South & Central America Gas Engine Market Size and Forecast (2021 - 2031), Regional Share, Trend, and Growth Opportunity Analysis Report Coverage: By Fuel Type (Natural Gas and Special Gas), Power Output (100-300 kW, 300-500 kW, 0.5-1 MW, 1-2 MW, 2-5 MW,

The gas engine market in South and Central America is projected to grow significantly, with an expected market size of approximately US$ 297.12 million by 2031, up from US$ 223.24 million in 2024. This growth translates to a compound annual growth rate (CAGR) of 4.3% from 2025 to 2031.

Executive Summary and Market Analysis

The South and Central America gas engine market is primarily segmented into three regions: Brazil, Argentina, and the Rest of South and Central America. The region has experienced substantial industrialization, which has played a crucial role in its economic development. Key sectors such as manufacturing, oil and gas, transportation, and power generation are driving demand for gas engines. Additionally, the increasing emphasis on emission standards by governments is creating opportunities for the market, particularly for natural gas-fueled engines.

Brazil is at the forefront of this transition, aiming for zero-emission goals, while countries like Argentina and Chile are still in the early stages of implementing stringent regulations to control pollution from diesel and petrol engines. The gas engine market is poised for growth, especially given the limited renewable energy generation in the region and the rising demand for electricity due to population growth. According to the US Energy Information Administration, Argentina's crude oil and natural gas production is nearing record levels, largely due to the Vaca Muerta shale formation. From January 2021 to September 2024, Argentina's crude oil production surged by 50%, and natural gas production increased by 27%, nearing the highs seen in the early 2000s.

Strategic Insights

Market Segmentation Analysis

The gas engine market can be analyzed through various segments, including fuel type, power output, and end user.

By Fuel Type: The market is divided into natural gas and special gas, with natural gas holding a larger market share in 2024.
By Power Output: The segments include 100-300 kW, 300-500 kW, 0.5-1 MW, 1-2 MW, 2-5 MW, 5-10 MW, and 10-15 MW. The 5-10 MW segment is expected to dominate the market in 2024.
By End User: This includes remote, mid-stream oil and gas, heavy industries, light manufacturing, utilities, biogas, data centers, and commercial sectors, with heavy industries leading the market share in 2024.

Market Outlook

Governments in South and Central America are increasingly supporting the shift towards cleaner energy sources as part of their environmental sustainability initiatives. This aligns with the global movement towards decarbonization and reducing greenhouse gas emissions. Various incentives, subsidies, and tax breaks are being offered to encourage the adoption of cleaner and more energy-efficient technologies. Gas engines, recognized as a cleaner alternative to coal and oil, are well-positioned to benefit from these supportive policies.

In South America, governments have ramped up grants and subsidies to promote renewable energy. For instance, Brazil's PROINFA program provides feed-in tariffs for wind, solar, and small hydroelectric power, supported by financing from the BNDES. Argentina's RenovAr program employs competitive auctions and power purchase agreements to stabilize the market for developers. Chile promotes solar and wind energy through stable feed-in tariffs and government grants for distributed solar installations. Colombia offers tax incentives and accelerated depreciation for renewable equipment, encouraging private sector involvement. These financial incentives, along with regional cooperation and international funding, are driving the expansion of clean energy in South America.

Country Insights

The gas engine market in South and Central America is primarily driven by Brazil, Argentina, and other countries in the region. Brazil is leading the market due to its increasing demand for clean energy-sourced gas engines. The Brazilian government is actively working to reduce engine emissions and promote the use of gas engines in utilities and industrial sectors, resulting in a high adoption rate. A new emission standard for diesel engines has further supported the gas engine market, as these engines meet regulatory standards while offering improved performance and efficiency.

In 2024, Brazil set an ambitious target to reduce emissions by 59-67% by 2035 compared to 2005 levels, which translates to a reduction of 850 million to 1.05 billion tons of carbon dioxide equivalent. As Brazil pursues these environmental goals, the demand for cleaner and more efficient energy solutions is expected to rise, driving the growth of the gas engine market as industries seek sustainable technologies to meet emissions reduction targets and energy needs.

Company Profiles

Key players in the South and Central America gas engine market include Rolls-Royce Holdings Plc, Ningbo C.S.I. Power & Machinery Group Co., Ltd, Guascor Energy S.A.U, IHI Corp, MAN Energy Solutions SE, 2G ENERGY AG, Wartsila Corp, R Schmitt Enertec GmbH, Mitsubishi Heavy Industries Ltd, Liebherr, Kawasaki Heavy Industries Ltd, Fairbanks Morse, LLC, Cummins Inc, Caterpillar Inc, and INNIO Jenbacher GmbH & Co. These companies are employing various strategies such as expansion, product innovation, and mergers and acquisitions to enhance their market presence and offer innovative products to consumers. Show more