The global market for vehicle-grade liquefied natural gas (LNG) is slated to experience double-digit growth at a CAGR of about 25% until 2020, according to a report from TechSci Research. The research-based management consulting firm says a consistent increase in LNG consumption and reduction in LNG cost will drive the adoption of the fuel in automobiles. Nonetheless, challenges remain.
The report says the market is currently in its nascent stage globally because many economies have just started adopting vehicle-grade LNG under various pilot projects. Due to the presence of shale gas reserves, the U.S. and China are emerging as strong regions for the fuel, the report notes.
In order for the sector to accomplish higher worldwide proliferation, though, there must be proper LNG infrastructure, which the report says is presently lacking in most of the economies.
While capital-intensive infrastructural development is likely to take more than a decade in many developing countries, China, Australia and the U.S. are also expected to witness infrastructure development at a slackened pace. Though Europe has taken a number of government initiatives for the promotion of LNG vehicles, the region's market is yet to witness any significant activity on account of the aftershocks of the European debt crisis, the report adds.
‘[The global] vehicle-grade LNG market is expected to grow in coming years owing to its lower cost, environment friendliness and higher price stability,” says Karan Chechi, research director with TechSci Research.
“Governments of various countries are proactively working to drive the use of LNG in the automotive industry,” explains Chechi. “Amongst various types of vehicles, use of LNG as fuel is currently witnessing higher adoption in heavy-duty trucks, as these run on long hauls without requiring frequent refueling.’