Published on : Oct 03, 2016
Owing to the reduction in crude oil reserves, countries around the world are exploring options to harness energy from renewable sources. Many developing countries have also become more dependent on imports from oil countries. This, combined with governments aiming to curb the spending on imports, the demand for inexpensive, clean, and abundantly available natural gas is rising. This trend has also forayed in the automotive sector, as it is seen from the launch of vehicles that run on natural gas and are considered good for the environments, besides economy.
Favorable Regulations Passed to Encourage Application of Natural Gas to Boost Market
Various incentives and favorable regulations are passed to encourage the use of natural gas. This, along with the accelerating investment by industries in the exploration of renewable sources of energy, has created significant opportunities for the global natural gas market. Since natural gas is considered a cleaner alternative fuel and environment friendly, an increasing number of vehicle owners have started to prefer it. This is expected to give significant impetus to the global natural gas market.
Based on type, the global natural gas market can be bifurcated into compressed natural gas (CNG) and liquefied natural gas (LNG). Regionally, the global market can be segmented into North America, Latin America, Asia Pacific, Europe, and the Middle East and Africa.
High Cost Vehicles Running on Natural Gas Could Hinder Growth
The demand for natural gas is expected to rise at a strong pace across the world in the forthcoming years. Despite the cost of vehicles running on natural gas being slightly higher than diesel or petrol cars, the cost reduction on fuel they offer will enable the owners save better in the long-run. The high cost of vehicles running on natural gas is mainly because of the high cost of high-pressure insulated fuel tanks, which are installed in vehicles to enable it extract CNG or LPG for power.
Despite witnessing favorable opportunities, the high capital investment and operational cost of capital investment required for manufacturing vehicles that run on natural gas are hindering the market’s expansion. Nevertheless, with governments around the world implementing policies to curb the increasing pollution level, economies are expected to take significant steps to encourage the use of natural gas across diverse industries.