Coal Bed Methane Market Size, Share & Industry Analysis, By Technology (Hydraulic Fracturing, Horizontal Drilling, and CO2 Sequestration), By End-User (Residential, Commercial, Industrial, Power Generation, and Transportation), and Regional Forecast, 2024-2032

The global coal bed methane market size was valued at USD 12.91 billion in 2023. It is projected to grow from USD 13.41 billion in 2024 and is projected to reach USD 19.75 billion by 2032, exhibiting a CAGR of 4.95% during the forecast period.

Coal Bed Methane (CBM), considered a clean energy source, is a type of unconventional natural gas found in coal deposits or coal seams. It is mainly extracted through hydraulic and horizontal drilling techniques by drilling wells into coal seams, which are usually filled with groundwater under high pressure. CBM is formed when plant material turns into coal, either through microbiological or thermal processes. It is considered a clean-burning fuel used in homes and industries, and extracting it can help reduce the risk of explosions in coal mines. The market is projected to grow in the forecast period due to the rising focus toward clean energy and government initiatives to achieve carbon neutrality in the coming years.

MARKET DYNAMICS

Market Drivers

Rising Efforts for Lowering Carbon Emission to Lead Market Growth

The emission of carbon has been increasing significantly owing to the rise in consumption of fossil fuels driven by the surge in population, urbanization, and industrialization. According to the International Energy Agency (IEA), global energy-related CO2 emissions rose by 1.1% in 2023, increasing by 410 million tons from 2022, reaching a record high of 37.4 billion tons. This follows a 1.3% increase of 490 million tons in 2022. Thus, governments across the globe and many international bodies have focused on curbing carbon emissions to mitigate climate change.

Extracting coal bed methane from coal deposits has been proposed as a solution for limiting harmful emissions. The Paris Agreement set an ambitious target of keeping the global temperature “well below 2 degrees, preferably 1.5 degrees Celsius” compared to pre-industrial levels. Achieving the 1.5°C goal requires global emissions to decline by 45% from 2010 levels by 2030 and to reach net zero by 2050. Countries have committed to reducing emissions through Nationally Determined Contributions (NDCs) to reduce emissions, with over 140 nations also setting net-zero targets. CBM, which is primarily composed of methane, burns more cleanly than coal or oil and produces less carbon dioxide (CO2) per unit of energy. Hence, utilizing CBM for power generation or industrial applications can help reduce overall greenhouse gas emissions compared to coal-based energy.

Market Restraints

Low Extraction Efficiency of Methane to Limit Market Growth

In many coal seams, mainly those with low permeability, extracting a substantial volume of methane can be challenging, leading to the underutilization of potential energy resources. This inefficiency results in valuable energy being lost, ultimately leading to reduced economic viability of CBM projects and undermining their potential as a reliable alternative to conventional natural gas. Additionally, low extraction rates necessitate the drilling and maintenance of more wells to capture adequate methane, which drives up operational costs. The increased investment in infrastructure and technology needed to improve extraction efficiency can make CBM less competitive compared to other energy sources, further hindering the development of the CBM market.

Market Opportunities

Methane Capture Technologies and Carbon Reduction Policies Create Growth Opportunities

Methane, a harmful greenhouse gas released during coal extraction, has a greenhouse effect 22 times greater than carbon dioxide. Thus, extracting methane from coal seams through hydraulic or horizontal drilling techniques prevents methane from being vented during mining activities, which contributes significantly to climate change. In addition, the captured methane, which presents similar characteristics to natural gas, is usable in the form of energy. When burned, it emits very little carbon compared to other fossil fuels. Its relatively lower carbon emissions make it an attractive option for reducing dependence on coal while meeting energy demands with cleaner alternatives. Additionally, the implementation of stringent carbon reduction policies, including carbon pricing, emissions trading systems, and government incentives for clean energy development in the U.S., India, and other countries will boost the global coal bed methane market growth in the forecast period.

Market Challenges

Environmental Concerns in the Extraction of Coal Bed Methane to Limit Market Expansion

CBM offers a cleaner alternative to coal and other fossil fuels due to its low carbon emission in the atmosphere. However, its extraction presents several challenges such as methane emissions and water management issues.  Methane, when released into the atmosphere during CBM extraction, is a potent greenhouse gas with a significant global warming effect, contributing to climate change and other safety issues. The extraction process poses safety risks, including the potential for methane explosions and other hazards associated with underground mining. Another critical concern is water management involved during the extraction of coal bed methane. CBM extraction requires the removal of groundwater from coal seams to facilitate gas flow. This process can lead to various water management issues, including the risk of contaminating local water sources. Hence, the environmental concerns associated with coal bed methane production, are key factors limiting market growth.

COAL BED METHANE MARKET TRENDS

Development of Hydraulic Cavitating Assisted Fracturing (HCAF) Technology

Hydraulic Cavitating Assisted Fracturing (HCAF) technology offers a promising solution for improving Coal Bed Methane (CBM) extraction, especially in low-permeability coal seams. The high-enhancing permeability of HCAF lowers the fracture-initiation pressure to below 15 MPa. It expands the effective radius from 8 meters to 12 meters, thereby facilitating more efficient gas flow and extraction. This expansion boosts extraction rates, increasing the maximum gas flow rate from 0.56 m³/min to 0.81 m³/min, while addressing environmental and safety concerns. Enhanced permeability reduces methane emissions, mitigating environmental pollution, and lowers the risk of methane accumulation and explosions in underground mines.

Additionally, HCAF controls fracture development, optimizing the extraction process and minimizing coal damage. Field tests have confirmed that HCAF technology is more efficient than traditional hydraulic fracturing, demonstrating its reliability and effectiveness in improving methane recovery and reducing emissions. Thus, the utilization of HCAF techniques in the extraction of coal bed methane is expected to play a key role in the development of global coal bed methane during the forecast period.

IMPACT OF COVID-19

The global impact of the COVID-19 pandemic on the market is significant due to the reduction in industrial activity and lockdowns, which led to a decline in energy demand, including natural gas. In addition, restrictions on public movement, workforce shortages, and supply chain disruptions caused delays in drilling and production activities, Many CBM projects were either postponed or slowed down, leading to a decline in global coal bed methane market growth.

SEGMENTATION ANALYSIS

By Technology

Hydraulic Fracturing Technology Leads Owing to its Capability of Increasing Permeability

By technology, the market is segmented into hydraulic fracturing, horizontal drilling, and CO2 sequestration. Hydraulic fracturing holds the dominant market share due to its capability of significantly increasing permeability in coal seams, thereby enhancing the flow of methane. The rising demand for unconventional gas sources and ongoing technological advancements that make hydraulic fracturing more cost-effective, are key drivers of the segment expansion.

CO2 sequestration is growing at the fastest rate in the market as it involves injecting CO2 into coal seams to displace methane, enhancing methane recovery while simultaneously storing CO2. This method contributes to methane production and aligns with environmental objectives by reducing greenhouse gases. In addition, its adoption is expected to increase as global Carbon Capture, Utilization, and Storage (CCUS) initiatives are gaining momentum worldwide.

By End-User

Industrial Segment Dominates the Market owing to Technological Advancements

By end-user, the market is divided into residential, commercial, industrial, power generation, and transportation. The industrial segment holds the largest coal bed methane market share owing to its utilization as a fuel for various industrial processes and as a feedstock for chemical production. The surge of CBM usage in industrial applications is supported by increased industrial activity, higher energy demand, a preference for cleaner and more efficient fuel sources, and technological advancements that enhance CBM efficiency in industrial processes.

Transportation is projected to grow at the fastest rate in the forecast period owing to the rising demand for CNG in various vehicles, such as buses and trucks. This shift is driven by the superior fuel efficiency and lower emissions of CNG compared to gasoline and diesel and the expansion of infrastructure for CNG refueling stations. Additionally, government incentives and policies promoting alternative fuels aim to reduce carbon emissions.

COAL BED METHANE REGIONAL OUTLOOK

The market has been studied geographically across five main regions: North America, Europe, Asia Pacific, and the rest of the world.

North America

North America dominated the global coal bed methane market owing to the high Coal Bed Methane (CBM) production and significant reserves in the U.S. and Canada. The U.S. has substantial CBM production in Wyoming, Colorado, and West Virginia, while Canada’s CBM activities are concentrated in Alberta and British Columbia. Rising investments in extraction technology, infrastructure, and government policies promoting natural gas as a cleaner energy alternative are expected to drive growth in North America.

U.S.

The U.S. government is taking significant initiatives for curbing carbon emissions and promoting coal bed methane as a key solution. Numerous stringent measures have been implemented to control the carbon and methane emissions from coal mines. For instance, The Coalbed Methane Outreach Program (CMOP), a partnership between the US Environmental Protection Agency EPA and the coal mining industry, focuses on encouraging coal mine methane recovery. It maintains a database identifying top abandoned mines for methane recovery projects based on surveys and emissions data. Thus, the U.S. is anticipated to remain a leading country in the global coal bed methane market in the coming years.

Europe

Europe is witnessing steady rise in the market owing to the limited Coal Bed Methane (CBM) production in Poland, Germany, and Russia. Rising support from European Nations for addressing carbon & methane emissions from coal mining, coupled with technological advancement in drilling techniques, is estimated to boost market growth in the region. According to the United Nations Framework Convention on Climate Change (UNFCCC) 2021 report, the energy sector in the EU emitted 2,497 thousand tons of methane, making it the third largest emitter after agriculture and waste. Of this, coal mining accounted for 908 thousand tons, contributing 6% of the EU’s total methane emissions.

Asia Pacific

Asia Pacific is projected to experience the fastest growth in the market due to the significant production and reserves present in China, Australia, Indonesia, and India. The rising demand for natural gas, mainly in the industrial sector owing to its low carbon emissions, is contributing to market expansion. In addition, there has been a significant inclination toward CNG-based vehicles, replacing gasoline and diesel-powered automobiles, further augmenting the demand for coal bed methane. Governments in India and Australia are focusing on boosting the production of coal bed methane for a clean and sustainable environment. In India, CBM is expected to support the country’s gas-based economy by increasing the share of gas in the energy mix from 5.6% to 15% by 2030.

Rest of the World

The rest of the world, including regions such as Africa, South America, and the Middle East, displays sluggish upsurge in the market and holds a relatively low share compared to other regions. The coal bed methane market is still emerging as the coal bed reserves are very limited in this region. However, government initiatives for lowering the carbon and methane emissions during coal mining would play a key role in augmenting the market expansion in the forecast period. For instance, the endorsement of the Zero Routine Flaring by 2030 initiative by Mexico and its participation in the Global Methane Initiative and the Climate and Clean Air Coalition highlights the government's commitment to limiting methane emissions in the atmosphere. Additionally, in its updated Nationally Determined Contribution (NDC) submitted in November 2022, Mexico committed to a 35% reduction in greenhouse gas emissions and a 51% reduction in black carbon by 2030 compared to a business-as-usual scenario, up from the previous 22% GHG reduction target.

COMPETITIVE LANDSCAPE

Key Industry Players

Oil & Gas Companies Focus on Discovering Additional Gas Reserves to Gain Market Share

The global market is mostly fragmented, with key players operating in the industry. Companies such as Halliburton, PETRONAS, Arrow Energy, Essar, and others are leading this industry. These companies have been continuously engaged in drilling and producing coal bed methane to provide a sustainable solution.

Essar Oil and Gas Exploration and Production Limited (EOGEPL) is India’s largest Coal Bed Methane (CBM) producer, contributing 65% of the nation's CBM output. With 12 trillion cubic feet of reserves and producing one million cubic meters of gas per day, the company is pivotal in India’s transition to a gas-based economy. As of 2023, EOGEPL invested USD 600 million in the Raniganj block of India and plans an additional USD 240 million over the next 18-24 months to expand production. Its focus on innovation, partnerships, and operational efficiency aims to boost India’s gas share in the energy mix from 6.7% to 15%.

List of Coal Bed Methane Companies Profiled:

• Halliburton (U.S.)


• Arrow Energy Pty Ltd. (Australia)


• Baker Hughes (U.S)


• Petroliam Nasional Berhad (PETRONAS) (Malaysia)


• PetroChina Company Limited (China)


• Essar (India)


• Reliance Industries Limited (India)


• G3 Exploration (Hong Kong)


• GEECL (India)


• bp p.l.c. (U.K.)


• Gazprom (Russia)


• Pioneer Natural Resources Company (U.S.)


• ConocoPhillips Company (U.S.)

KEY INDUSTRY DEVELOPMENTS:

• August 2024: Essar announced plans to invest USD 357 million over the next five years to increase Coal Bed Methane (CBM) production at its Raniganj field in West Bengal, India. The aim is to raise its share of India's gas output from 1% to 5%. The Raniganj field contains an estimated 4 trillion cubic feet (tcf) of gas, of which only 0.92 tcf has been extracted so far. Essar intends to boost daily production from 0.93 million to 4-5 million standard cubic meters by drilling new wells.


• August 2024: Shell and PetroChina, through their joint venture with Arrow Energy, approved Phase 2 of the Surat Gas Project in Queensland, Australia. Over the next 27 years, 2,500 new gas wells will be drilled to supply the Queensland Curtis LNG plant. Phase 2, expected to start production in 2026, will produce up to 22,400 barrels of oil equivalent per day (130 million standard cubic feet of gas per day) to meet both domestic demand and long-term contracts.


• June 2024: Globaltec Formation Bhd's subsidiary, NuEnergy Gas Ltd, plans to sell coal bed methane (CBM) to Indonesia's natural gas company, PT Perusahaan Gas Negara (PGN). NuEnergy’s subsidiary, Dart Energy (Tanjung Enim), signed a heads of agreement (HoA) with PGN, outlining the terms for a future Gas Sale and Purchase Agreement (GSPA). The agreement would cover the supply of CBM from Dart TE’s development project in South Sumatra, Indonesia.


• October 2023: NuEnergy, through its subsidiary Dart Energy, received an environmental permit for the Tanjung Enim Plan of Development 1, Indonesia's first Coal Bed Methane (CBM) project. With this permit, NuEnergy is preparing for early gas production. The initial phase would sell 1 million standard cubic feet per day (mmscfd) of CBM to PT Laras Ngarso Gede, with plans to increase production to 25 mmscfd as approved under the development plan.


• January 2023: Australian engineering company Verbrec was awarded a front-end engineering study for Comet Ridge's Mahalo North gas development. The study, jointly funded by Denison, would design and plan upgrades to Denison's infrastructure to handle 10 terajoules of coalbed methane per day from Mahalo North, boosting gas supply to Australia's east coast.

REPORT COVERAGE

The global market research report provides a detailed insight into the market and focuses on key aspects such as leading companies and their operations in drilling and producing coal bed methane. Besides, the report offers insights into the market trends and technology, highlighting key industry developments. In addition to the factors above, the report encompasses several factors and challenges that contributed to the growth of the market in recent years.

Report Scope and segmentation