LNG Engine Market to Reach $10.7 billion, Globally, by 2033 at 7.1% CAGR: Allied Market Research

The LNG engine market is driven by increasing demand for cleaner fuels, stringent emissions regulations, and the growing adoption of LNG-powered vessels and trucks for sustainability. The rise in global LNG production and infrastructure development further supports market expansion. However, high initial investment costs, limited refueling infrastructure, and fluctuations in LNG prices act as key restraints. Despite these challenges, advancements in LNG engine technology, government incentives for green energy adoption, and increasing interest in LNG as a transition fuel present significant opportunities. Emerging markets and the expansion of LNG bunkering facilities further enhance growth prospects in the industry.

WILMINGTON, Del., March 25, 2025 /PRNewswire/ -- Allied Market Research published a report, titled, "LNG Engine Market by Type (Spark-ignited, Diesel-ignited, Direct Gas Injection), by Application (Marine, Power Generation, Others): Global Opportunity Analysis and Industry Forecast, 2024-2033". According to the report, the "LNG engine market" was valued at $5.4 billion in 2023, and is estimated to reach $10.7 billion by 2033, growing at a CAGR of 7.1% from 2024 to 2033.

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Macroeconomic & Geopolitical Impact

The increasing adoption of LNG (Liquefied Natural Gas) engines is significantly shaping macroeconomic and geopolitical dynamics. From a macroeconomic perspective, LNG-powered engines are reducing dependence on oil-based fuels, particularly in transportation and maritime sectors, leading to lower fuel costs and enhanced energy security. According to the International Energy Agency (IEA), global LNG demand is expected to rise by over 20% by 2030, driven by growing industrial and transportation applications. This transition is also fostering new job creation in LNG infrastructure and supply chains, with investments in LNG bunkering stations expected to reach $12 billion by 2027.

Geopolitically, LNG engines are reshaping energy trade flows, with major producers like the United States, Qatar, and Australia increasing LNG exports to reduce European and Asian dependence on Russian pipeline gas. The EU imported over 155 billion cubic meters (bcm) of LNG in 2023, a 60% rise from 2021, signaling a strategic shift away from pipeline gas. Countries investing in LNG-powered fleets, such as China and India, are also reducing their exposure to volatile crude oil prices, strengthening their economic resilience.

Report coverage & details:

The Spark-ignited segment is expected to lead throughout the forecast period with a CAGR of 7.1%.

By type, the Spark-ignited segment was the highest revenue contributor to the market growing with a CAGR of 7.1%. One of the primary reasons for the growing demand for spark-ignited LNG engines is the global push toward reducing greenhouse gas (GHG) emissions and improving air quality. Governments and regulatory bodies worldwide are enforcing stricter environmental regulations to curb emissions from marine, automotive, and industrial sectors. The International Maritime Organization's (IMO) MARPOL Annex VI mandates a global sulfur cap of 0.5% in marine fuels since January 1, 2020, significantly reducing sulfur oxide (SOx) emissions from ships. This has accelerated the shift toward cleaner alternatives like LNG-powered vessels. Similarly, in the automotive sector, the Euro VI standard in Europe and the EPA (Environmental Protection Agency) emission standards in the U.S. impose stringent limits on nitrogen oxides (NOx), particulate matter (PM), and greenhouse gas (GHG) emissions from heavy-duty vehicles. These regulations have led to a growing adoption of LNG engines, which produce lower emissions compared to diesel and traditional marine fuels. As a result, industries worldwide are increasingly investing in LNG-powered solutions to comply with these evolving regulatory requirements while also achieving long-term sustainability goals.

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The Power Generation segment is expected to lead throughout the forecast period with a CAGR of 7.0%.

By application, the Power Generation segment was the highest revenue contributor to the market growing with a CAGR of 7.0%. LNG engines are increasingly being adopted in power generation as a cleaner and more efficient alternative to conventional fossil fuels like coal and diesel. Compared to coal-fired power plants, LNG-powered engines can reduce carbon dioxide (CO₂) emissions by 40-50% and virtually eliminate sulfur oxides (SOx) and particulate matter. Additionally, natural gas power plants using LNG engines operate with higher efficiency—reaching up to 60% in combined cycle configurations, compared to 33-40% efficiency for coal plants. Diesel generators, widely used for backup power, are also being replaced by LNG engines due to their lower operational costs and reduced environmental footprint. The increasing availability of LNG infrastructure, along with government policies supporting clean energy transitions, is further accelerating the adoption of LNG engines in power generation worldwide.

Asia-Pacific to maintain its dominance by 2033 growing with a CAGR of 7.5%.

Asia-Pacific was the highest revenue contributor, growing at a CAGR of 7.5%. Spark-ignited segment is gaining popularity in Asia-Pacific. Governments across Asia-Pacific are implementing stringent environmental policies to reduce greenhouse gas emissions. Spark-ignited LNG engines produce lower emissions compared to traditional diesel engines, making them an attractive choice to meet these regulatory standards. For instance, India announced its commitment to achieving net-zero carbon emissions by 2070 during the COP26 Climate Summit in November 2021. Additionally, the Asia-Pacific Partnership on Clean Development and Climate includes major economies like China, India, and Japan, collectively accounting for over 50% of the world's greenhouse gas emissions, energy consumption, GDP, and population. This partnership aims to accelerate the development and deployment of cleaner, more efficient energy technologies across various sectors, including transportation and power generation. These initiatives highlight the region's commitment to environmental sustainability and the role of LNG engines in achieving emission reduction targets.

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Investment Opportunities in LNG Engine Market

The International Maritime Organization (IMO) has set ambitious targets to cut greenhouse gas (GHG) emissions by 50% by 2050 (compared to 2008 levels) and achieve net-zero emissions around 2050. One of the key policies driving this transition is the Carbon Intensity Indicator (CII), which came into effect in January 2023. This regulation requires ships above 5,000 gross tonnage to annually assess and improve their carbon intensity (CO₂ emissions per cargo capacity and distance traveled). Additionally, LNG-powered trucks and buses are gaining traction as cleaner alternatives to diesel. Countries like China, India, and the U.S. are expanding LNG refueling networks, boosting investment prospects in engine manufacturing and fleet conversions.

Moreover, investment in LNG storage, distribution, and refueling stations is expanding, with Europe and Asia leading in new terminal constructions. For instance, India is making significant strides in expanding its LNG fueling infrastructure, with plans to establish 1,000 LNG fueling stations by 2030. This initiative is part of the country's broader strategy to reduce reliance on diesel, cut carbon emissions, and promote cleaner transportation. The push for LNG adoption aligns with India's commitment to achieving net-zero emissions by 2070 and reducing oil imports, which account for nearly 85% of its crude oil demand. Currently, India has more than 50 operational LNG fueling stations, with major oil and gas companies like Indian Oil Corporation (IOC), GAIL, and Petronet LNG leading the expansion. The government has also introduced incentives and policy support, including tax reductions on LNG and relaxed regulations for LNG-powered commercial vehicles. The heavy-duty trucking sector, which consumes around 30% of the country's diesel, is a key target for LNG adoption, with companies like Tata Motors and Ashok Leyland developing LNG-compatible truck models. This expansion presents significant investment opportunities in LNG logistics, infrastructure, and supply chains, including LNG storage, distribution networks, and cryogenic tank manufacturing.

Key Industry News

• In March 2025, Indonesia initiated a $1.5 billion project to transition its power plants from diesel to liquefied natural gas (LNG), aiming to enhance energy security and reduce reliance on costly diesel imports. The project, spearheaded by PLN EPI, a subsidiary of the state-owned utility Perusahaan Listrik Negara (PLN), focuses on supplying 41 power plants with a combined capacity of 2,148 MW, primarily located across East Indonesia. Given the region's geographical challenges, the initiative will employ a hub-and-spoke distribution model, ensuring efficient LNG delivery to remote islands. By shifting to LNG, Indonesia seeks to cut fuel costs, lower emissions, and improve energy sustainability. The transition aligns with the country's broader strategy to diversify its energy mix and reduce dependence on fossil fuels. The project is expected to commence operations between 2026 and 2027, marking a significant milestone in Indonesia's energy transition efforts.
• In November 2024, Blue Energy Motors, an Indian startup specializing in LNG-fueled trucks, raised $100 million by January 2025 to expand production capacity. The company tripled sales to 3,000 LNG-powered trucks in the following financial year and launched its first electric truck. Partnering with Italy's Iveco Group for LNG truck engines, Blue Energy's trucks emitted 30% less CO₂ and significantly reduced particulate matter and sulfur oxides compared to diesel counterparts.
• QatarEnergy LNG (formerly Qatargas) is actively involved in global LNG projects, expanding its reach by delivering LNG to new markets and developing carbon sequestration facilities at Ras Laffan to reduce emissions. The company focuses on enhancing LNG infrastructure and strengthening partnerships to meet the rising demand for cleaner energy sources. As part of its expansion efforts, QatarEnergy LNG signed a significant agreement with PetroVietnam Gas in April 2024 to supply LNG to Vietnam's Thi Vai LNG terminal, marking an important step in Vietnam's transition to natural gas. This deal reinforced QatarEnergy LNG's role as a key supplier in the global LNG market and demonstrated its commitment to supporting energy security in Southeast Asia.

Key Players: -

• Cummins Inc.
• Caterpillar Inc.
• Wartsila
• Rolls-Royce Holdings plc
• Mitsubishi Heavy Industries, LTD
• Siemens Energy
• MAN Energy Solutions
• Hyundai Heavy Industries Co., Ltd.
• Scania AB.
• FPT Industrial

The report provides a detailed analysis of these key players in the global LNG engine market. These players have adopted different strategies such as new product launches, collaborations, expansion, joint ventures, agreements, and others to increase their market share and maintain dominant shares in different regions. The report is valuable in highlighting business performance, operating segments, product portfolio, and strategic moves of market players to showcase the competitive scenario.

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