CNG, RNG, and Hydrogen Tanks Market Trends, Industry | 2032

Report Description

CNG, RNG, and Hydrogen Tanks Market Outlook 2031

The global CNG, RNG, and hydrogen tanks market size was USD 2.87 Billion in 2023 and is likely to reach USD 6.17 Billion by 2032, expanding at a CAGR of 10.8% during 2024–2032. The market growth is attributed to the rising environmental awareness among the population.

Increasing environmental awareness surges the demand for natural gas, which, in turn, is anticipated to fuel the market. Strict environmental regulations boost the demand for CNG vehicles across the globe. Several countries with extensive natural gas reserves are recognizing the advantages of using CNG as an alternative fuel, due to its lower CO2 emissions compared to diesel and petrol.

• According to the report published by the US Environmental Protection Agency (EPA) on October 31, 2023, CNG produces lower smog-related tailpipe emissions than gasoline and reduces tailpipe greenhouse gas emissions by up to 20%.

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Increasingly pivoting toward cleaner and sustainable energy solutions is encouraging the shirt towards CNG, RNG, and hydrogen tanks. Growing awareness of environmental concerns and a collective commitment to reducing carbon footprints, these technologies are gaining traction across various sectors. The advantages they offer, including lower emissions, energy efficiency, and versatility, contribute to a paradigm shift in energy consumption.

The market report finds that the COVID-19 pandemic hindered the CNG, RNG, and hydrogen tanks market, owing to the strict lockdown imposed by the government. Furthermore, the social distancing, ban on exports and imports, travel restrictions, and shutdown of businesses during the pandemic disrupted the global supply chain, which further affected the market.

Impact of Artificial Intelligence (AI) CNG, RNG and Hydrogen Tanks Market

Emergence of artificial intelligence is expected to boost the market. During tank manufacturing, AI is optimizing the production processes to ensure tanks are crafted with precision and durability. AI-driven predictive maintenance is being employed to monitor the structural integrity of these tanks for safety purpose. Furthermore, AI is aiding in the development of advanced safety protocols by analyzing data from sensors and real-time monitoring systems, enabling swift detection and response to potential issues.

CNG, RNG, and Hydrogen Tanks Market Dynamics

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Major Drivers

Rising tax incentives for CNG vehicles and infrastructure are expected to boost the market during the forecast period. Governments are offering tax exemptions, incentives, and subsidies to individuals and businesses for adopting CNG vehicles. These help offset high upfront costs and encourage adoption, thereby increasing demand for CNG infrastructure. Incentives and government regulations play an important role in facilitating the development of strong CNG infrastructure.

• As per the report published by the U.S. Department of Energy, the Alternative Fuel Excise Tax Credit has been extended until December 31, 2024. This tax incentive applies to alternative fuel that is sold for use as fuel for motor vehicles. Moreover, a tax credit of USD 0.50 per gallon is available for natural gas, propane, liquefied hydrogen, P-Series fuel, and liquid fuel.

Increasing development of low-weight transportation tanks is anticipated to drive the market during the forecast period. Green Hydrogen-powered vehicles and electric vehicles have certain similarities, as they both use electric motors to move the wheels. Hydrogen vehicles store electricity in the form of hydrogen that is turned into electrical power using a fuel cell and electric vehicles rely on traditional batteries.

Existing Restraints

High cost of composite material tanks hampers the CNG, RNG, and hydrogen tanks market. Composite material tanks are expensive as compared to traditional metal tanks, owing to the high cost of raw materials required for composite material tanks. Carbon fiber is the most common material used in composite tanks, which is the most expensive than aluminum and steel.

Emerging Opportunities

Increasing technological advancements are expected to create lucrative opportunities for the market players. Several companies are advancing towards developing next-generation fully automated production lines for CNG tanks. Such technological advancements in the production line of CNG tanks enhance the liner preparation station, automated resin mixing, visual inspection and buffer station, and delivery system for tankers, which is expected to boost the market.

• In February 2023, FABRUM partnered with Airbus, Air New Zealand, Fortescue Future Industries, Christchurch Airport, and Hiringa Energy Limited to launch a new Hydrogen Consortium to bring zero-emission aviation to Aotearoa New Zealand. The vision of the Hydrogen Consortium is to help the country become a frontrunner in the commercial deployment of green hydrogen-powered aircraft.

Scope of CNG, RNG, and Hydrogen Tanks Market Report

The market report includes an assessment of the market trends, market segments, and regional markets. Overview and dynamics have also been included in the report.

CNG, RNG, and Hydrogen Tanks Market Segment Insights

Material Type Segment Analysis

Based on material type, the CNG, RNG, and hydrogen tanks market is divided into glass fiber, metal, and carbon fiber. The metal segment is expected to expand at a significant pace during the projection period, due to the availability of well-established and cost-effective technology for manufacturing metal-based tanks.

Manufacturing of CNG, RNG, and hydrogen tanks uses various types of metals, such as aluminum, steel, and metal alloys. Steel is commonly used in type 1, 2, and 3 cylinders while utilizing metal in cylinder tanks increases their weight and offers sufficient protection to the cylinders. Metal-based tanks have numerous advantages, such as high stiffness, exceptional durability, resistance to fatigue, and remarkable toughness, thereby boosting the segment.

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Gas Type Segment Analysis

In terms of gas type, the global market is segregated into RNG, CNG, and hydrogen. The hydrogen segment is projected to register a considerable CAGR during the forecast period. Hydrogen has a high density per kilogram, as it is the light and most prevalent element. A growing need for enough hydrogen means higher targets for the storage of hydrogen and bigger storage tanks. Currently, NASA owns the largest cryogenic storage tank in the world, which is located in Florida.

• In February 2021, Worthington Industries Inc. introduced ThermaGuard Hydrogen Cylinder, a new product optimized to meet the unique needs of hydrogen fuel. The cylinder was carefully developed by using Worthington's aerospace-grade standards. It has proven to be a more effective means of transporting and storing high-pressure hydrogen gas.

The CNG segment is anticipated to hold a key share of the market in the coming years, owing to the increasing preference for compressed natural gas (CNG) as compared to other options. It is considered less hazardous for fuel and transportation tanks as compared to hydrogen gas. CNG is odorless, clear, and non-corrosive.

Tank Type Segment Analysis

On the basis of tank type, the CNG, RNG, and hydrogen tanks market is segmented into type 1, type 2, type 3, and type 4. The type 4 segment is expected to register a robust growth rate during the forecast period, owing to the cost-effective and well-established manufacturing process and technologies. The segment growth is further attributed to the improved safety, enlarged storage capacity, and light weight of the tank. The increasing desire for green and sustainable transportation options increases the adoption of type 4 tanks.

• In May 2023, Luxor Holdings PLC introduced the G-STORE GO H2 hydrogen high-pressure cylinder by using Type 4 technology. This engineered cylinder features a polymer liner and is capable of storing pressure up to 350 bar (5,000 psi). The G-Store GO H2 has a proven boss-to-liner interface resulting in minimal permeability and is a cost-effective hydrogen storage solution that is ideal for fuel cell transit buses, vans, heavy-duty trucks, boats, trains, and bulk gas transport.

Application Segment Analysis

Based on application, the global market is classified into transportation tank and fuel tank. The fuel tank segment is anticipated to hold a key share of the market in the coming years, as it is widely used as a substitute in cars that are run on diesel and gasoline. The rising demand for fuel tanks from the automotive industry is attributed to several factors, including their remarkable durability, cost-effectiveness, and low CO2 emissions. Automobiles that run on natural gas are less expensive than diesel-powered automobiles.

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Regional Analysis

In terms of region, the global CNG, RNG, and hydrogen tanks market is classified as Asia Pacific, North America, Latin America, Europe, and Middle East & Africa. Asia Pacific is expected to dominate the market during the projection period, owing to the rising adoption of innovative manufacturing technologies and the availability of well-established CNG infrastructure. Industrial development is increasing in emerging countries, such as China, India, and Thailand, which drives the market. China is the major consumer of CNG, RNG, and hydrogen tanks that use excessive amounts of CNG in the automotive sector, which boosts the market.

The market in North America is anticipated to expand at a rapid pace in the coming years, due to the increasing technological advancements. The regional market growth is further attributed to the increasing expenditures of enterprises in research & development activities. The demand for CNG tanks has increased in the region, due to the wide availability of natural gas sources. This further promotes the use of CNG-powered vehicles in the region.

• In January 2023, Hexagon Purus opened a new manufacturing facility for hydrogen Type 4 composite cylinders in Westminster, MD. The 60,000-square-foot state-of-the-art facility supports annual production of up to 10,000 cylinders for heavy-duty vehicle applications and employs 150 skilled workers. The new facility increases cylinder production capacity and capabilities and allows for further expansion by adding additional production equipment, as the demand for hydrogen storage cylinders continues to grow.

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