres, Stellantis concluded that 24 engine families in European vehicles sold since 2014, or 28 million vehicles on the road, are ready to use sophisticated drop-in eFuel without modifying the powertrain. One of the world’s top integrated energy and chemical corporations, Aramco, supplied eFuels as surrogates for the experiments. Drop-in synthetic fuel, or low-carbon eFuel, is created by reacting renewable hydrogen with CO2 directly taken from the atmosphere or an industrial site. Compared to conventional fuels, the use of low-carbon eFuel has the potential to reduce carbon dioxide emissions from current internal combustion cars by at least 70% over the course of their lifetime.

Market Dynamics

Driver: the growing focus on resolving environmental issues like carbon emissions while meeting expanding energy demands.

To reduce carbon emissions in response to attempts to mitigate climate change, synthetic fuels present a viable substitute for fossil fuels that may be swiftly adopted across industries. As a cleaner alternative to conventional fossil fuels, their potential to emit fewer greenhouse gases during burning allows them to achieve sustainability goals across various businesses. By diversifying fuel sources and lowering reliance on imported oil, they also improve resilience to supply chain interruptions, which helps to promote energy security. Therefore, stakeholders will find synthetic fuels an excellent option, propelling the expansion of the worldwide synthetic fuel market. This is due to the growing emphasis on meeting rising energy demands while addressing environmental problems like carbon emissions.

Restraints: The expensive expense of producing synthetic fuels.

The low economic competitiveness and energy-intensive synthesis techniques of synthetic fuels will restrict the market’s expansion due to their high manufacturing costs. A shortage of appropriate feedstocks, such as biomass or renewable energy sources, makes them hard to get and tough for the industry. Using biomass as a feedstock contradicts environmental discourse goals by bringing up issues with land use changes, deforestation, and biodiversity loss. Consequently, there are high production costs and additional resource-related constraints. Thus, the market’s expansion will be constrained by the high cost of production and additional restrictions on the availability of resources, scalability, and environmental impact.

Opportunities: developments in technology.

Technological improvements, increased investment, and innovative ideas in manufacturing synthetic fuels will greatly aid the acceptance and implementation of synthetic fuels across industries. Technological developments that improve the sustainability and efficiency of synthetic fuel production will guarantee cost-effective scalability, resolving the market’s cost-related issues and fostering its expansion. These developments put synthetic fuels on par with conventional fossil fuels due to decreased manufacturing costs, higher yields, and less environmental impact. Partnerships and investments from public and private entities will accelerate the development and commercialization of technology for synthetic fuels. Advancements in technology and greater financial support will result in profitable market expansion. During the projection period, technical advancements and greater financial support would support the market’s development and present profitable prospects for market expansion.

Challenges: Growth of alternatives like electrification of vehicles.

As electric vehicles (EVs) gain prominence and infrastructure for EVs expands as electrification is perceived as a cleaner and increasingly cost-effective solution, it will challenge the synthetic fuel market’s growth in the forecast period. EVs present a viable alternative to synthetic fuels. The EV market has greater support from government, private players and regulatory authorities, making it difficult for synthetic fuel market players to compete with the EV market.

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Some of the major players operating in the global synthetic fuel market are:

• Bosch Ltd
• Exxon Mobil Corporation
• Indian Oil Corporation Ltd
• L’Air Liquide S.A.
• PetroChina Company Limited
• Phillips 66 Company
• Reliance Industries Ltd
• Sasol Limited
• Shell Plc.
• Synhelion SA

Key Segments covered in the market:

By Raw Material

• Coal
• Natural Gas
• Food-Crop/Plant-Based
• Non-food Crop Based
• Others

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

• North America (U.S., Canada, Mexico)
• Europe (Germany, France, the UK, Italy, Spain, Rest of Europe)
• Asia-Pacific (China, Japan, India, Rest of APAC)
• South America (Brazil and the Rest of South America)
• The Middle East and Africa (UAE, South Africa, Rest of MEA)

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About the report:

The market is analyzed based on value (USD Billion). All the segments have been analyzed on a worldwide, regional, and country basis. The study includes the analysis of more than 30 countries for each part. The report analyses driving factors, opportunities, restraints, and challenges to gain critical market insight. The study includes Porter’s five forces model, attractiveness analysis, Product analysis, supply and demand analysis, competitor position grid analysis, distribution, and marketing channels analysis.

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The Brainy Insights is a market research company, aimed at providing actionable insights through data analytics to companies to improve their business acumen. We have a robust forecasting and estimation model to meet the clients’ objectives of high-quality output within a short span of time. We provide both customized (clients’ specific) and syndicate reports. Our repository of syndicate reports is diverse across all the categories and sub-categories across domains. Our customized solutions are tailored to meet the clients’ requirement whether they are looking to expand or planning to launch a new product in the global market.

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