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The global gasification market size was USD 434.49 billion in 2020. The market is projected to grow from USD 464.05 billion in 2021 to USD 663.72 billion in 2028 at a CAGR of 5.3% in the 2021-2028 period. The global impact of COVID-19 has been unprecedented and staggering, with gasification witnessing a negative impact on demand across all regions amid the pandemic. Based on our analysis, the market exhibited a lower growth of -10.3% in 2020 as compared to the average year-on-year growth during 2017-2019. The rise in CAGR is attributable to this market’s demand and growth, returning to pre-pandemic levels once the pandemic is over.
Gasification is a thermochemical process that converts organic or fossil fuel-based carbonaceous raw materials into carbon monoxide and hydrogen, with a small amount of carbon dioxide and water. Partial oxidation occurs at high temperatures with oxygen, air, or steam. The resulting product is called syngas. Fixed bed gasifiers, entrained-flow gasifiers, and fluidized-bed gasifiers are the major gasifiers used in the process. Increasing global power consumption and growing demand for clean energy are the major factors expected to propel the global market growth from 2021 to 2028.
COVID-19 Impact: Travel and Production Restraints to Affect Market Development
The ongoing COVID-19 pandemic resulted in a full-scale crisis with the imposition of travel restrictions and the suspension of flights to contain the spread of the virus, which is expected to cut a substantial amount of oil barrels, gas, and coal from the global energy system in 2020 alone. Production of biofuels will be directly impacted by the decline in the demand for road transportation as they are blended with diesel or gasoline under existing blending regulations.
The COVID-19 pandemic is also expected to impact electricity consumption as most countries are in the lockdown phase. Many projects across the globe are facing delays due to COVID-19. For instance, the INR 13,270 crore Talcher Fertilizer Urea Plant project is delayed by six months.
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Increasing Application in Waste Management to Spur Opportunities
Waste management remains a key challenge globally. Every year, agriculture, municipal solid waste, and industrial sectors generate billions of tons of waste. Thermochemical plants can help transform waste management into a revenue opportunity for food processing sectors, dairies, farms, and wastewater treatment industries. The process converts solid and liquid waste materials into synthesis gas (syngas) through a chemical reaction. Further, syngas can be converted into electricity, gas fuels, and other valuable products. With this process, MSW and wastes are no longer useless, but they become feedstocks for a gasifier. Instead of paying to dispose of and manage the waste in a landfill, use it as a feedstock, thus reducing disposal costs and landfill space, and converts those wastes into valuable electricity, fuels, chemicals, or fertilizers.
High Demand for Clean Energy to Foster Gasification Market Growth
Tightening environmental regulations globally is accelerating progress towards cleaner and eco-friendly energy generation. Most countries are expanding renewable capacities to minimize reliance on conventional power generation, which requires fossil fuels. Hence, investment in anaerobic digestion plants is increasing continuously. Such plants can help the world both manage its waste and produce the energy and products needed to fuel economic growth. The process also represents significant advances over incineration. Thus, the growing demand for clean energy is expected to drive the global market.
Expansion of the Coal Industry to Boost Growth
The synthesis gas production is conducted by a different type of feedstock where the most commonly used resource is coal. The number of coal gasifiers has seen the largest growth in 2017 and 2018 in terms of installations. Additionally, as per the Global Syngas Technologies Council (GSTC) database, coal dominates the number of planned projects under conditions, and the trend continues in 2020 and 2021.
As per the 2019 BP Statistical Review, the output of coal production increased at 4.3% y-o-y during 2018, recording the fastest growth rate in the past five years. Demand for coal also increased by 1.4% y-o-y in 2018. Expansion of the coal industry can be majorly attributed to an increase in the consumption of coal in the power generation sector. The coal industry is expanding rapidly in China, India, and other emerging countries where coal makes up a major part of the energy generation mix. An increase in demand for coal from Eastern Europe and the construction of new coal-based power plants in Poland, Greece, and the Balkan region are other factors driving the market. The seaborne trade of coal also witnessed a recovery in 2017. This trend followed in 2018, with an overall increase in coal imports. The coal industry is likely to expand due to increased demand for power and coal in the industrial sector. Thus, the expansion of the coal industry is expected to boost the growth of the global market.
High Installation Cost to Hinder Market Growth
Several Asian countries have huge electricity and climate-related issues. Despite the use of conventional coal power plants, coal thermochemical process capacities have not picked up as expected due to the high capital and production costs involved in the process. Integrated gasification combined cycle (IGCC) coal plants are the prime users of the technology to generate power. The technology is expected to be 35% more expensive than conventional coal technology. Moreover, adding carbon capture and storage (CCS) technology makes it even more expensive. Recently, the United States also suggested that the electricity generation from IGCC plants, with CCS, is likely to cost twice as much as electricity from wind or commercial-scale solar plants.
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Coal Feedstock Segment to Hold Dominant Market Share
Based on feedstock, the market is segmented into coal, petroleum, natural gas, and biomass/waste. The coal segment is projected to lead the market in 2019. The thermochemical process harnesses the full energy potential of the feedstock while reducing the costs associated with disposal and environmental impact. Also, the underground coal thermochemical process can further be used for converting coal into valuable gases without mining. Furthermore, the underground coal thermochemical process also eliminates several activities associated with underground coal mining, including coal washing, coal stockpiling, and waste disposal, including ash handling and disposal. Thus, the underground coal thermochemical process is an effective and environment-friendly technique to lower the associated operating costs with the use of coal. This factor will contribute to the growing popularity of coal gasification across both emerging and advanced economies.
Biomass/waste is another major feedstock segment expected to contribute significantly during the forecast period. Biomass offers a possible alternative to coal-based power generation. Due to rising environmental concerns and increasing greenhouse gas emissions, several companies across the globe are now turning towards environment-friendly energy sources. Moreover, the government's support through various policies and regulations and the abundant availability of biomass are some of the other factors that are currently driving this market.
Chemical Application to Hold Dominant Market Share
Based on the application, the market can be divided into chemical, liquid fuel, power, and gaseous fuel. The chemical segment is projected to lead the global market in 2019. Synthesis gas is the primary product of the plant and is used in the manufacturing of various products. The majority of it is consumed in the chemical industry, where ammonia, methanol, liquid fuels, and hydrogen are produced. Chemicals such as methanol are used as an intermediate for the synthesis of many chemicals and fuels.
In terms of revenue, power application is expected to contribute significantly during the forecast period. Increasing demand for electricity across the globe due to rapid industrialization and urbanization is also driving the growth of the market.
Asia Pacific Gasification Market Size, 2020 (USD Billion)
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Geographically, the global market has been analyzed across five key regions, including North America, Europe, Asia Pacific, the Middle East & Africa, and Latin America.
Asia Pacific is anticipated to lead the industry during the forecast period. The market growth in the Asia Pacific region can be attributed to several factors, such as the rising demand for energy, the presence of significant coal reserves, and the increasing demand for clean energy technologies.
China, India, and Japan are the other major contributors to the Asia Pacific market in terms of revenue. Furthermore, according to the BP Statistical Review 2019, coal production in Asia Pacific stood at 2,853.1 million tons of oil equivalent in 2019. The region accounted for around 73% of the share of global coal production in 2018. The region was also the leading consumer of coal across the globe, with coal consumption amounting to 2,841.3 million tons of oil equivalent in 2018.
North America and Europe are expected to grow at a moderate pace over the forecast period. Europe has the highest number of biomass gasification plants. By the end of 2020, the gasification capacity of Europe is more than 42,000 MW.
Key Participants Are Concentrating on Expanding Production Capacities
The gasification market is highly fragmented, with the presence of several large-scale players across the world. These include a group of 5-6 key companies with a wider geographic presence. Market players worldwide are prioritizing organic & inorganic developments to reinforce their position in the global market. In addition, companies are expanding their production capacity by setting up new plants and upgrading the existing ones. Highlighting an instance, on April 19, 2021, EQTEC has announced the acquisition and re-commission of a waste-to-energy plant in Italy. The acquisition enables the building of plants around the EQTEC’s proprietary, patented advanced gasification technology. The plant will utilize straw and forestry wood waste from local farms and forests to produce green electricity and heat to use in the local community operation. In January 2020, Jindal Steel and Power Ltd (JSPL) announced that its coal gasification-based direct reduced iron (DRI) plant at Angul district in Odisha had resumed operation. The facility, which has a production capacity of 1.80 MTPA, had halted its operations due to a scarcity of coal.
An Infographic Representation of Gasification Market
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The market research report presents a comprehensive assessment of the industry by offering valuable insights, facts, industry-related information, and historical data. Several methodologies and approaches are adopted to make meaningful assumptions and views to formulate the market research report. Furthermore, the report covers a detailed analysis and information per global gasification industry trends, segments, including technology, application, and regions, helping our readers get a comprehensive overview of the global industry.
Value (USD Billion) & Volume (MW)
By Feedstock; By Application; and By Region
As per the Fortune Business Insights study, the global market was USD 434.49 billion in 2020.
The global market is projected to grow at a CAGR of 5.3% in the forecasted period.
The market size of Asia Pacific stood at USD 177.91 billion in 2020.
Based on the application, the chemical segment is expected to hold the dominating share in the global market.
The global market size is expected to reach USD 663.72 billion by 2028.
Based on feedstock, the coal segment is expected to account for the dominating market share in the global market.
Increasing power consumption across the globe and growing demand for clean energy are the major drivers for the global market.
The top players in the market are Air Liquide, Air Products, Mitsubishi Heavy Industries, ANDRITZ, and ThyssenKrupp.
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