Gas Engines Market Report 2025

The gas engines market size has grown strongly in recent years. It will grow from $5.19 billion in 2024 to $5.46 billion in 2025 at a compound annual growth rate (CAGR) of 5.1%. The growth in the historic period can be attributed to growing energy demand, natural gas abundance, environmental regulations, decentralized energy generation, industrial applications, flexibility and fast start-up.

The gas engines market size is expected to see strong growth in the next few years. It will grow to $6.8 billion in 2029 at a compound annual growth rate (CAGR) of 5.6%. The growth in the forecast period can be attributed to transition to renewable energy, increased focus on distributed generation, economic viability, rural electrification, cogeneration in commercial buildings, retrofitting existing infrastructure. Major trends in the forecast period include digitalization and smart controls, emissions reduction technologies, LNG-powered engines, energy storage integration, hydrogen-powered gas engines.

The increasing use of natural gas for power generation is anticipated to drive the growth of the gas engine market in the future. Power generation refers to electricity produced from various sources, including fossil fuels, nuclear power plants, and hydropower, which encompass both combined heat and power and electricity-only facilities. The modularity and high cost-effectiveness of gas engines offer an ideal solution for consistent power demands. Consequently, the rising utilization of natural gas for power generation boosts the demand for the gas engine market. For example, in December 2023, data released by the International Energy Agency, a France-based energy authority, indicated that natural gas met over half of U.S. electricity demand for the first time on August 28, 2023, with its share of the summer power mix increasing from 40% to 45% over the previous two years. Thus, the growing use of natural gas for power generation is driving the gas engine market.

The escalating demand for electricity is poised to be a significant factor propelling the growth of the gas engines market. Gas engines, with features such as modularity, combined heat and power applications, fast response capabilities, and adaptability to various fuel sources, are well-suited to address the challenges posed by the rising demand for electricity. Their role in decentralized power generation and alignment with environmental considerations contribute to the expanding use of gas engines for efficient and sustainable electricity production. As indicated by the Energy Information Administration in April 2023, the total end-use consumption of electricity in the United States increased by approximately 2.6% in 2022 compared to the previous year, with notable growth in retail electricity sales to the residential and commercial sectors. Thus, the increasing demand for electricity is a driving force for the gas engine market.

Technological advancement stands out as a key trend gaining traction in the gas engine market. Major players in the market are directing their efforts toward adopting new technologies to enhance the performance of gas engines, aligning with modern energy and power needs. A case in point is the November 2022 launch by The Weichai Group, a China-based manufacturer, of a commercial natural gas engine, the world's first with a brake thermal efficiency (BTE) of 54.16% based on Westport high-pressure direct injection (HPDI) technology. This innovative natural gas engine incorporates technical upgrades, employing low friction and high thermal efficiency technology utilized in diesel engines.

Major companies in the gas engine market are developing new high-efficiency natural gas engine cogeneration systems. These systems, also known as combined heat and power (CHP) systems, simultaneously generate electricity and useful heat from a single energy source, typically an internal combustion engine. Mitsubishi Heavy Industries Engine & Turbocharger, Ltd., for instance, launched the SGP M2000 in March 2023, a natural gas engine cogeneration system boasting a generation output of 2,000kW. With a 16-cylinder natural gas-fired engine, the G16NB, the system achieves an electrical efficiency of 44.3%, marking a significant improvement compared to existing 1,000kW gas engine cogeneration systems. This compact and energy-efficient solution contributes to carbon neutrality efforts by maximizing efficiency and minimizing environmental impact, particularly in distributed energy resources (DER) applications.

In August 2024, DEUTZ AG, a Germany-based company specializing in engine industrial machinery and equipment, acquired Blue Star Power Systems, Inc. for an undisclosed amount. This acquisition aims to transform DEUTZ from a component manufacturer into a comprehensive solutions provider for decentralized electricity generation. It allows the company to enter the rapidly expanding genset market in the USA, with anticipated additional annual revenues exceeding US$ 100 million. The acquisition also facilitates the strategic expansion of DEUTZ's energy-related business models while enhancing its portfolio of sustainable products in response to the growing global electricity demands and the increasing importance of renewable energy sources. Blue Star Power Systems, Inc. is a US-based provider of power generation systems, including diesel and gaseous-driven generators.

Major companies operating in the gas engines market include Caterpillar Inc., Cummins Inc., Wartsila Oyj Abp, Mitsubishi Heavy Industries Ltd., Hyundai Heavy Industries Co. Ltd., Maschinenfabrik Augsburg-Nürnberg AG, General Electric Company, Kawasaki Heavy Industries Ltd., Liebherr-International AG, Kohler Co., Yanmar Co. Ltd., Perkins Engines Company Limited, Doosan Group, INNIO Jenbacher GmbH & Co. OG, Deutz AG, Guascor Power, Dresser-Rand, Motoren- und Turbinen-Union Friedrichshafen GmbH, Fairbanks Morse LLC, Jinan Lvneng Power Machinery Equipment Co. Ltd., Ningbo C.S.I. Power & Machinery Group Co. Ltd., Baudouin, CNPC Jichai Power Complex, Googol Engine Tech Co. Ltd., Liquid Combustion Technology LLC, Lombardini Srl, Chongqing Winyou Power Co Ltd., Briggs & Stratton Corporation, Honda Motor Co Ltd., Yamaha Motor Corporation, KUBOTA Corporation, Generac Power Systems Inc.

North America was the largest region in the gas engines market in 2024. The regions covered in the gas engines market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the gas engines market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

A gas engine is an internal combustion engine designed to combust gaseous fuels such as natural gas and blast furnace gas to generate gas. These engines find applications in renewable energy production and grid balancing.

Gas engines primarily utilize natural gas, special gas, and other fuel types. Natural gas engines, specifically, are internal combustion engines ignited by sparks and fueled by natural gas, commonly employed in vehicles. They come in different power output categories, including 1-2 MW, 2-5 MW, 5-15 MW, and above 15 MW. These engines are utilized in diverse applications such as power generation, mechanical drive, cogeneration, and other fields, catering to end users such as utilities, marine, oil and gas, manufacturing, and other sectors.

The gas engine market research report is one of a series of new reports that provides gas engine market statistics, including gas engine industry global market size, regional shares, competitors with a gas engine market share, detailed gas engine market segments, market trends, and opportunities, and any further data you may need to thrive in the gas engine industry. This gas engine market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The gas engine market consists of sales of stoichiometric Otto cycle engines, biogas engines, and shale gas engines. Values in this market are ‘factory gate’ values, that is the value of goods sold by the manufacturers or creators of the goods, whether to other entities (including downstream manufacturers, wholesalers, distributors, and retailers) or directly to end customers. The value of goods in this market includes related services sold by the creators of the goods.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD, unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.

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