Syngas & Derivatives Market size is forecast to reach $263.89 billion by 2025, after growing at a CAGR of 9.50% during 2020-2025. Synthesis gas is known as syngas which is a fuel gas which mainly consists of carbon monoxide, Hydrogen, and some amount of carbon dioxide. The product of gasification is syngas and the main application of syngas is generating electricity. Syngas is considered as the best option for the liquid and gaseous fuel production. Rising environmental concerns have been the major drivers for the growth of the syngas & derivatives market in order to provide alternative methods of fuel production.
By Production Technology - Segment Analysis
Biomass gasification segment held a significant share in syngas & derivatives market in 2019. Partial oxidation, steam reforming, and biomass gasification are the key technologies utilized for the production of syngas and derivatives. Among these, biomass gasification is the most-utilized technology for production of syngas and derivatives, as, with this technology, the organic/fossil fuel-based carbonaceous materials, such as biomass and coal, can be converted into syngas, carbon monoxide, hydrogen, and carbon dioxide. The demand for steam reform technology is also increasing steadily and is expected to pick up pace over the forthcoming years. In steam reforming technology, natural gas is used as a feedstock to produce syngas. Hydrogen, carbon monoxide, and several other useful products are also produced during the process.
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By Gasifier Type - Segment Analysis
Fixed bed gasifier segment held a significant share in syngas & derivatives market in 2019. Fixed bed gasification is one of the most suitable processes to exploit lignocellulosics because it can be carried out at small scale with a relatively simple and robust technology; for this reason, plants based on this technology can either be included in smart energy networks or be utilized by isolated small communities. In fixed bed gasifiers, the syngas can be draft from the bottom (downdraft type) or from the top (updraft type). The latter process is characterized by higher energy efficiency conversion and enhanced flexibility of feedstock, in terms of moisture content, size, composition. Recent advancements in feeding low bulk density biomass, tar reduction and tar reforming, provide even more chances for updraft gasifiers to be used with larger pool of residual feedstock and to achieve higher conversion in syngas.
By Feedstock - Segment Analysis
Coal segment held a significant share in syngas & derivatives market in 2019. The high availability of coal for energy production and the excellent compactivity of the feedstock with various syngas production technologies drive the growth of the coal segment in the syngas & derivatives market. Biomass and organic wastes are considered as renewable feedstocks that are available in high quantities in many countries. The application of biomass and organic wastes in the production of syngas & derivatives produces clean and renewable energy and reduces landfills to a great extent. The adoption of biomass/waste feedstock in the syngas & derivatives market is in the nascent stage. With increasingly stringent environmental regulations in developed countries, the biomass/waste segment is expected to grow at a rapid pace during the forecast period.
By Application - Segment Analysis
Chemicals segment held a significant share in syngas & derivatives market in 2019 growing at a CAGR of 9.87% during the forecast period. This is due to the increasing demand for green chemicals for the synthesis and production of chemical intermediates. Depending on the H2/CO ratio, syngas & derivatives are widely used in the processing of chemicals for manufacturing fertilizers, petrochemicals, and oxo chemicals, among others. The chemicals segment is further segmented by derivative into methanol, ammonia, and FT synthesis products. Ammonia is the most widely manufactured chemical in the world, and it is primarily consumed in the production of nitrogenous fertilizers. Ammonia being the major chemical used in the production of fertilizers is the prime reason for the growth of the chemicals segment for the syngas & derivatives market.
Geography- Segment Analysis
Asia Pacific dominated the syngas & derivatives market with a share of more than 39%, followed by North America and Europe. The growth can be attributed to increasing demand for syngas & derivatives from the region's chemical, fuel, and electricity industries, particularly in China and India. Markets such as China and India are majorly engaged in the production of coal-based syngas & derivatives. This fuel the growth of the coal segment in the Asia Pacific region, which is the largest market for syngas & derivatives. According to U.S., at the end of June 2017, nearly 18 million barrels of crude oil were produced every day that were 115,000 barrels everyday more than any other week. Refineries operated at 98 % of their normal capacity. Production of gasoline increased at an, average of 10 million barrels every day. U.S. crude oil imports an average of 8.5 million barrels every day, more by 110,000 barrels every day. Thus, this increment has largely affected the growth of this market in North America region.
The global outbreak of coronavirus, which has affected the operation of factories in China and other countries, will certainly affect the consumption of industrial gases to some extent.
Drivers – Syngas & Derivatives Market
Usage of syngas in various industrial applications
Increasing demand for electricity, fuels, and agricultural products are driving the growth of the syngas and derivatives market. New production plants of syngas are being constructed in various regions. Polygeneration is the main factor that is driving the syngas and derivatives market owing to the reason that it can be used to derive fuels and chemicals for the purpose of power generation. The widely used application of syngas is the chemical production. The popular chemicals that are produced from the syngas include methanol, oxo-chemicals, ammonia, di-methyl ether, and hydrogen. From which methanol is used further to produce lot of derivatives such as olefins and formaldehyde. The increasing use of the derivatives in various industrial applications is driving the demand of syngas and derivatives market.
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Challenges – Syngas & Derivatives Market
High capital investments
There are some factors that restrain the market growth which includes the high capital investments and the time required to build the operational plant with the installation of hi-tech gasification techniques is very long. The other factor is the plants should be constructed in such areas where there is continuous availability of the feedstock.
Market Landscape
Technology launches, acquisitions and R&D activities are key strategies adopted by players in the syngas & derivatives market. Major players in the syngas & derivatives market are Syngas Technology LLC, Sasol Ltd., Chicago Bridge & Iron Co. N.V., Air Products & Chemicals Inc., Air Liquide SA., The Linde Group, Siemens AG, Haldor Topsoe A/S, BASF SE, and AMEC Foster Wheeler Plc. among others.
Geographical Expansion/ Acquisition
In August 2019, Air Products completed acquisition of GE’s Gasification Business and Technology. The gasification business acquired by Air Products includes GE’s share of its 50/50 joint venture (JV) with China Shenhua Coal to Liquid and Chemical Company, Ltd., a subsidiary of China Energy Group, a world-class energy company.
In September 2019, Air Products advances gasification growth strategy via new syngas project with Debang Group in Jiangsu Province, China.
Key Takeaways
An increase in the use of derivatives in various industrial applications is expected to drive the growth of syngas & derivatives market.
An increase in the demand for electricity and fuels are expected to drive the growth in the syngas and derivatives market.
Asia-Pacific dominated the syngas & derivatives market. Growth is attributed to the high availability of coal reserves in countries such as China, the US, and Russia.
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