by Propane, also known as liquefied petroleum gas (LPG), is a liquefied hydrocarbon gas used as a fuel for various applications. It is primarily used in portable cooking and heating equipment, motor fuel, grain drying, tobacco curing, and industrial processes such as metalworking. With rising environmental concerns, propane has been gaining increasing traction as an alternate fuel for transportation. It is used as an alternative fuel in fleets and transit buses, as well as forklifts, taxis, and other commercial vehicles. The growing adoption of propane-powered vehicles is expected to drive the global propane market.
The global propane market is estimated to be valued at US$ 98.5 Bn in 2023 and is expected to exhibit a CAGR of 4.5% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The growing adoption of propane in the transportation industry is one of the major drivers of the global propane market. Propane produces fewer emissions compared to gasoline and diesel. It is an affordable and readily available alternative fuel that can help reduce dependency on petroleum and lower greenhouse gas emissions from the transportation sector. According to the Propane Education & Research Council, propane autogas vehicles generate up to 21% lower carbon dioxide emissions than an equivalent gasoline vehicle. The ability of propane to significantly reduce emissions is encouraging more fleet operators and commercial transport companies to replace gasoline and diesel with propane. Additionally, growing environmental awareness among consumers is also augmenting the demand for propane vehicles.
Segment Analysis
The propane market can be segmented based on end-use into residential, commercial, industrial, transportation, and others. The residential segment accounts for more than 35% of the total propane market share. Rising number of home units using propane for heating and other purposes has increased the demand from the residential segment. The industrial segment is the second largest consumer of propane mainly for flame weeding, metal cutting, healthcare, mining and other industries.
PEST Analysis
Political: Governments across various countries are supporting the usage of propane as a clean energy resource through subsidies and policy reforms. This is expected to boost the demand.
Economic: Rising disposable incomes and spening on domestic and commercial needs have increased the consumption of propane for heating, cooking and other applications. The demand from developing economies is projected to grow at a higher pace.
Social: Increasing environmental concerns and need for switch towards cleaner energy solutions is favoring the usage of propane over other fossil fuels. The convenience of propane cylinders for outdoor activities is also augmenting its adoption.
Technological: Technologies for efficient delivery, storage and end-use of propane through cylinders, pipeline networks and vehicles are enabling new applications and greater outreach. This along with innovative product offerings will expand the potential demand base.
Key Takeaways
The Global Propane Market Demand is expected to witness high growth supported by rising residential and industrial consumption for energy needs.
Regionally, the Asia Pacific region accounts for over 35% of the total propane market share led by China, India and other Southeast Asian countries. The demand is growing at fastest pace in the region led by increasing LPG usage, infrastructure growth and industrialization.
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). Chevron Corporation and Royal Dutch Shell Plc have the largest market share in the global propane business owing to their vast operating networks and integration along the value chain.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
