The natural gas engine oil (NGEO) market is projected to grow at almost a 4% CAGR out to 2026, driven by the global shift toward renewable energy that’s been accelerated by the Russian/Ukraine war.
“Numerous governments around the world had already introduced initiatives to build renewable fuel sources such as biogas, biomethane, landfill gas, and, more recently, green hydrogen,” says David Tsui, Project Manager in our Energy division. “Now, with bans on Russian gas and soaring gas prices, those initiatives have been made a priority.”
OEMs, Tsui notes, are ready to capitalize on the trend: INNIO, for example, has already launched the “ready for H2” program with its Jenbacher Type 4 gas engines. Type 4 has the option to operate up to 100% hydrogen; all of INNIO’s other engines have the option to operate with up to 25% hydrogen fuel mix, along with natural gas.
Another reason for the surge in NGEO demand: When renewable energy in the form of solar and wind power falls short, they require an auxiliary power plant to meet power demands when renewable production is low – and natural gas engines fit that role well.
“They’re easy to cycle and are typically smaller in size than a traditional natural gas turbine engine,” Tsui says. “And while traditional natural gas turbines may be more efficient, power cycling tends to add extra wear and tear on the engines. Turbines also typically take longer to power cycle than natural gas engines. The rapid growth in solar and wind installations has, in turn, spurred growth in new natural gas engine installations and NGEO demand.”
Growth is higher in countries that produce natural gas, Tsui notes, but there are still increases in nations that import NG or LNG, as both are fuel sources that have a lower carbon footprint than traditional coal and will help nations meet their Paris Agreement to lower GHGs.
For more information, check out Kline’s just-published Natural Gas Engine Oils: Global Market Analysis and Opportunities report. A comprehensive analysis of the global NGEO lubricants market in the wake of record natural gas prices and global turmoil, it focuses on key trends, developments, changes, challenges, and business opportunities.