Compressed Natural Gas Market - Global Forecast 2025-2030

The Compressed Natural Gas Market size was estimated at USD 35.42 billion in 2024 and expected to reach USD 39.21 billion in 2025, at a CAGR 10.40% to reach USD 64.16 billion by 2030.

Global natural gas consumption returned to robust growth in 2024, reaching record highs and accounting for nearly 40 percent of the increase in global energy demand, underscoring the fuel’s critical role in balancing energy security and environmental objectives. Amid a dynamic supply landscape marked by tighter fundamentals and geopolitical uncertainties, CNG has emerged as a strategically versatile solution that leverages existing gas infrastructure and offers scalable deployment across multiple sectors.

Compressed natural gas, the pressurized form of pipeline-quality methane, has gained traction as a lower-carbon alternative to gasoline and diesel across transportation, manufacturing processes, oil and gas operations, and utility services. Technological advances in engine management systems and improvements in cylinder materials have dramatically enhanced CNG’s performance profile and safety credentials over the past decade. Coupled with CNG vehicle market shares more than tripling in some key regions in recent years, this strengthens the fuel’s position as both an economic and environmental solution for global fleets.

Today, CNG is available across a wide spectrum of use cases, from light-duty passenger vehicles and heavy-duty trucks to onsite mother-daughter compression stations and long-distance virtual pipelines. Its modular distribution options and compatibility with renewable feedstocks such as biomethane position CNG as a cornerstone of a diversified, resilient energy transition pathway.

Recent shifts in demand patterns and technological innovation have converged to transform the CNG landscape. In the first half of 2025, Europe and North America led a resurgence in gas consumption-Europe’s gas burn rose by nearly 10 percent year-on-year in the 2024/25 heating season, while North America recorded all-time highs for gas use in buildings and power generation-highlighting both the strategic importance of natural gas and its downstream opportunity for CNG infrastructure expansion. These evolving demand dynamics underscore the critical role that CNG can play in optimizing supply portfolios by absorbing seasonal surpluses and enhancing energy security.

Technology breakthroughs are further catalyzing CNG’s momentum. Advanced compression systems now integrate AI-driven analytics and remote monitoring to optimize throughput, reduce maintenance downtime, and improve safety margins. These digital overlays, championed by leading equipment providers, are elevating onsite compression and cascade storage solutions to new levels of reliability and cost efficiency. As smart infrastructure becomes the norm, CNG assets can be seamlessly integrated into broader energy management platforms, enabling predictive maintenance and real-time performance insights.

Policy environments are also shifting in CNG’s favor. Incentive frameworks at federal and state levels, such as grants for alternative fueling stations and renewable gas credits, are accelerating the deployment of both conventional CNG and renewable CNG projects. Energy majors are leading the way: Shell’s first renewable CNG fueling site in Carson, California, leverages biomethane from anaerobic digestion to deliver up to 250 percent life-cycle greenhouse gas reductions compared to diesel, demonstrating the tangible environmental benefits of pairing CNG with renewable gas sources.

Trade policy developments in 2025 have introduced compounding cost pressures on CNG infrastructure capital and equipment. On June 4, 2025, the United States doubled its Section 232 national security tariffs on steel and aluminum imports and derivative products from 25 to 50 percent, with a narrow exception for U.K. shipments. This escalation substantially increased the landed cost of high-pressure cylinders, pipeline steel, and compressor components critical to CNG station construction. As a result, operators have faced immediate spikes in project budgets and procurement timelines, challenging previously assumed cost benchmarks.

In parallel, Section 301 tariff measures on Chinese-origin machinery have continued to impact the cost of onsite mother-daughter compression units and specialized CNG dispensers classified under HTS chapters 84 and 85. Unless importers secured narrow exclusions through a USTR process that concluded May 31, 2025, these machines have carried a 25 percent duty premium, injecting further uncertainty into the equipment supply chain and capital planning cycles.

Taken together, these tariff actions have delayed several greenfield station rollouts and prompted project teams to explore alternative sourcing strategies. Companies are increasingly pursuing domestic manufacturing partnerships, leveraging tariff exclusion processes, and staging incremental site development to mitigate up-front financial exposure, illustrating the need for strategic supply-chain resilience in a dynamic trade environment.

The market’s segmentation by end use reveals a rich tapestry of CNG opportunities across transportation and industry. Automotive applications now span everything from dedicated light-duty bi-fuel passenger vehicles to heavy-duty fleet trucks, reflecting OEM investments and aftermarket upfits that optimize durability and emissions performance. In manufacturing, CNG’s integration extends into chemicals, food and beverage, and metal fabrication processes, where lower carbon intensity and fuel price stability support operational efficiencies. Within the oil and gas sector, CNG plays distinct roles upstream in well-site power and downstream in refinery cogeneration, leveraging associated and non-associated gas streams to fuel critical operations. Meanwhile, utilities are deploying CNG for both electricity generation peaking support and industrial heating, enabling flexible dispatch and emissions mitigation in combined heat and power configurations.

Source segmentation underscores CNG’s adaptability to feedstock variations. Associated gas from oil production, often flared or vented, is increasingly conditioned and compressed into CNG for onsite use or transport, converting waste emissions into value. Non-associated gas reserves, whether conventional or shale-sourced, feed pipeline networks that supply centralized compression facilities and virtual pipeline operations, broadening access in regions lacking traditional distribution infrastructure.

Distribution method segmentation highlights the modularity of CNG logistics. CNG cascade trailers enable remote fill-and-return fueling for fleets in underserved areas, while onsite mother-daughter compression stations optimize volume for high-demand sites. Pipeline distribution continues to serve urban centers, and virtual pipeline models use cryogenic trucks or repurposed LNG carriers to deliver CNG to islanded markets, showcasing a flexible toolkit for fuel delivery across geographies and use cases.

In the Americas, robust government incentives and fleet decarbonization mandates have accelerated CNG uptake. The U.S. and Canada have invested heavily in refueling infrastructure grants and regulatory frameworks that favor lower-emission alternatives in municipal and corporate fleets. Natural gas demand in North America grew by an estimated 2.5 percent year-on-year in the first half of 2025, reinforcing feedstock availability for CNG station networks across major corridors. Complementing federal programs, Chevron’s plan to rebrand or open more than thirty CNG sites by 2025 illustrates how integrated energy companies are stepping into the retail CNG space to diversify their offerings and meet rising demand.

Across Europe, Middle East and Africa, gas security concerns and decarbonization targets have spurred renewed interest in CNG transport solutions. Italy exemplifies this trend with a projected 265 percent increase in gasoline-CNG vehicles between 2021 and 2025, reflecting supportive policies and OEM commitments to alternative fuel variants. While Europe’s LNG imports surged to near all-time highs in 2025 to replenish inventories, the concurrent expansion of CNG refueling infrastructure is enabling regional operators to leverage cleaner gaseous fuels in commercial fleets and public transit.

In Asia-Pacific, industrial and power sector demand drove natural gas consumption up around six percent in 2024, although high spot prices weighed on broader markets. Yet in targeted pockets such as India, CNG vehicles more than tripled their market share over the past five years, supported by aggressive station rollout programs and robust policy incentives. This dual dynamic-strong industrial gas demand and selective CNG mobility growth-illustrates the region’s uneven but promising CNG adoption landscape.

Major integrated energy companies are redefining the CNG landscape by integrating renewable gas and retail operations. Shell’s launch of its first renewable CNG fueling site in Carson, California, exemplifies how bio-methane from anaerobic digestion can achieve up to 250 percent life-cycle greenhouse gas reductions, setting a new bar for sustainable transport fuels. Chevron’s commitment to rebrand or open over thirty CNG sites by 2025 further underscores the strategic pivot of upstream and downstream majors toward low-carbon gaseous fuels, leveraging their logistics and supply chain capabilities to scale CNG projects effectively.

Infrastructure and network operators are consolidating to expand footprint and service reliability. Trillium Energy Solutions’ acquisition of U.S. Energy’s 41-station CNG network in fifteen states demonstrates the appetite for scale in compressed gas dispensing services, providing enhanced access and 24/7 operational support for commercial fleets. Similarly, VNG’s deployment of CNG capacity at existing Valero and Shell retail outlets in Texas highlights the impact of alternative fuel grants and public–private collaboration in driving network densification.

On the equipment side, Chart Industries’ planned merger with Flowserve to create an industrial process technologies leader valued at nearly $19 billion reflects the critical importance of scale and integrated solutions in serving CNG and LNG markets. Chart’s record $5.14 billion backlog and 17.3 percent order growth in Q1 2025 signal sustained demand for high-pressure storage, heat exchange, and compression equipment that underpins both conventional and renewable CNG deployments.

OEMs are also reinforcing CNG’s mobility value proposition. Ford’s factory-installed CNG prep package on its F-150 lineup, available since 2015, continues to attract fleet buyers seeking a seamless, manufacturer-backed upfit solution that balances payload and range requirements while reducing fuel costs and emissions.

Industry leaders should prioritize resilient supply chains by diversifying steel and compression equipment sources to mitigate the impact of heightened Section 232 and Section 301 tariffs. Establishing strategic partnerships with domestic fabricators or pursuing tariff exclusion processes early in the procurement cycle can lock in more predictable capital expenditure profiles and reduce project delays.

To capitalize on evolving market opportunities, companies must expand modular station designs-such as mobile cascade units and virtual pipeline solutions-that enable rapid deployment in underserved regions without the need for extensive fixed infrastructure. Integrating AI-driven performance analytics and remote operation capabilities will not only enhance uptime but also support data-driven optimization of fleet fueling patterns and asset maintenance schedules.

Engaging proactively with policymakers to shape incentive frameworks for both conventional and renewable CNG will sustain long-term project economics. Stakeholders should advocate for credits tied to renewable gas content, streamlined permitting for station construction, and inclusion of CNG alongside other low-carbon alternatives in clean fuel standards. Finally, financing models that blend grants, tax incentives, and private capital can accelerate the roll-out of next-generation CNG networks while aligning risk and return for investors.

This research leverages a mixed-methods approach combining extensive secondary data analysis, primary stakeholder interviews, and rigorous validation protocols. Secondary sources included quarterly gas market reports, tariff proclamation texts, company press releases, and industry news articles. Primary insights were gathered through in-depth interviews with senior executives from CNG infrastructure providers, OEMs, and government agencies to capture emerging trends and strategic priorities.

Data points were triangulated across multiple sources, including IEA short-term gas market outlooks, USTR tariff filings, and equipment manufacturers’ financial disclosures, ensuring robust cross-verification. Segmentation frameworks were developed to map end-use, source, and distribution channels, guiding focused analyses of demand drivers and operational challenges.

Key findings underwent review by an expert panel of industry consultants and technical advisors, and insights were stress-tested through scenario modeling of tariff impacts and policy shifts. Limitations include the evolving nature of trade policies and potential delays in infrastructure financing, which underscore the importance of continuous market monitoring for updated intelligence.

Compressed natural gas stands at a pivotal juncture where strategic investments, policy incentives, and technological breakthroughs converge to unlock new growth trajectories. Despite recent tariff headwinds, the inherent modularity and environmental advantages of CNG-especially when paired with renewable feedstocks-position it as a key bridge fuel in the transition to a low-carbon economy.

Regional dynamics in the Americas, EMEA, and Asia-Pacific underscore that success hinges on tailored approaches-from leveraging domestic feedstock in North America to capitalizing on robust OEM and policy support in Europe and selective mobility hotspots in Asia. As equipment providers consolidate and energy majors embrace renewable CNG, the market is poised for continued maturation.

For industry leaders, the imperative is clear: optimize supply chain resilience, embrace digital innovation, and foster policy environments that recognize CNG’s strategic value. By doing so, stakeholders can harness CNG’s full potential to meet evolving energy security, economic, and environmental goals.

To take the next step toward unlocking the full potential of compressed natural gas and securing strategic insights that drive competitive advantage, reach out to Ketan Rohom (Associate Director, Sales & Marketing) to purchase the comprehensive market research report and elevate your organization’s energy strategy today.