CNG, RNG, and Hydrogen Tanks Market

The global CNG, RNG, and hydrogen tanks market size is expected to be USD 2.5 billion in 2022, and grow at a CAGR of 10.7% during the forecasted period. There is an intense effort to switch from fossil fuels to cleaner, more sustainable energy sources as concerns over climate change and air pollution continue to rise due to which the demand for alternative fuel vehicles, such as CNG, RNG, and hydrogen fuels, is also about to increase. The coming demand from the automotive industry due to the stringent environmental regulations and the concern about the environment to boost the market of CNG, RNG and hydrogen tanks in forecasted period.

Attractive Opportunities in the CNG, RNG, and Hydrogen Tanks Market

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Global CNG, RNG, and hydrogen tanks market Dynamics:

Drivers: Increasing tax incentives for CNG vehicles and infrastructure

In areas like North America and Asia Pacific, tax incentives have been improved and expanded. As an illustration, in May 2019, legislation pertaining to tax credits for Compressed Natural Gas (CNG) vehicles and refueling was updated and passed by the US government, in particular the state of Oklahoma. The tax credit now lasts through December 31, 2027, instead of just January 1, 2020. With this action, Oklahoma will continue to play a leading role in promoting natural gas as the preferred fuel for automobiles. As a result, the company's goods are anticipated to see a growth in demand while promoting cleaner air thanks to their focus on high-mileage and high-emission automobiles. The state and its residents benefit economically from the tax perks as well. Additionally, the Indian Oil Ministry lowered the Goods and Services Tax (GST) on CNG vehicles from 28% to 5% in December 2019. This action inadvertently increased the appeal of gas cars in India. Since natural gas produces 25% less carbon dioxide (CO2) per unit of energy produced compared to gasoline, countries are primarily motivated to offer these enhanced tax incentives to reduce CO2 emissions. The demand for CNG tanks and related items has increased as a result.

Restraints: High cost of composite material tanks and regulatory approvals

Strong competition is a hallmark of the composites market and the end-use industries it serves, where commercial considerations are key factors in decision-making. Operating expense (OPEX) and capital expenditure (CAPEX) are the two main commercial considerations. However, establishing economies of scale is difficult because of the high cost of raw materials and the high manufacturing cost. As a result, there is a high demand in the market for composites for cost-efficient design and production technology. Potential market participants are discouraged from entering the business because carbon fiber and glass fiber, two essential materials for Type 3 and Type 4 CNG composite tanks, demand a significant capital investment. The high cost of these raw materials directly affects how much Type 3 and Type 4 CNG composite tanks cost to make overall. Finding low-cost methods of creating carbon and glass fiber composites thus becomes a major problem for producers all over the world.

 Manufacturers must obtain approval for their composite cylinder types from regulatory bodies or independent inspection authorities. Adhering to safety standards is essential to prevent accidents and ensure the protection of human life and property. Instances of blast accidents are often linked to the use of substandard CNG cylinders and kits in vehicles, potentially hindering demand and restricting the growth of the CNG, RNG, and hydrogen tanks market. These factors may ultimately impact the overall market for CNG, RNG, and hydrogen tanks.

Opportunities: Development of low-weight transportation tanks

As both use electric motors to move the wheels, hydrogen-powered vehicles and electric cars have certain similarities. The main contrast, though, is in how they store their energy. While hydrogen cars store electricity in the form of hydrogen that is then turned into electrical power using a fuel cell, electric cars rely on traditional batteries. At the moment, the price of storage tanks for hydrogen automobiles is still high, which makes their widespread adoption difficult. The cost of these tanks, which range from USD 4,000 to 4,500 for a 5-kg capacity, dramatically raises the price of the entire car. Current research is focused on creating lightweight Class 4-cylinder carbon fiber tanks that minimize costs by lowering gas storage pressure in order to address this issue. The Luxfer Group (UK), lljin (South Korea), Quantum Fuel System Technologies (US), and Hexagon Lincoln (US) are well-known producers of hydrogen storage tanks for automobiles.

Challenges: Already well-established infrastructure for electric cars

Hydrogen-powered vehicles have become more popular in nations like South Korea and Japan, in part because of government subsidies and funding for infrastructure expansion. California in the US also provides incentives for vehicles fueled by fuel cells. Despite the fact that creating hydrogen from natural gas is considered a sustainable technology, some experts contend that since electric automobiles rely on batteries rather than fossil fuels, they are more environmentally friendly than hydrogen-powered vehicles. However, initiatives are being made to generate hydrogen using sustainable resources. Due to their three times worse energy efficiency, lower volumetric efficiency, and higher weight than electric vehicles, hydrogen-powered vehicles have some disadvantages. Insufficient refueling infrastructure also hinders market expansion. Electric vehicles may take the role of hydrogen vehicles if global hydrogen technology does not progress significantly. In anticipation, companies like Toyota, Hyundai, and Honda are already considering developing electric vehicles alongside hydrogen-powered ones.

CNG, RNG and Hydrogen tanks market: Ecosystem

CNG tanks to account for the largest market share, in terms of value and volume

The CNG gas segment held the dominant position in the CNG, RNG, and hydrogen tanks market in both value and volume terms. This was primarily due to increasing awareness and preference for CNG gas compared to other options. Moreover, CNG is considered less hazardous for fuel and transportation tanks when compared to hydrogen gas. However, the market size of the gas type segment witnessed a decline in 2020, both in terms of value and volume, attributed to the recession in 2020. Despite of the recession, it is anticipated that the hydrogen gas segment will exhibit the highest growth rate in terms of volume after 2021, throughout the forecast period.

Metal accounted for the largest share in terms of value and volume

In 2022, the metal material market dominated the CNG, RNG, and hydrogen tanks market both in terms of value and volume. This is because the technology for manufacturing metal-based tanks is well-established and relatively cost-effective compared to glass and carbon fiber-based alternatives. Metal-based tanks also boast numerous advantages, including exceptional durability, high stiffness, remarkable toughness, and resistance to fatigue. Although, Carbon fiber based tanks are expected to witness the maximum growth in the forecasted period.

Type 4 tanks are expected to grow with the highest growth rate

Type 1 tank type dominated the market in 2022, due to well-established and relatively cost-effective manufacturing process and technology. But, Type 4 tank type is expected to grow with the maximum CAGR of 16.7% in terms of value during the forecasted period. This growth rate is attributed to a combination of their lightweight construction, safety features, large storage capacity, and technical developments.

Asia Pacific holds the maximum share along with the maximum CAGR in terms of volume

Asia Pacific held the leading position in the global CNG, RNG, and hydrogen tanks market, primarily driven by the substantial demand for CNG tanks. The Asia Pacific region boasts well-established CNG tank manufacturing technology and infrastructure, surpassing that of hydrogen and RNG. Notably, the number of CNG vehicles in countries like China, India, Pakistan, and Thailand has been witnessing remarkable growth, supported by government incentives and favorable policies.

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Rising environmental awareness increases natural gas demand

Strict environmental regulations are a significant driver for the growing demand for CNG vehicles worldwide. While gasoline, diesel, and petroleum products have harmful environmental impacts, natural gas is considered a more sustainable alternative, reducing carbon emissions, slowing down global warming, and minimizing greenhouse gas (GHG) emissions. According to the U.S. Environmental Protection Agency (EPA), CNG vehicles can reduce greenhouse gas emissions by up to 25%. To promote the usage of natural gas as a cleaner fuel and mitigate the risks associated with gasoline and diesel, the US government has established various environmental conservation rules and regulations. Countries with substantial natural gas reserves are recognizing the advantages of using CNG as an alternative fuel due to its lower CO2 emissions compared to petrol or diesel.

Moreover, stricter environmental regulations that mandate the use of cleaner, low-emission fuels, and stringent engine manufacturer specifications are expected to further drive the demand for hydrogen gas during the forecast period. For instance, the European Commission has introduced Euro VIl standards, aiming to reduce NOx emissions by 4% for cars and 2% for vans and trucks by 2030. Similarly, India plans to reduce carbon emissions by 1 billion tons by 2030, emphasizing the significance of cleaner fuel options.

Key Market Players

The key players in the global composites market are:

• - Worthington Industries, Inc. (US)
• - Faber Industrie SpA (Italy)
• -Luxfer Group (UK)
• - Hexagon Composites ASA (Norway)
• - Everest Kanto Cylinders Ltd. (India)

These companies are involved in adopting various inorganic and organic strategies to increase their foothold in the composites industry. The study includes an in-depth competitive analysis of these key players in the CNG, RNG, and hydrogen tanks market, with their company profiles, recent developments, and key market strategies.

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Scope of the Report

The study categorizes the CNG, RNG, and hydrogen tank market based on Precursor Type, Source, Resin Type, Manufacturing Process, End-Use Industry, and Region.

By Material Type:

• Metal
• Glass Fiber
• Carbon Fiber

By Tank Type:

• Type 1
• Type 2
• Type 3
• Type 4

By Gas Type:

• CNG
• RNG
• Hydrogen

By Application:

• Fuel Tank
• Transportation Tank

By Region:

• North America
• Asia Pacific
• Europe
• Latin America
• Middle East & Africa

Recent Developments

• In May 2023, Luxfer Group has manufactured a new type 4 cylinder. The G-Stor Go H2 features a proven boss-to-liner interface that results in minimal permeation and is a certified, cost-effective hydrogen storage solution ideal for fuel cell transit buses, heavy-duty trucks, vans, bulk gas transport, boats, and trains.
• In January 2023, Hexagon purus opens a new hydrogen cylinder manufacturing facility in westminster, maryland, usa, with the annual production of up to 10,000 cylinders for heavy-duty vehicle applications and will employ up to 150 skilled workers. The new facility expands cylinder production capabilities and capacity and allows for further expansion by adding additional production equipment as demand for hydrogen storage cylinders continues to grow.
• In February 2021, Worthington industries manufactured Thermaguard hydrogen cylinders. ThermaGuard™ hydrogen cylinders are optimized to meet the unique needs of hydrogen fuel. Meticulously developed using Worthington’s aerospace-grade standards, ThermaGuard hydrogen cylinders are proven more efficient means of transporting and storing high-pressure hydrogen gas.
• In March 2021, Luxfer Group completed the acquisition of SCI (Structural Composites Industries, which is a business u of Worthington Industries). This acquisition is aimed to enhance the capabilities of the hydrogen and CNG gas businesses of Luxfer Group.
• In January 2021, Worthington Industries, Inc. announced the acquisition of PTEC Pressure Technology GmbH. This acquisition is expected to develop the system capabilities of Worthington Industries, Inc.

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