Compressed Natural Gas (CNG) Tank Market Trends

Growth Drivers

• CNG infrastructure expansion: The swiftly developing infrastructure of natural gas, such as LNG and CNG, is both developed and high-potential economies are opening lucrative doors for CNG companies. The countries are expanding their pipeline networks owing to the sustainability trend. The carbon neutrality aim is to further promote the sales of compressed natural gas tanks. According to the report by the International Energy Agency (IEA), the government of Lithuania is highly pushing the use of compressed natural gas and liquefied natural gas in transportation. This rising use of alternative fuels is poised to fuel the demand for CNG tanks. The transport sector of Lithuania consumed 1,225 TJ of natural gas in 2022.

• Increasing use in automobiles: The lower prices of CNG compared to other fuels are augmenting their demand in the automotive sector. The companies are increasingly developing CNG-based vehicles, considering this trend. This zero-emission move is fueling the sales of compressed natural gas tanks for all vehicle sizes. The aftermarket for CNG tanks is anticipated to gain momentum during the foreseeable period, as many companies are focusing on the development of innovative cylinders. Hexagon Agility, in February 2024, confirmed that it received orders for compressed natural gas and renewable natural gas systems. These products are set to be installed in the Cummins X15N CNG engines of major-sized trucks.

Challenges

• High CAPEX: The high capital investment required for the production of compressed natural gas cylinders or tanks is challenging the revenue growth of the CNG tanks market players. The supply chain disruptions in raw materials used in the production of compressed natural gas tanks increase the cost of the final product. The significant infrastructure investments also deter many low-budget companies from expanding their operations in the compressed natural gas tank business.

• Lack of awareness & infrastructure: The lack of awareness and resistance to change are hampering the sales of compressed natural gas tanks in price-sensitive CNG tanks markets. Low budgets are hindering the CNG gas infrastructure growth. The dominance of fossil fuels such as petrol and diesel is lowering the importance of CNG gas. The lenient environmental regulations are also boosting the use of fossil fuel-powered vehicles, limiting the sales of CNC vehicles. All of these factors are acting as major drawbacks for the compressed natural gas tank trade.