Europe Compressed Natural Gas (CNG) Market Size, Share and Trends Analysis Report – Industry Overview and Forecast to 2032

Europe Compressed Natural Gas (CNG) Market Size

• The global Europe compressed natural gas market size was valued at USD 21.57 billion in 2024 and is expected to reach USD 27.54 billion by 2032, at a CAGR of 3.10% during the forecast period 2031.
• The market growth is largely fuelled by the rising adoption of alternative fuels to reduce greenhouse gas emissions and dependence on conventional fossil fuels. Increasing support from the European Union (EU) and national governments through incentives, subsidies, and stringent emission reduction targets is further boosting the adoption of compressed natural gas vehicles
• Furthermore, the expansion of compressed natural gas refuelling infrastructure, alongside technological advancements in vehicle conversion kits and composite cylinder manufacturing, is enabling greater penetration across both passenger and commercial vehicle fleets
• The demand for cost-effective and cleaner fuels is also accelerating market expansion, as fleet operators, logistics companies, and urban transport systems increasingly prefer compressed natural gas for long-term economic and environmental benefits

Europe Compressed Natural Gas (CNG) Market Analysis

• Compressed natural gas adoption in Europe is being driven by emission reduction targets and incentives for low-emission fleet conversions, particularly in light commercial and municipal vehicle fleets
• The availability of domestic gas supplies (associated and non-associated) and investment in refueling infrastructure are enabling fleet operators to consider compressed natural gas as a lower-cost, lower-emission fuel compared with diesel for many duty cycles
• The U.K. compressed natural gas is expected to witness the fastest growth rate of 9.12% in 2024, due to non-associated gas leads as the primary source, while refinery applications are the fastest growing segment, highlighting expanding industrial uses
• The non-associated gas segment held the largest revenue share in 2024, accounting for about 55.2%, driven by mature offshore and onshore gas fields and well-developed transmission networks that supply city-gas systems and refueling hubs

Report Scope and Europe Compressed Natural Gas (CNG) Market Segmentation 

Europe Compressed Natural Gas (CNG) Market Trends

Increasing Use in Sustainable Packaging

• European cities’ Low Emission Zones (LEZs) and clean-fleet tenders are encouraging municipal purchasers to evaluate compressed natural gas buses and waste trucks as a lower-emission alternative to older diesel fleets
• Sequential kits are gaining preference over venturi kits for modern petrol engines due to improved mixture control, lower HC/NOx, and closer performance parity with OEM systems
• Biomethane (upgraded biogas) is increasingly blended into the compressed natural gas supply chain, helping fleets meet renewable fuel mandates and improving the carbon profile of compressed natural gas on a well-to-wheel basis
• Modular and rapid-deployment refueling (truck-mounted mobile stations, depot slow-fill upgrades) are expanding options for fleets hesitant to invest in full public-station networks
• Weight-saving composite cylinders and advanced manifolds lower the payload penalty of onboard storage, making compressed natural gas viable for more vocational heavy-duty applications

Europe Compressed Natural Gas (CNG) Market Dynamics

Driver

Policy Pushes, Fleet Economics, and Biomethane Opportunities

• Growing consumer and regulatory preference for low-emission fuels is driving demand for compressed natural gas (CNG) across Europe. The adoption of compressed natural gas is increasingly seen as a cost-effective bridge solution between conventional fossil fuels and fully renewable alternatives, especially in transportation
• For instance, companies such as IVECO and Stellantis are scaling their production of compressed natural gas -compatible vehicles to meet rising demand from logistics operators and public transport authorities. These initiatives reflect industry efforts to align with EU decarbonization targets
• Policy incentives, including subsidies for compressed natural gas refueling infrastructure and tax benefits for fleet operators, are accelerating adoption. Governments in countries such as Italy, Germany, and Spain are investing in expanding refueling networks to ensure accessibility for light, medium, and heavy motor vehicles
• Eco-certification and compliance with European emissions regulations are becoming critical differentiators for fleet operators. Businesses that transition to compressed natural gas fleets benefit not only from lower operating costs but also from enhanced reputational gains in sustainability reporting
• The broader emphasis on achieving Europe’s 2030 and 2050 climate goals is reinforcing the role of compressed natural gas as a transitional fuel. With advancements in biogas upgrading to biomethane, the compressed natural gas supply chain is evolving into a more renewable ecosystem, further strengthening its long-term market potential

Restraint/Challenge

Infrastructure Gaps, Policy Inconsistency, and Upfront Conversion Costs

• Refueling station density remains uneven across Europe; insufficient public station networks in some countries slow private fleet adoption
• Inconsistent incentives and taxation policies across EU member states create an uneven commercial case for compressed natural gas conversion
• Upfront conversion kit cost and downtime for conversion/installation can deter smaller operators despite favorable lifetime economics
• Regulatory conflicts and policy gaps sometimes hinder large-scale feedstock sourcing and land use. These issues delay investment and slow adoption, especially in developing markets with less robust environmental legislation
• Many small and mid-sized fleet operators lack adequate knowledge about CNG/LNG systems, maintenance requirements, and safety procedures, slowing adoption despite available incentives

Europe Compressed Natural Gas (CNG) Market Scope

The market is segmented on the basis of source, kits, distribution, and end use.

• By Source

On the basis of source, the European compressed natural gas market is segmented into associated gas, non-associated gas, and unconventional gas. The non-associated gas segment held the largest revenue share in 2024, accounting for about 55.2%, driven by mature offshore and onshore gas fields and well-developed transmission networks that supply city-gas systems and refueling hubs. This stable, pipeline-delivered gas base gives European utilities and compressed natural gas station operators predictable, competitively priced feedstock and underpins the regional compressed natural gas supply chain.

The unconventional gas segment (shale/tight gas and other non-conventional resources) is expected to register the fastest growth through 2025–2032 as selected European projects and regional supply-diversification efforts expand, although development is uneven across countries due to regulatory and geological constraints.

• By Kits

On the basis of kits, the market is segmented into bi-fuel retrofit conversion kits, sequential injection kits, and dedicated OEM compressed natural gas systems. Bi-fuel retrofit kits (owner/operator conversions) remained the largest revenue contributor in 2024, driven by cost-sensitive fleet operators and a large installed base of light commercial vehicles and taxis that prefer quicker payback through retrofits.

Sequential injection kits are expected to grow at the fastest rate because they offer better efficiency and emissions control, but dedicated OEM compressed natural gas systems are expected to achieve the fastest CAGR as manufacturers supply factory-built compressed natural gas buses and trucks with improved warranties, higher capacities and total-cost-of-ownership (TCO) advantages.

• By Distribution Type

On the basis of distribution, the market is segmented into fast-fill public stations (mother & daughter networks), time-fill depot stations (captive fleets), and virtual-pipeline/mobile compressed natural gas (cascade trailers, daughter stations). Fast-fill public stations constituted the largest share in 2024, concentrated along urban corridors and major logistics routes where taxis, buses and fleet vehicles require high-throughput, quick refuelling—supported by established dispenser suppliers and rising investment in forecourt compressed natural gas infrastructure.

Time-fill depots is the fastest growing distribution models across Europe, enabling rapid deployment in areas without pipeline tie-ins and serving captive fleets and smaller towns while avoiding large CAPEX for pipeline extensions. The virtual-pipeline market is scaling as demand for flexible bulk compressed natural gas logistics increases.

• By End Use

On the basis of end-use, the market is segmented into transportation, residential, commercial, and industrial/power generation. The transportation segment dominated Europe’s compressed natural gas demand in 2023–2024—driven by public transit bus fleets, refuse collection vehicles, taxis and growing adoption in light commercial/logistics fleets—and remains the primary revenue source for station operators and conversion players.

The industrial/power-generation end-use is expected to experience the fastest growth through 2025–2032 as industries and small-scale generators pursue diesel-to-gas switching for cost savings and emissions targets, particularly where pipeline access or LNG is less practical.

Europe Compressed Natural Gas (CNG) Market Regional Analysis

• Germany dominated Europe’s compressed natural gas market, with revenues of USD 5.59 billion in 2024. The residential and commercial segment dominates revenue due to broad adoption of compressed natural gas for heating and light commercial uses, while ongoing efforts to decarbonize energy and transport continue to support the market.
• Germany sees opportunistic adoption in fleets and logistics hubs, but policy emphasis on electrification competes with compressed natural gas uptake; biomethane blending programs are being trailed to improve GHG benefits

U.K. Europe CNG Market Insight

The U.K. compressed natural gas is expected to witness the fastest growth rate of 9.12% in 2024, due to non-associated gas leads as the primary source, while refinery applications are the fastest growing segment, highlighting expanding industrial uses.

The Europe compressed natural gas industry is primarily led by well-established companies, including:

• Iveco (Italy)
• Fiat (Italy)
• BRC Gas Equipment (Italy)
• Worthington Cylinders (Europe/France)
• Prins AutoGassystems (Netherlands)
• AC S.p.A (Italy)
• Hexagon Purus (Sweden)
• Quantum (France)
• Faber Industrie (Italy)
• Gasum (Finland)
• Shell (Netherlands)

Latest Developments in Europe Compressed Natural Gas (CNG) Market

• In July 2025, the Circular Bio-based Europe Joint Undertaking (CBE JU) welcomed the new European Chemicals Industry Action Plan, which positioned bio-based solutions as a key pillar for achieving climate neutrality and industrial decarbonization. The plan underlined the role of renewable aromatics in reducing carbon intensity in chemical value chains. It also reinforced the EU’s policy alignment toward strengthening industrial competitiveness through circular, sustainable chemicals
• In June 2025, Relement unveiled its bio-based 3-methylphthalic anhydride (Bio-MPA) at the European Coatings Show in Germany. The launch showcased its application in sustainable resin formulations for coatings and composites. The product attracted strong market interest and led to a supply agreement with Worlée Chemie, marking a major step toward Relement’s industrial-scale rollout planned for 2026. This innovation highlights Europe’s leadership in developing renewable aromatic intermediates tailored for high-performance materials
• In April 2025, CBE JU launched a €172 million call for project proposals to accelerate the deployment of bio-based solutions across Europe. Covering 13 thematic areas, the program includes funding for drop-in renewable aromatics, sustainable packaging, biorefinery retrofitting, and safer alternatives for the textile industry. This initiative is expected to significantly boost R&D, scale-up, and commercialization of bio-based aromatics, while creating new industrial value chains
• In June 2025, thirty new flagship projects were announced under the CBE JU framework, with total funding of nearly €197 million. Among these projects, CERISEA aims to convert food waste into bio-based plastics and resins, while RUNFASTER4EU focuses on transforming marginal land resources into biomass feedstock. These initiatives reflect Europe’s growing investment in circular bio-based chemistry, aiming to strengthen local value chains and reduce dependence on fossil-based feedstocks

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