|
Forecast
Period
|
2026-2030
|
|
Market
Size (2024)
|
USD 18.56 Million
|
|
CAGR
(2025-2030)
|
3.23%
|
|
Fastest
Growing Segment
|
Chemicals & Fertilizer
|
|
Largest
Market
|
West
India
|
|
Market
Size (2030)
|
USD
22.20 Million
|
Market Overview
India
Syngas Market was valued at USD 18.56 Million in
2024 and is expected to reach USD 22.20 Million by 2030
with a CAGR of 3.23% during the forecast period. Syngas, or synthesis gas, primarily
consists of hydrogen and carbon monoxide and serves as a versatile intermediary
for producing chemicals, fuels, and electricity. It can be generated from
various feedstocks, including natural gas, coal, biomass, and waste materials.
The syngas market in India is gaining momentum due to its significance in
sustainable energy production and its potential to lessen dependence on
traditional fossil fuels. Syngas can be utilized for electricity generation and
acts as a precursor for manufacturing chemicals such as methanol and ammonia.
Additionally,
syngas can be transformed into liquid fuels through Fischer-Tropsch synthesis.
As India’s population and industrial activities expand, the demand for energy
is increasing, highlighting the need for alternative energy sources like
syngas. The Indian government is actively promoting clean energy technologies
and gasification projects, fostering a favorable environment for syngas
production. The growing emphasis on waste management and the use of
agricultural residues further contribute to market expansion.
However,
the high capital investment needed for syngas production facilities poses a
challenge. The potential of syngas in hydrogen production and as a feedstock
for methanol and ammonia also presents new growth opportunities. Increased
investments in research and development could lead to more efficient production
methods and reduced costs.
The
India syngas market is set for significant growth in the coming years,
propelled by rising energy demands, technological advancements, and supportive
government policies. As the country moves towards more sustainable energy
solutions, syngas is anticipated to play a crucial role in ensuring energy
security and environmental sustainability.
Key Market Drivers
Rising Energy Demand
The
growing energy demand in India is a complex factor that plays a crucial role in
the expansion of the syngas market. With a population exceeding 1.36 billion
and a rapidly developing economy, India is experiencing a significant increase
in energy needs driven by urbanization and the growth of the manufacturing
sector. This demand is primarily met through various energy sources, with coal
projected to remain the dominant supply.
According
to the International Energy Agency (IEA), India's electricity demand is
expected to surpass that of China and achieve the fastest growth rate globally
by 2026, with coal-fired generation projected to satisfy 68% of that demand.
Between 2024 and 2026, electricity demand in India is anticipated to rise by an
average of 6.5% annually.
A larger population translates to increased energy requirements for essential
services such as heating, cooling, cooking, and transportation. This growing
populace also drives the need for infrastructure development—including schools,
hospitals, and roads—further amplifying energy resource requirements.
The
government's "Make in India" initiative aims to enhance domestic
manufacturing, resulting in heightened energy demands from factories and
production facilities. Industries such as textiles, chemicals, and automotive
are expanding, each with unique energy needs that call for reliable energy
sources. Additionally, urban migration is accelerating, with millions
relocating to cities for better opportunities. Government programs like the
Smart Cities Mission are investing in energy-efficient infrastructure, necessitating
sustainable energy solutions, including syngas for power generation.
The
International Monetary Fund (IMF) forecasts India's GDP to grow by
approximately 6-7% annually, which will contribute to increased energy
consumption across sectors. As the middle class expands, there is a growing
demand for consumer goods that require energy for manufacturing. Rising incomes
also lead to more households acquiring energy-intensive appliances like
refrigerators and washing machines, further escalating overall energy demand.
In
response to severe air quality issues in major cities like Delhi, the
government is promoting cleaner energy alternatives. Initiatives to transition
industrial processes to cleaner fuels, including syngas, are gaining momentum.
Additionally, the Indian government's commitment to achieving a renewable
energy target of 500 GW by 2030 positions syngas as a vital complementary
energy source to stabilize supply amid fluctuating renewable outputs. Efforts
to reduce reliance on imported crude oil and coal include the development of
domestic syngas projects, with companies exploring biomass and agricultural
waste for syngas production. For instance, the Indian Oil Corporation is
implementing projects that convert municipal solid waste into syngas.
The
increasing energy demand in India is a significant driver of the syngas market,
influencing various sectors and accelerating the shift toward alternative
energy solutions. By addressing challenges related to population growth,
industrialization, urbanization, and environmental concerns, the syngas market
is well-positioned for substantial growth in the coming years, bolstered by
government initiatives and technological advancements.
Government Initiatives
Government
initiatives are pivotal in shaping the syngas market in India. As part of
its transition to cleaner coal technologies, the country has launched a coal
gasification mission aimed at converting 100 million tonnes of coal into gas by
2030. This initiative fosters a favorable environment for syngas as a
complementary energy source that can help stabilize the energy grid.
To
promote the establishment of syngas production facilities, the government
provides financial support through grants and subsidies, thereby alleviating
the capital burden on companies and encouraging private sector involvement. For
instance, In April 2023, an ambitious plan to convert 100 million tonnes of
annual coal production into gas secured USD 83.37 Billion in investments,
bolstered by joint ventures established between major public sector
undertakings such as BHEL, Indian Oil, and GAIL with Coal India for large-scale
syngas projects.
To
incentivize coal gasification, the government offers a 50% rebate on revenue
shares in commercial auction policies for gasification coal, establishes a new
sub-sector for syngas production, and provides long-term coal allocations to
gasification plants. Additionally, the government supports research and
development initiatives aimed at enhancing syngas production technologies,
which can lead to more efficient processes and reduced costs, making syngas
more competitive in the energy market.
The
government is also investing in infrastructure to bolster syngas production and
distribution, which includes developing gasification plants and improving the
supply chain. For instance, In January 2024, the Cabinet approved an USD 1.01
Billion scheme for coal gasification, divided into three categories. Category I
allocates USD 482.37 Million for government PSUs, allowing up to three projects
to receive grants of USD160.79 Million or 15% of capital expenditure (capex),
whichever is lower. Category II involves a USD 458.55 Million allocation for projects
blending private sector and government PSUs, with each project eligible for a USD
119.10 Million grant or 15% of
capex, selected through a tariff-based bidding process with NITI Aayog. Category
III focuses on demonstration and small-scale gasification plants, receiving USD
71.46 Million for projects with
a minimum capex of USD 11.91
Million and a production of at least 1,500 Nm³/hr of synthetic gas, granting USD
11.91 Million or 15% of capex,
whichever is less.
Initiatives
like the Swachh Bharat Mission encourage effective waste management and the
conversion of waste into energy, including syngas, thereby addressing waste
disposal issues while providing a sustainable energy solution. Public campaigns
aimed at educating industries and the general populace about the benefits of
clean energy can further drive demand for syngas as a viable alternative.
Through
a comprehensive strategy that encompasses supportive policies, financial
incentives, research and development efforts, waste management initiatives,
infrastructure investments, and public education, the government is creating a
conducive environment for syngas production. As India tackles its energy
challenges and seeks sustainable solutions, the syngas market is
well-positioned for substantial growth, playing a crucial role in the nation’s
energy landscape.
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Key Market Challenges
High Capital Costs
High
capital costs present a considerable challenge for the syngas market in India,
affecting both new entrants and established players. Setting up syngas
production facilities requires a substantial initial investment, covering
expenses related to technology, equipment, and construction, which can amount
to billions of rupees. These high upfront costs can deter potential investors,
making it difficult for new projects to secure the necessary funding to get
started.
Smaller
companies and startups often struggle to obtain financing due to the perceived
risks associated with these substantial capital requirements, leading
traditional financing sources to be less inclined to invest in high-risk energy
projects. Additionally, the return on investment for syngas initiatives
typically takes time to realize, resulting in hesitance from investors who
might favor quicker returns in more established industries. Although
advancements in syngas production technology can improve efficiency, the
initial costs for these innovations can be prohibitively high, causing
companies to hesitate in adopting them.
High
capital costs also limit the scalability of operations; without economies of
scale, production costs remain elevated, making syngas less competitive
compared to cheaper fossil fuels and emerging renewable energy sources. This
inability to scale effectively can impede syngas's market share, especially as
competitors in the fossil fuel and renewable sectors enjoy lower initial costs.
Furthermore, the significant capital investment raises the financial risks
associated with syngas projects, where any operational or market setbacks can
result in substantial losses, further discouraging new investments. To address
these challenges, stakeholders should consider innovative financing solutions,
government incentives, and strategic partnerships that can ease the financial
burden and support the sustainable growth of syngas production.
Infrastructure Limitations
Infrastructure
limitations present a major challenge to the growth and efficiency of the
syngas market in India. The existing number of gasification plants is
inadequate to satisfy the increasing demand for syngas, hindering overall
production capacity and market expansion. Many current facilities rely on
outdated technologies that do not meet the efficiency requirements for
large-scale production. Additionally, the absence of a robust transportation
infrastructure restricts the availability and accessibility of syngas,
negatively impacting both producers and consumers and creating inefficiencies
in the supply chain. Integrating syngas into existing energy grids is also
complex, as the current infrastructure may not be equipped to accommodate its
unique properties.
Furthermore,
sourcing and processing feedstocks like coal, biomass, and waste materials can
be hindered by insufficient transportation and storage capabilities. The
development of essential infrastructure for syngas production and distribution
demands significant investment, which can deter both public and private
stakeholders.
Infrastructure
projects typically have long lead times, causing delays in the establishment of
crucial facilities and systems needed for market growth. Environmental
regulations can further complicate infrastructure development, leading to
increased costs and potential project delays. To address these challenges,
strategic investments in infrastructure, improvements in logistics, and
enhancements in regulatory frameworks are crucial. By tackling these
infrastructure issues, India can enhance the growth prospects of its syngas
market and contribute to a more sustainable energy future.
Key Market Trends
Emergence of Biomass and Waste
Feedstocks
India's
expansive agricultural sector generates significant quantities of biomass,
including crop residues and other organic materials. These residues offer a
valuable opportunity for syngas production, allowing farmers to increase their
income while managing waste effectively. The utilization of agricultural waste
supports a circular economy by minimizing the environmental impact associated
with burning or disposing of these materials and converting them into energy.
The
challenge of managing municipal solid waste (MSW) has heightened interest in
transforming waste into energy. Producing syngas from MSW can alleviate waste
disposal problems while providing usable energy. For example, in August
2024, researchers from the School of Infrastructure at the Indian Institute of
Technology (IIT) Bhubaneswar developed an innovative solar-powered microwave
pyrolysis reactor. This reactor is designed to extract valuable resources from
both segregated and mixed waste materials, including biomass and plastics.
Utilizing microwave-assisted pyrolysis, it efficiently converts waste into
valuable products such as highly porous carbon (biochar), bio-oil, and syngas,
depending on the feedstock and operating conditions. This technology
leverages microwave radiation to generate uniform heat within the feedstock,
enabling rapid conversion into end products while maintaining precise control
over the reactions. Additionally, the reactor operates entirely on solar power,
promoting sustainability and self-sufficiency without adding to energy demands.
Using
biomass and waste as feedstocks for syngas production decreases reliance on
fossil fuels, thereby reducing greenhouse gas emissions and supporting India's
climate objectives. Converting waste into energy helps divert materials from
landfills, lowering pollution and contributing to cleaner urban environments.
Advancements in gasification technology are making it increasingly feasible to
transform a variety of biomass and waste feedstocks into syngas, with
innovations in pre-treatment and conversion methods improving efficiency and
output.
The
Indian government is actively promoting the use of biomass and waste for energy
production through various incentives and subsidies, creating a conducive
environment for investment in syngas projects utilizing these feedstocks. The
trend of leveraging biomass and waste in the Indian syngas market is expected
to grow, driven by sustainability initiatives, technological advancements, and
supportive government policies. This shift not only meets energy demands but
also enhances waste management, environmental protection, and economic
opportunities, positioning syngas as a crucial element in India's future energy
landscape.
Segmental Insights
Production Technology Insights
Based
on Production Technology, the Steam Reforming emerged
as the dominating segment in the Indian market for Syngas during the forecast
period. Steam
reforming is a well-established and widely adopted technology in the industry
for hydrogen production and chemical synthesis. Its proven reliability and
efficiency make it a preferred option for producers. This method is recognized
for its high conversion efficiency, yielding syngas with an ideal
hydrogen-to-carbon monoxide ratio, which is crucial for various downstream
applications such as chemical synthesis and fuel production. Additionally,
steam reforming can be scaled to meet the demands of large industrial
operations, offering significant production capacity for large-scale
applications.
In
India, the existing natural gas distribution infrastructure supports the use of
steam reforming, thereby lowering initial capital expenditures and minimizing
logistical challenges when establishing new production facilities. The cost
structure of steam reforming is also more favorable compared to alternative
methods, as its efficient resource utilization and established technology help
reduce operational costs and enhance competitiveness. These advantages
collectively establish steam reforming as the leading technology in the Indian
syngas market, ensuring its sustained prominence given the country’s natural
gas resources and supportive infrastructure.
Application Insights
Based
on Application, Chemicals & Fertilizer emerged as the fastest growing segment
in the Indian market for Syngas in 2024. With the growth of India’s
agricultural sector and a rising population, the demand for fertilizers to
improve crop yields is increasing. Syngas serves as a vital feedstock for
ammonia production, a key component in many fertilizers. Additionally, syngas is
essential for producing various chemicals, including methanol, which is used in
plastics, solvents, and other industrial applications. The demand for these
chemicals is on the rise due to industrial expansion and urbanization. The
Indian government is actively encouraging the use of syngas in chemical and
fertilizer production as part of its broader strategy to boost agricultural
productivity and ensure food security. This support includes offering
incentives for projects that utilize syngas. Furthermore, advancements in
production technologies are making it more feasible and cost-effective to
convert syngas into a range of chemicals and fertilizers, increasing the
attractiveness of this segment for investors.
By
integrating syngas production with local agricultural practices, a circular
economy can be established, where agricultural waste is transformed into energy
and subsequently used for fertilizer production. This approach not only
addresses waste management challenges but also supports local farmers and
strengthens rural economies. Collectively, these factors position syngas as a
crucial element in meeting both energy and agricultural needs in India,
facilitating significant market growth.
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Regional Insights
Based
on Region, West India emerged as the dominant region in the Indian market for Syngas
in 2024. Western India, particularly in states like Gujarat and Maharashtra,
hosts a wide variety of industries, including chemicals, petrochemicals, and
fertilizers, all of which significantly depend on syngas for their production
processes. This reliance drives demand within the region. Furthermore, the area
boasts a well-established infrastructure, featuring extensive natural gas
pipelines and distribution networks, which streamlines the sourcing of
feedstock for syngas production and minimizes logistical challenges and costs.
State
governments in Western India have actively implemented policies and initiatives
to promote clean energy and syngas projects. These efforts include providing
financial incentives, subsidies, and regulatory support that encourage
investments in syngas production facilities. Additionally, the region has
access to substantial natural gas reserves and agricultural feedstocks,
enabling companies to produce syngas efficiently and at competitive costs.
Western
India is also a center for innovation in energy technologies, including
gasification and syngas production. Collaborations between research
institutions and industries focus on developing more efficient production
methods, which enhance the overall competitiveness of syngas. The strong demand
for fertilizers in agriculture fuels the need for syngas in ammonia production,
with the region’s agricultural output further bolstering this demand and
creating a stable market for syngas-based products.
The
favorable combination of supportive policies, robust infrastructure, and
consistent market demand attracts both domestic and international investments
in syngas projects. This influx of investment aids in the development of new
facilities and technologies, further solidifying the market's growth.
Recent Development
- In
August 2024, the Ministry of Coal, in partnership with the Ministry of Power
and Natural Gas, has enabled a significant joint venture agreement between two
prominent Maharatna CPSEs, Coal India Limited (CIL) and GAIL (India) Limited
(GAIL), to establish a coal-to-syngas plant. The plant is projected to produce
633.6 million Nm³ of syngas annually, requiring 1.9 million tonnes of coal. It
will be located in the Raniganj area of Eastern Coalfields Limited in West
Bengal, with coal supply sourced from CIL.
- In
July 2024, Coal India Limited partnered with BHEL to establish Bharat Coal
Gasification and Chemicals Limited (BCGCL), aiming to produce approximately
660,000 tonnes of ammonium nitrate from CIL's coal mines. This joint venture
will focus on coal gasification to generate syngas, ammonia, and nitric acid as
intermediate products, with ammonium nitrate as the final product for use in
CIL’s operations. Additional products will be marketed externally. The facility
will be located in the Lakhanpur area of Mahanadi Coalfields (MCL), Odisha,
with a daily output of 2,000 tonnes of ammonium nitrate and an annual
production target of 660,000 tonnes. CIL will supply around 1.3 million tonnes
of coal from MCL for this project.
- In
November 2023, New Era Cleantech launched a project to create India's first
private sector coal gasification plant, with an investment of around USD 2.5
billion over ten years. This initiative aims to revitalize the economically
challenged Vidarbha region in Maharashtra's Chandrapur district. Central to the
project is a coal gasification plant with a capacity of 5 million tonnes per
year, designed to produce syngas which is a combination of carbon monoxide and
hydrogen. By utilizing advanced coal gasification technology and cost-effective
carbon capture methods, New Era Cleantech intends to decarbonize the
industrial, power, fertilizer, and chemical sectors, fostering a cleaner and
more sustainable future.
- In
June 2023, Tata Steel and Germany's SMS group signed an agreement to
collaborate on decarbonizing steel production. The memorandum of understanding
focuses on a joint demonstration of SMS's EASyMelt technology at Tata Steel's
Jamshedpur plant, aiming to reduce CO2 emissions from the blast furnace by more
than 50%. EASyMelt captures top gas from the furnace to create syngas, composed
of carbon monoxide and hydrogen, which is then reinjected into the furnace at
both the shaft and tuyere levels, with additional heating provided by a plasma
torch system. SMS highlights that this technology can be integrated into
existing steel plants.
Key Market Players
- Linde India Limited
- Air Products and Chemicals Inc.
- Air Liquide India
- Alchemie Gases & Chemicals Pvt. Ltd.
- Enerkem India Pvt. Ltd.
- Chembond Chemicals Limited
- Clarke Energy India Private Limited
- Topsoe India Pvt. Ltd.
- New Era Cleantech Solution Private
Limited
- Coal India Limited
|
By
Production Technology
|
By
Application
|
By Region
|
- Steam Reforming
- Partial Oxidation
- Autothermal
Reforming
- Biomass
Gasification
- Others
|
- Chemicals &
Fertilizer
- Fuels
- Electricity
|
- West India
- North India
- South India
- East India
|
Report Scope:
In this report, the India Syngas Market has been
segmented into the following categories, in addition to the industry trends
which have also been detailed below:
- India Syngas Market, By Production Technology:
o Steam Reforming
o Partial Oxidation
o Autothermal Reforming
o Biomass Gasification
o Others
·
India Syngas
Market, By Application:
o Chemicals & Fertilizer
o Fuels
o Electricity
- India Syngas Market, By Region:
o West India
o North India
o South India
o East India
Competitive Landscape
Company Profiles: Detailed analysis of the major companies presents in the India Syngas
Market.
Available Customizations:
India Syngas Market report with the given market
data, TechSci Research offers customizations according to a company's specific
needs. The following customization options are available for the report:
Company Information
- Detailed analysis and profiling of additional
market players (up to five).
India Syngas Market is an upcoming report to be
released soon. If you wish an early delivery of this report or want to confirm
the date of release, please contact us at [email protected]