Europe has become the world's largest market smart gas meters, surpassing North America, according to a new report.

New EU energy efficiency regulations and an ongoing rollout of smart electricity meters in France, Italy, the UK and the Netherlands helped drive up demand in the European market.

The report, compiled by Frost & Sullivan, also claimed that the Asia-Pacific market, excluding China, will also overtake North America by 2018.

A smart meter is a gas and electricity meter that can digitally send meter readings to energy suppliers. This can ensure more accurate energy bills.

"The passing of favourable legislation such as the Third Energy Package of the European Union provided substantial impetus to the growth of advanced metering solutions," said Maximilian-Eckart Wernicke, energy and environment consultant at Frost & Sullivan.

"Without nationwide mandates, gas utilities would have overlooked the residential segment and offered smart gas meters only to industrial and commercial customers with annual consumption of more than 1,500,000 kWh."