Gas Engine Market is expected to reach US$ 8,095.93 Million by 2031

Rising Production of Natural Gas Boosts Gas Engine Market Growth

According to our latest market study on "Gas Engine Market Size and Forecast (2021–2031), Global and Regional Share, Trend, and Growth Opportunity Analysis — by Fuel Type, Power Output, and End User," the market was valued at US$ 5,298.16 million in 2024 and is anticipated to reach US$ 8,095.93 million by 2031; it is estimated to register a CAGR of 6.4% during 2025–2031. The report includes growth prospects in light of current gas engine market trends and driving factors influencing the market growth.

The demand for gas engines in the power generation industry is rising owing to new emission control regulations. The industrial sector, including chemicals, metals, and manufacturing industries, is a significant contributor to the rising demand for gas engines. The natural gas production, which is required for the functioning of gas engines, is growing at a significant rate. For instance, as stated by the International Energy Agency (IEA) in October 2024, the global demand for natural gas is grew at a faster rate in 2024 compared to the previous two years, which were significantly impacted by the global energy crisis. The IEA forecasts a global gas demand increase of over 2.5% in 2025, with similar growth expected in 2025. This surge is primarily driven by fast-growing markets in Asia, along with a recovery in industrial gas demand in Europe, although it still lags behind pre-crisis levels. This increasing demand underscores the growing prospects within the gas engine market as industries pursue more efficient and reliable power solutions to satisfy the rising need for natural gas across different sectors. The increase in demand further emphasizes the importance of advanced gas engine technologies to optimize operations and ensure reliable energy delivery.

Gas Engine Market Analysis – by Geography, 2024

Source: The Insight Partners Analysis

The US natural gas production increased by 4% in 2023, or 5.0 billion cubic feet per day (Bcf/d), reaching an average of 125.0 Bcf/d, as reported in the latest update of the Natural Gas Monthly. This report includes production data through December 2023. In 2023, three key regions—Appalachia, Permian, and Haynesville—were responsible for 59% of the total natural gas production in the US, consistent with 2022 figures, according to the Drilling Productivity Report (DPR). The DPR tracks gross natural gas withdrawals from selected onshore regions. The increased supply of natural gas boosts the demand for more efficient and advanced engine technologies. The development of robust gas engine solutions is critical to meeting the rising production levels and ensuring that energy generation and industrial applications can effectively utilize the growing natural gas output. Thus, a continuous surge in demand from developing and developed countries drives gas engine market growth.

Major stakeholders in the gas engine ecosystem comprise raw material suppliers, engine manufacturers, generator manufacturers, end users, and regulatory bodies. The evolving technology landscape and market demands have propelled businesses to enhance their efficiency. The environmental concerns, the government's focus on net zero, and manufacturers' focus on developing high-performance, cost-effective, and sustainable solutions drive the gas engine market growth. Raw material suppliers provide the essential materials needed to manufacture gas engines and generators. They supply metals, alloys, and other raw materials that are used in the production of engine components, such as cylinders, pistons, and turbine blades. These ensure a consistent supply of high-quality materials at competitive prices, directly affecting the manufacturing process and the cost of the final product.

In addition, gas engine manufacturers design and produce gas engines that are used in power generation. They integrate components from suppliers into fully functional engines and ensure compliance with industry standards and regulations. These manufacturers focus on improving engine performance, fuel efficiency, and emissions to meet the needs of the energy sector. Caterpillar Inc., Cummins Inc., MAN SE, and Mitsubishi Heavy Industries are among the leading manufacturers of gas engines. Generator manufacturers specialize in creating power generation systems that include gas engines. They build complete units that are capable of producing electricity by converting energy from gas engines. These manufacturers work closely with engine makers and other stakeholders to produce reliable, efficient, and environmentally friendly generator systems for both industrial and commercial use.

The scope of the gas engine market report focuses on North America (the US, Canada, and Mexico), Europe (the UK, Germany, France, Italy, Russia, and the Rest of Europe), Asia Pacific (South Korea, China, India, Japan, Australia, and the Rest of Asia Pacific), Middle East and Africa (South Africa, Saudi Arabia, UAE, and the Rest of Middle East), and South and Central America (Brazil, Argentina, and the Rest of South and Central America). In Europe, Germany held the largest gas engine market share in 2024. As a result of potential growth in the country's energy sector, the gas engine market in Germany is anticipated to witness significant development in the coming years.

The gas engine market in Europe is segmented into the UK, Germany, Italy, France, Russia, and the Rest of Europe. Germany, the UK, France, and Italy are at the forefront of the gas engine market in Europe. Strong adoption of gas engines for utilities, the remote sector, and industrial equipment is likely to drive the gas engine market in the region. Also, the strong presence of prominent engine manufacturers in Europe, such as INNIO, Liebherr, and MAN SE, is bolstering the market growth. Stringent pollution norms and rising diesel engine pollution are prompting industries and the utility sector to use natural gas for engines. Further, companies are developing advanced gas engines, majorly for power generation. For instance, in February 2025, Rolls-Royce completed the launch of its upgraded mtu Series 1600 platform, which offered up to 40% more power than its predecessor. The platform was known for its powerful performance, featuring the highest power density in its class, with the base engine 12V1600 delivering up to 996 kWm. It was also sustainable, providing up to a 90% reduction in CO2 emissions when using HVO fuel.

The platform was flexible, making it suitable for a wide range of applications. This final release was for the 50 Hertz version, following the earlier announcement of the 60 Hertz version at the end of 2023. The mtu Series 1600 engine has been further developed to enhance performance, flexibility, life-cycle costs, and sustainability for the new generation, setting new industry standards. Designed to serve a wide variety of applications in the lower end of the power range, the Series 1600 is expected to strengthen the company’s position in the power generation market, aligning with its growth strategy to meet the world’s increasing power demands.

INNIO; Caterpillar Inc; Cummins Inc; Fairbanks Morse, LLC; Kawasaki Heavy Industries Ltd; Liebherr; MAN Energy Solutions SE; Mitsubishi Heavy Industries Ltd; R Schmitt Enertec GmbH; Wartsila Corp; 2G ENERGY AG; IHI Corp; Guascor Energy S.A.U.; Ningbo C.S.I. Power & Machinery Group Co., Ltd.; and Rolls-Royce Holdings Plc are among the key players profiled in the gas engine market report. Other major players were also studied and analyzed in the report to get a holistic view of the market and its ecosystem. The gas engine market forecast can help stakeholders plan their growth strategies. The market analysis provides detailed market insights, which help the key players strategize their growth.

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