Underground Coal Gasification Market

Underground Coal Gasification Market: Segmentation By End User Industry (Power Generation, Chemicals, Liquid Fuels, Gaseous Fuels); By Feedstock (Coal, Natural Gas, Petroleum, Pet-Coke and Biomass); By Technology (Steam Reforming, Partial Oxidation, Auto Thermal Reforming, Combined or Two-Step Reforming and Biomass Gasification); By Gasifier Type (Fixed Bed, Entrained Flow, Fluidized Bed) - Global Demand Analysis & Opportunity Outlook 2027

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Report ID: 894 | Published On: Apr 04, 2022

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Inflation and Looming Recession to Haunt Businesses:

In 2022 & 2023, market players expected to sail in rough waters; might incur losses due to huge gap in currency translation followed by contracting revenues, shrinking profit margins & cost pressure on logistics and supply chain. Further, U.S. economy is expected to grow merely by 3% in 2022. Purchasing power in the country is expected to fell nearly by 2.5%.
On the other hand, European countries to see the worst coming in the form of energy crisis especially in upcoming winters!! Right after COVID-19, inflation has started gripping the economies across the globe. Higher than anticipated inflation, especially in western world had raised concerns for national banks and financial institutions to control the economic loss and safeguard the interest of the businesses. Increased interest rates, strong USD inflated oil prices, looming prices for gas and energy resources due to Ukraine-Russia conflict, China economic slowdown (~4% in 2022) disrupting the production and global supply chain and other factors would impact each industry negatively.

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Global Underground Coal Gasification Market Overview

Underground coal gasification (UCG), is a clean, safe, and cheap technology suited to process deep, inaccessible coal to higher value syngas. It has the potential to increase global coal reserves used for power generation and gas-to-liquids processes. A combination of high oil prices, increasing global energy demand, and technological improvements, especially in directional drilling, has increased interest in the UCG industry and several countries are now witnessing increased investments in their UCG industries.

In countries with limited natural gas and oil reserves, but extensive coal reserves, UCG offers a cleaner and cheaper alternative energy source from coal. An additional benefit comes from UCG's compatibility with emerging technologies such as Carbon Capture and Storage (CCS), Enhanced Oil Recovery (EOR), Gas to Liquids (GTL). Furthermore, underground coal gasification also eliminates several activities associated with underground coal mining including coal washing, coal stockpiling, and waste disposal including ash handling and disposal. Thus, underground coal gasification is an effective and environment-friendly technique to lower the operating costs associated with the use of coal, this contributes to the growing popularity of coal gasification across both emerging and advanced economies.

There has been a continuous rise in the amount of CO2 emissions due to the growing economic activities. Coal-fired power plants accounted for the highest share in the global carbon emissions. This has led to several initiatives by the governments across the globe to promote the adoption of clean energy sources including coal gasification and other clean coal technologies.

Market Size & Forecast

The factors that drive the underground coal gasification market include feedstock flexibility for syngas production and the growing chemical industry. In addition, underground coal gasification can be used for converting coal into useful gases without mining. This has further resulted in organizations working towards the reduction of environmental pollution across the globe. One such resultant development has been the decarbonization of the transportation sector. Such initiatives will further propel the coal gasification market growth during the forecast period.

Currently, the underground coal gasification market is observing subsequent growth owing to the rising demand from gaseous fuels. The rising need for the decarbonization of the transportation and chemicals sector will spur the adoption of coal gasification. Coal gasification offers an efficient way of producing clean-burning hydrogen for cars and power-generating fuel cells. The rising need for clean fuels and the environmental benefits of using coal gasification will boost the overall market growth during the forecast period. Underground coal gasification market is expected to record a CAGR of 20% over the forecast period.

underground Coal Gasification market share Graph

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Market Segmentation

Our-in depth analysis of the underground coal gasification market includes the following segments:

By End User Industry:

  • Power Generation
  • Chemicals
  • Liquid Fuels
  • Gaseous Fuels

By Feedstock:

  • Coal
  • Natural Gas
  • Petroleum
  • Pet-Coke
  • Biomass

By Technology:

  • Steam Reforming
  • Partial Oxidation
  • Auto-Thermal Reforming
  • Combined or Two-Step Reforming
  • Biomass Gasification

By Gasifier Type:

  • Fixed Bed
  • Entrained Flow
  • Fluidized Bed

By Region

On the basis of regional analysis, the underground coal gasification market is segmented into five major regions including North America, Europe, Asia Pacific, Latin America and Middle East & Africa region.

Asia-Pacific dominates the global market share, with rising demand from the chemical industry, primarily from refineries. The market growth in APAC can be attributed to several factors such as the rising demand for energy, the presence of significant coal reserves, and increasing demand for clean energy technologies. China is a hub for chemical processing, accounting for most chemicals produced, globally. China's refinery capacity constitutes 14.6% of the world's refining capacity. The Chinese oil and gas sector are dominated by four national and provincial oil companies, which include PetroChina, Sinopec, China National Offshore Oil Corporation (CNOOC), and Yanchang Petroleum.

Underground coal gasification market is further classified on the basis of region as follows:

  • North America (U.S. & Canada) Market size, Y-O-Y growth & Opportunity Analysis
  • Latin America (Brazil, Mexico, Rest of Latin America) Market size, Y-O-Y growth & Opportunity Analysis
  • Europe (U.K., Germany, France, Italy, Spain, Hungary, Belgium, Netherlands & Luxembourg, Poland, Russia and Rest of Europe) Market size, Y-O-Y growth & Opportunity Analysis
  • Asia-Pacific (China, India, Japan, Singapore, Australia, New Zealand, Rest of Asia) Market size, Y-O-Y growth & Opportunity Analysis.
  • Middle East and Africa (GCC, North Africa, South Africa, Rest of Middle East and Africa) Market size, Y-O-Y growth & Opportunity Analysis

underground Coal Gasification market share Graph
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Growth Drivers

Rise in adoption of clean energy technologies

A key factor driving the growth of the global coal gasification market is the economic benefit of coal gasification. Gasification harnesses the full energy potential of the feedstock while reducing the costs associated with disposal and environmental impact.

Lower capital requirement, reduced cost of plant installation, reduced need of rail and road infrastructure, environmental obligations, and usage of deep lying coal deposit by converting them into useful products are the factors to add to the growth of the underground coal gasification market.


High Cost of Technology

The deceleration of UCG commercialization has been caused by recent decrease of world oil, gas and coal prices. Another substantial factor was lack of necessary regulations governing extraction and conversion of coal by UCG method in the jurisdictions where the UCG projects were proposed and developed. Apart from these objectives, there seem to have been more subjective and technical reasons for a slowdown or cancelation of several significant UCG projects, including low efficiency, poor environmental performance, and inability to demonstrate technology at a sufficient scale and/or at a competitive cost.

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