by Propane gas is increasingly being used as an automotive fuel in light-duty vehicles, forklifts, buses, and other fleet applications. It is viewed as a viable alternative to gasoline and diesel fuel, with its clean-burning characteristics and domestic supply sourcing. Propane vehicles produce fewer emissions than their gasoline or diesel counterparts. With increasing concerns about air pollution in urban areas and implementation of stricter emission regulations, demand for propane from the transportation sector is expected to surge. Propane is well-suited for medium- and heavy-duty fleet vehicles engaged in local or regional operations that return to a central refueling depot each day. It is widely used in forklifts, construction equipment, municipal buses, delivery trucks, and other vocational vehicles.
The global propane market is estimated to be valued at US$ 98.5 Bn in 2023 and is expected to exhibit a CAGR of 14% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
Two key drivers contributing to the growth of the propane market are growing demand from the transportation sector and increasing usage of propane BBQ grills and outdoor equipment. The growing demand for propane from the transportation sector is expected to strongly support market growth over the forecast period. With rising concerns regarding emission from vehicles and focus on the adoption of clean fuel, many fleet operators are switching to propane vehicles. As mentioned earlier, propane produces lesser emissions making it an attractive alternative fuel for vehicles. Furthermore, propane grills and outdoor equipment are gaining widespread popularity for cooking and recreational activities. The ease of use, clean burning, and low maintenance of propane grills compared to charcoal or electric grills has fueled their demand over the years. Many restaurants and food chains also prefer propane grills for their consistent performance. The growing popularity of outdoor activities such as camping will further generate demand for small propane canisters for portable cooking equipment.
Segment Analysis
The propane market is dominated by the residential and commercial sub segment which collectively accounts for over 60% share. Residential users predominantly rely on propane to fuel heating equipment like furnaces, fireplaces, stoves for cooking. The dominance of this sub segment can be attributed to rising demand for affordable energy solutions for heating and cooking purposes across residential establishments.
PEST Analysis
Political: The propane market is highly regulated across markets. Regulations pertaining to safety and emissions from usage frequently impact production and trade dynamics.
Economic: Propane demand is directly correlated with economic growth trends across industries. Higher industrial activity boosts consumption from sectors like agriculture, manufacturing etc. Volatility in crude oil prices also impacts propane costs.
Social: Increased awareness about clean energy solutions and fuels is prompting higher adoption of propane barbecue equipment and generators for outdoor recreational activities. This is especially prominent across developed regions.
Technological: Technologies facilitating remote monitoring of propane tank levels and automatic delivery based on consumption patterns are gaining traction. This enhances convenience and optimizes supply chain management for commercial customers.
Key Takeaways
The Global Propane Market Growth is expected to witness high over the forecast period of 2023 to 2030 supported by a CAGR of 14%.
Regional analysis: North America dominates currently with a share of over 35% led by widespread usage in residential sector for heating needs. The Asia Pacific region is expected to emerge as the fastest growing market owing to rising LPG consumption in countries like India, China for cooking and transportation.
Key players operating in the propane market are Chevron Corporation (U.S.), Royal Dutch Shell Plc (U.K.), Exxon Mobil Corporation (U.S.), ConocoPhillips (U.S), Reliance Industries Ltd. (India). Key players are focusing on capacity expansion projects and strategic initiatives to strengthen supply chain and distribution infrastructure in high growth markets. The market is witnessing increasing collaborations between global players and regional/ domestic players to tap into new opportunities. The size of the propane market was estimated at US$ 98.5 Bn for the year 2023 and is projected to rise to US$ 140 Bn by 2030.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
About Author - Ravina Pandya
Ravina Pandya, Content Writer, has a strong foothold in the market research industry. She specializes in writing well-researched articles from different industries, including food and beverages, information and technology, healthcare, chemical and materials, etc. With an MBA in E-commerce, she has an expertise in SEO-optimized content that resonates with industry professionals. LinkedIn Profile
