Synthetic Fuel Market Size, Share, and Trends 2024 to 2034

Synthetic Fuel Market Size and Companies

The global synthetic fuel market size was valued at US$ 4.20 billion in 2022 and it is projected to surpass around US$ 31.57 billion by 2032 and growing at a compound annual growth rate (CAGR) of 22.40% during the forecast period 2023 to 2032.

Synthetic fuels are an alternative to the existing fuel market. Synthetic fuel is in the form of liquid and this fuel is not derived from crude oil. Synthetic fuels are obtained from a mixture of hydrogen and carbon monoxide which are the synthetic gases. This mixture of two gases is renewable source of energy. Due to the use of synthetic fuels the economies will become independent as they will not rely on crude oil. The crude oil market keeps fluctuating every now and then. The cost of fuel derived from crude oil also keeps on changing. With the use of synthetic fuels the economies will make use of green energy which has no harmful emissions. The process of manufacturing liquid fuel involves production of hydrogen from water. The produced hydrogen is then mixed with carbon in order to produce the liquid fuel. The combination of carbon dioxide and hydrogen results in the formation of synthetic fuels. The help of industrial processes carbon can be recycled and it can even be captured with the use of filters. 

Growth Factors

The market for the synthetic fuels is expected to grow well during the forecast. In the past the market has seen a good growth owing to a number of reasons. As the crude oil market fluctuates and the prices of oil rise on and off there is a growing demand for the use of synthetic fuels. The governments of various developing as well as developing economies are focusing on the use of synthetic fuels in order to meet the zero emissions target by the year 2050. The most important factor which is boosting the synthetic fuels market is the fear of depletion of natural resources. The political unrest among the oil producing countries and the other dependent countries across the globe is creating a major demand for synthetic fuels across the globe. The other most important factors leading to the growth of this market is that synthetic fuels are environment friendly. The use of synthetic fuels does not cause a great amount of pollution as compared to the other fuels existing in the market. The growing attention of various governments on the production of synthetic fuels and the increasing oil prices is also expected to boost the market growth during the forecast period.

The feedstock which is used in order to produce synthetic fuels or renewable and hence synthetic fuel is also known as a green fuel. As the fuel is available in the liquid format the storage and distribution of this fuel is similar to that of the petroleum based fuels. Synthetic fuels can be used with the already existing infrastructure in the market and this happens to be the nature driver for the growth of this market. Synthetic fuels are user friendly as they reduce the carbon emissions from the environment. The use of this fuel in the existing cars does not require any modification in the engines and therefore there is no need for a lot of expenditure or investment for new infrastructure. As compared to the petroleum fuels synthetic fuels are clean as the pollutants like metal and sulfur from the petroleum fuels it can be captured in the synthetic plants. Multiple feedstocks can be used in the production of synthetic fuels and this is another reason why the market is expected to grow during the forecast period. 

Synthetic fumes can be generated from gas, biomass or coal. The energy density of synthetic fuels is very close to that of gasoline which means that the space taken by synthetic fuels is less but it will provide the same amount of output. Unlike the battery operated vehicles there is no new infrastructure required as the synthetic fuels can be used in the already existing vehicles as they are compatible. Synthetic fuels also operate in cold climates which makes them a suitable option for many countries across the globe.

Report Scope of the Synthetic Fuel Market

Raw Material Insights

By raw material, the coal segment is expected to dominate the market during the forecast period. With the use of chemical conversion process which involves cool synthetic fuels are produced on a large scale. Due to the easy availability of coal across most of the countries you segment is expected to grow well during the forecast period. The political uncertainty across the globe it's creating a greater demand for synthetic fuels in the market. 

Synthetic fuels manufactured from coal are a great alternative for them fuels derived from crude oil. The use of natural oil and gas can be substituted by the use of synthetic fuels. The amount of pollution caused due to the manufacturing of synthetic fuels could be one of the restraining factors for the growth of the market. Even though the cost of raw materials used for manufacturing synthetic fuels may not be extremely costly but the installation of the manufacturing plant is it expensive and it requires a large amount of investment. When the cost of manufacturing synthetic fuels which involves the installation of plants required for manufacturing are compared with the petroleum based fuels the cost of synthetic fuels is more. This shall inhibit the growth of the synthetic fuels market in the global scenario. Synthetic fuel it's compatible for use in the diesel engine as well as the gasoline engines.

Type Insights

By type, the extra heavy oil segment is expected to dominate the market during the forecast period. The extra heavy oil segment has done well in the past. Extra heavy oil is similar to crude oil and it is present inside the earth. This segment is expected to grow as it does not require any additional investment for the already existing vehicles running on the roads to use the synthetic fuel. The demand for this segment is expected to grow due to an increase in the sales of automobiles across the globe. Initiatives taken by government in order to generate pollution free fuels for use in the future the market for synthetic fuels is expected to go up. Due to the high content of octane in synthetic fuels the market is expected to grow well as the benefits of this octane are improved efficiency of the engine. Fuel can be stopped and distributed in a similar manner to the petroleum based fuels. The increasing cost of oil due to political unrest among many countries across the globe is creating more demand for synthetic fuels. 

Depending on any type of the fuel used synthetic fuel can be used without any modifications to the diesel engines. Synthetic fuel it's compatible with the already existing vehicles running on the roads. Even though the use of synthetic fuels in the vehicles does not cause a lot of emissions but the production of synthetic fuels in a manufacturing plant leads to a lot of pollution which can be compared with the pollution caused by gasoline.

Regional Insights

In 2022, Asia Pacific region had a largest market share of about 40% and is expected to have a significant growth during the forecast period. Due to a growing demand of automobiles in the Asia Pacific region specifically in India, China and Japan the market is expected to grow during the forecast period. Growing demand for automobiles is creating a demand for fuels across the globe. In the Asia Pacific region China is expected to be major consumer of synthetic fuels. It is estimated that there shall be a good amount of production of synthetic fuels in China. Apart from China India is also expected to witness a good growth during the forecast period. Increasing demand for automobiles and an alternative for the crude oil based fuels the market for synthetic fuels is expected to grow well in the Indian market. Availability of low cost labor and cheap raw material in countries like India and China is expected to give a boost to the synthetic fuels market. The quantity of synthetic fuel produced in the Asia Pacific region compared to the other regions like North America or Europe will be more due to the availability of low cost labor and easily available raw material. 

The North American market is also expected to grow well during the forecast period. In the recent years the North American market has dominated the synthetic fuels market. Due to a high amount of investments for technological advancements in the North American region the market will grow well. Investments from the public and private sector for promoting the manufacturing of synthetic fuels in the North American region will lead to an increased production of synthetic fuels in this region. 

The European market is also expected to have a steady growth during the forecast period. Due to the growing automotive industry in the European region the market for synthetic fuel is expected to grow up. The awareness regarding the availability of synthetic fuels and the benefits of using these synthetic fuels will drive the market growth in these regions. In order to reduce the emissions of the greenhouse gases many countries in Europe are promoting the use of synthetic fuels for transportation. Synthetic fuels are used as a substitute to gas and oil across many nations in the North American region. In order to reduce the carbon emission and to reach the target of net zero carbon emissions the North American region is expected to utilize synthetic fuel for the transportation segment.

Key players

• Sasol 
• Petrochina International Jinzhou Petrochemical Co., Ltd.
• Reliance Industries Ltd.
• Robert Bosch GmbH 
• Indian Oil Corporation Ltd
• Royal Dutch Shell Plc.
• Phillips 66 
• Exxon Mobil Corporation
• Red Rock Biofuels 
• SG Preston Company

Key Market Developments

• Sasol announced an investment of dollar 396 billion in South Africa to open up a coal mine in the year 2019. In order to support the production of synthetic fuel in Sasol Secunda synthetic fuel operation this coal mine will provide raw material. 4000 jobs will be created in order to extract coal from this region.
• US had proposed or plan of converting coal to liquid fuel in the year 2019. The investment required for the proposed project will be $1.2 billion and the location will be Virginia. This proposed project is expected to increase the production of synthetic fuel.

Segments covered in the report

(Note*: We offer report based on sub segments as well. Kindly, let us know if you are interested)

By Raw Material

• Coal
• Natural Gas
• Non-Food Crop Sources 
• Plant Waste
• Biomass
• Corn

By Type

• Extra-Heavy Oils
• Gas-To-Liquids Fuels
• Biomass-To-Liquids Fuel
• Fuel From Waste
• Fuel From Atmospheric Carbon
• Shale Oil
• Oil Sands
• Coal-To-Liquid (CTL) Fuels 
• Others

By Application

• Gasoline
• Diesel
• Kerosene

By Geography

• North America
• U.S.
• Canada
• Europe
• U.K.
• Germany
• France
• Asia-Pacific
• China
• India
• Japan
• South Korea
• Malaysia
• Philippines
• Latin America
• Brazil
• Rest of Latin America
• Middle East & Africa (MEA)
• GCC
• North Africa
• South Africa
• Rest of the Middle East & Africa