India Syngas Market By Production Technology (Steam Reforming, Partial Oxidation, Autothermal Reforming, Biomass Gasification, Others), By Application (Chemicals & Fertilizer, Fuels, Electricity), By Region, Competition, Forecast and Opportunities, 2020-2030F
Published Date: December - 2024 | Publisher: MIR | No of Pages: 320 | Industry: Chemicals | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationIndia Syngas Market By Production Technology (Steam Reforming, Partial Oxidation, Autothermal Reforming, Biomass Gasification, Others), By Application (Chemicals & Fertilizer, Fuels, Electricity), By Region, Competition, Forecast and Opportunities, 2020-2030F
| 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
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.
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.
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.
, 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.
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
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.
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.
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.
458.55 Million allocation for projects blending private sector and government PSUs, with each project eligible for a USD
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.
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.
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.
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.
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.
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.
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
- InAugust 2024, the Ministry of Coal, in partnership with the Ministry of Powerand Natural Gas, has enabled a significant joint venture agreement between twoprominent Maharatna CPSEs, Coal India Limited (CIL) and GAIL (India) Limited(GAIL), to establish a coal-to-syngas plant. The plant is projected to produce633.6 million Nm³ of syngas annually, requiring 1.9 million tonnes of coal. Itwill be located in the Raniganj area of Eastern Coalfields Limited in WestBengal, with coal supply sourced from CIL.
- InJuly 2024, Coal India Limited partnered with BHEL to establish Bharat CoalGasification and Chemicals Limited (BCGCL), aiming to produce approximately660,000 tonnes of ammonium nitrate from CIL's coal mines. This joint venturewill focus on coal gasification to generate syngas, ammonia, and nitric acid asintermediate products, with ammonium nitrate as the final product for use inCIL’s operations. Additional products will be marketed externally. The facilitywill be located in the Lakhanpur area of Mahanadi Coalfields (MCL), Odisha,with a daily output of 2,000 tonnes of ammonium nitrate and an annualproduction target of 660,000 tonnes. CIL will supply around 1.3 million tonnesof coal from MCL for this project.
- InNovember 2023, New Era Cleantech launched a project to create India's firstprivate sector coal gasification plant, with an investment of around USD 2.5billion over ten years. This initiative aims to revitalize the economicallychallenged Vidarbha region in Maharashtra's Chandrapur district. Central to theproject is a coal gasification plant with a capacity of 5 million tonnes peryear, designed to produce syngas which is a combination of carbon monoxide andhydrogen. By utilizing advanced coal gasification technology and cost-effectivecarbon capture methods, New Era Cleantech intends to decarbonize theindustrial, power, fertilizer, and chemical sectors, fostering a cleaner andmore sustainable future.
- InJune 2023, Tata Steel and Germany's SMS group signed an agreement tocollaborate on decarbonizing steel production. The memorandum of understandingfocuses on a joint demonstration of SMS's EASyMelt technology at Tata Steel'sJamshedpur plant, aiming to reduce CO2 emissions from the blast furnace by morethan 50%. EASyMelt captures top gas from the furnace to create syngas, composedof carbon monoxide and hydrogen, which is then reinjected into the furnace atboth the shaft and tuyere levels, with additional heating provided by a plasmatorch system. SMS highlights that this technology can be integrated intoexisting 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 PrivateLimited
- Coal India Limited
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