Smart Gas Market Trends

Growth Drivers

• Focus on energy efficiency objectives: The presence of emission reduction targets and national climate policies is readily driving the adoption of leak detection and demand-based systems, which is fueling the smart gas market’s growth internationally. According to an article published by the IEA Organization in November 2025, the international primary energy intensity, which is the ultimate metric for tracking efficiency, depends on a 1.8% improvement, denoting a rise from only 1% as of 2024. Besides, China has issued the 2024-2025 Energy Conservation and Carbon Reduction Action Plan for optimizing national energy intensity by 2.5%, with an increased goal of 3.5%, particularly in large-scale industries. Further, there has been an escalation in the energy intensity from 0.8% per year to almost 1.8% by 2022, thereby denoting a growth opportunity for the market.
• Increase in smart cities and urbanization: An increase in urban growth, particularly in APAC, has accelerated the need for integrated smart utility infrastructure, denoting a positive outlook for the smart gas market internationally. As per a data report published by the UN-Habitat Organization in September 2024, urban locations hosted 57% of the world’s population as of 2023. This, however, is expected to increase to 68% by the end of 2030. Besides, cities are readily contributing to uplifting the international expenditure on digitalized transformation, which successfully reached USD 1.8 trillion back in 2022. Moreover, the smart city technologies market is forecasted to grow rapidly from USD 121 billion to USD 301 billion by the end of 2032, thereby making it suitable for bolstering the market’s exposure.
• Surge in industrial modernization: The existence of manufacturing and chemical sectors is generating significant investment in smart gas systems to cater to compliance and safety standards. As per an article published by the IEA Organization in June 2025, international energy investment is projected to increase by the end of 2025, amounting to a record USD 3.3 trillion. In addition, investment in clean technologies, such as electrification, efficiency, low-emissions fuels, storage, grids, nuclear, and renewables, is projected to hit USD 2.2 trillion by the end of the same year. Simultaneously, investment in coal, natural gas, and oil is also set to amount to USD 1.1 trillion. Therefore, with all these investments, the smart gas market is poised to experience continuous growth across different nations.

Challenges

• Increase in cybersecurity risks: Systems in the smart gas market depend on interconnected IoT devices, cloud platforms, and two-way communication networks, making them vulnerable to cyberattacks. Hackers targeting metering infrastructure can manipulate consumption data, disrupt billing, or even compromise safety by disabling leak detection systems. Utilities face increasing pressure to secure data flows, especially as consumer privacy regulations tighten. The challenge is compounded by legacy infrastructure that was not designed for digital integration, creating weak points in the network. Cybersecurity investments, such as encryption, intrusion detection, and secure communication protocols, add high costs and complexity, thus negatively impacting the market’s growth.
• Surge in regulatory fragmentation: The smart gas market operates across diverse regulatory environments, with varying mandates for metering, data privacy, and emissions monitoring. In Europe, regional mandates smart meter rollouts, but implementation differs by member state, creating inconsistencies in adoption timelines and technical standards. In North America, federal and state-level policies diverge, complicating utility compliance. APAC markets face similar fragmentation, with countries like China enforcing strict efficiency targets while others lag in regulatory enforcement. This patchwork of rules increases costs for manufacturers and utilities, who must customize solutions for each jurisdiction. Regulatory uncertainty also discourages investment, as utilities hesitate to commit capital without clear long-term mandates, thereby causing a hindrance in the market’s expansion.