As the energy transition presses ever onwards, efforts are ramping up to recycle used fuel via recovery and reprocessing. Processes like carbon capture began this process, and from it a new alternative fuel has come to the forefront of emission reduction: electric natural gas (e-NG). We examine the process by which e-NG is created, the value of such a renewable fuel in the energy transition, current adoption efforts, and what future usage of this fuel could look like.
Also referred to as ‘e-methane’ and ‘electro-methane’, e-NG is a renewable fuel that is positioned as a more sustainable complement to conventional natural gas. The e-NG market has already seen expansion in Europe, Asia and North America, with the support of industry leaders and the formation of coalitions of major partners accelerating its adoption.
e-NG is produced by combining green hydrogen (hydrogen created using renewable energy) and CO2 that is captured from industrial emissions and Direct Air Capture programs (see Figure 1).
Figure 1: the e-methane/e-NG supply chain (source: Japan Gas)
Biogenic CO2, or CO2 created as trees and other biofuels grow and degrade, is also used to create e-NG. The use of recycled fuel sources in this manner means that the production of e-NG is carbon neutral and is even capable of recapturing CO2 from its own process to use in future production.
When these ingredients are subject to high pressures and temperatures of about 400°C in the presence of a nickel catalyst, and – via the Sabatier reaction – methane (CH4) and water are produced with a reported energy efficiency of up to 85%.1 It is chemically indistinguishable from conventional natural gas, positioning it as a useful drop-in fuel for companies and countries trying to decarbonize their oil and gas streams. e-NG can be moved through and utilized by existing systems built for conventional natural gas without major infrastructure overhaul.
The sustainable production of carbon neutral methane also has serious positive implications for stalling year-over-year increase in global temperature and in turn the increased frequency of droughts and other meteorological phenomena. According to the International Energy Agency (IEA), usage of methane accounts for nearly a third of the total increase in global temperatures since the Industrial Revolution (about 1.6°C, or 2.88°F), making methane a vital avenue to more sustainable energy usage efforts. With rising international demand for emission reduction, and global methane emission trends that seem to be holding at around 80 megatons of methane emitted annually, e-NG offers countries the opportunity to reduce their emissions without serious infrastructure costs in a way that may also have a long-term positive impact on the climate.2
In recent years, several large coalitions comprising major energy companies have come together with the express purpose of expanding the use of e-NG in the international market. At the same time, individual nations around the world are spearheading investments into the research and development of e-NG facilities, with initiatives in Japan, Germany, the United States, Canada and Finland among others already taking shape.3
- In Japan, e-NG is actively being incorporated into energy strategies countrywide with the goal of its city gas (methane delivered via pipes) becoming carbon neutral and for at least half of all operations currently fueled by traditional natural gas to be converted to e-NG and biogas by 2050.4 Japan has a sophisticated natural gas import and delivery infrastructure, meaning it is well positioned to incorporate more sustainably generated methane products.5
- In Germany, policy reform and funding are greatly encouraging the development of green hydrogen, a primary component of e-NG with the institution of a Special Climate and Transformation Fund. Offering financial support for energy transition programs and measures in the areas of renewable energies, electricity and grids, digitalization and energy infrastructure, the Fund is set to invest EUR211.8bn (US$247.7bn) between 2024 to 2027.6 As of 2024, Germany had 14 e-NG plants, and with this increase in the availability of funding in this area, this number is likely to grow.7
- In the United States, a project was recently announced to develop and build a production plant for e-NG on the Gulf Coast, with a view to boosting the global supply of e-NG by several hundred thousand tons annually. Natural gas is still the most widely used fuel source in Texas, with heavy use across building equipment, power plants and export facilities. With the addition of e-NG to this equation, peak demand could be more easily and sustainably met.8
- Canada has also begun its entrance into the production of e-NG, with the buildout of a plant that is aiming to be operational by 2027.9
- In Finland, a joint venture has begun to build a 500 MW production site that is expected to produce over 125,000 tons of e-NG annually, up from 60,000 tons of green hydrogen also produced at the site.10 This project is currently set to enter the pre-Front End Engineering Design (FEED) phase in 2026.
These projects will meet rising international demand for energy transition-related initiatives. While there is no major source of data on the market for e-NG itself, synthetic gas generally has been the subject of market research.
Per the International Energy Agency (IEA), most of the demand for synthetic gas and renewable hydrogen is coming from transportation. While e-NG is slowly gaining momentum as a supplementary fuel through the projects listed above, its adoption must be bolstered by policy change if its market presence is to increase.11 Further support for other renewable fuels would in turn encourage its adoption. Much remains to be seen as to what that future of renewable adoption will look like, particularly with the impending 2030 net zero emissions deadlines set out by several countries. After this close deadline passes, countries who have not met their net zero goal may turn to renewables as a viable option to improve their emissions and may indeed consider e-NG as an important supplement to this initiative.
Overall, e-NG is a promising carbon neutral alternative to liquid natural gas that could enhance fuel accessibility in countries with the necessary infrastructure for production, Sabatier processes, and import capabilities. As projects incorporating e-NG develop across the international market, energy providers should continue to monitor developments, particularly as deadlines for net zero initiatives draw closer.
At Capco, we are helping our clients prepare for the energy transition and gain insight into more sustainable sources of energy. By leveraging our deep industry expertise in renewables and strong focus on modernization and innovation, we are at the forefront of future-proofing in the energy sector.
1 https://tes-h2.com/blog/what-is-e-ng-and-how-will-it-be-crucial-to-achieving-net-zero
2 https://www.iea.org/reports/global-methane-tracker-2025/key-findings
4 https://www.gas.or.jp/en/vision/vision2050.pdf
5 https://oilgas-info.jogmec.go.jp/nglng_en/datahub/dh2025/1010408.html
7 https://www.europeanbiogas.eu/news/first-assessment-of-european-e-methane-roll-out-released-today/
9 https://www.atkinsrealis.com/en/media/press-releases/2024/25-03-2024
11 https://www.iea.org/reports/renewables-2024/executive-summary