Surging Demand for Low-Carbon Alternatives to Drive Bio LPG Market Beyond USD 10 Billion by 2031

The global bio LPG market, which was valued at US$ 416.9 million in 2022, is set for remarkable expansion over the coming years. Driven by a surge in demand for sustainable fuels and rising concerns regarding carbon emissions, the market is projected to advance at a CAGR of 42.3% from 2023 to 2031, reaching US$ 10.0 billion by the end of 2031.

Bio LPG, also known as biopropane, is emerging as a renewable and sustainable alternative to conventional Liquefied Petroleum Gas (LPG). Produced from renewable feedstocks such as waste biomass, agricultural residues, and plant oils, bio LPG supports the transition toward low-carbon and clean-burning energy solutions while leveraging existing LPG infrastructure.

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Analysts' Viewpoint

Surge in demand for sustainable fuels is expected to propel the bio LPG market during the forecast period. The increasing global focus on decarbonization across sectors such as petrochemicals, along with the need for sustainable off-grid heating solutions, offers lucrative opportunities for market players. Companies are investing heavily in R&D and forging strategic partnerships to expand their product portfolios and strengthen their market presence. As nations worldwide shift toward renewable energy sources, bio LPG is positioned to play a crucial role in reducing carbon emissions and achieving a cleaner energy future.

Bio LPG Market: Market Introduction

Bio LPG, or biopropane, is a renewable alternative to conventional LPG. It is produced from sustainable feedstocks including waste biomass, agricultural residues, and plant oils. Adoption of bio LPG helps lower greenhouse gas emissions and reduces the overall carbon footprint, making it a critical component of the global transition to clean energy.

Key applications of bio LPG span residential and industrial heating, cooking, transportation, and power generation. Its compatibility with current LPG infrastructure, combined with its environmental benefits, is driving the market toward a sustainable and low-carbon future. Emerging production techniques such as biopropane production, hydrogenation of biomass, and waste-to-LPG conversion are at the forefront of renewable LPG technologies.

Surge in Demand for Sustainable Fuels

Global industrialization, rapid urbanization, and increasing disposable incomes are accelerating investments in sustainable energy infrastructure. The environmental and health issues associated with traditional cooking fuels-such as kerosene, coal, and wood-are driving the shift toward cleaner alternatives like bio LPG.

Governments across the globe are offering subsidies and incentives to promote the adoption of renewable fuels. In regions like Europe and North America, a growing focus on sustainability is further propelling the market. With bio LPG offering up to an 80% reduction in carbon dioxide emissions compared to fossil fuels and 17% lower running costs than biomass boilers, its adoption is expected to increase significantly.

Rise in Concerns Regarding Carbon Emissions

Heightened environmental awareness and stringent carbon regulations are accelerating the global shift to cleaner fuels. Bio LPG emits significantly less carbon dioxide per unit than traditional fossil fuels, making it an ideal candidate for reducing the carbon footprint across various sectors.

Nearly three billion people in low- and middle-income countries still rely on solid fuels for cooking and heating, leading to severe household air pollution. Bio LPG, derived predominantly from sustainable feedstocks-with over 60% coming from waste and residues-provides a cleaner alternative, thereby playing a pivotal role in mitigating environmental and health challenges associated with high carbon emissions.

High Adoption of Bio Oil as Feedstock

Among the various feedstocks used for bio LPG production, bio oil is expected to dominate the market during the forecast period. Derived from cellulosic organic waste and municipal solid waste (MSW), bio oil accounts for 56.7% of the overall biomass feedstock utilized for biofuels. The fast pyrolysis process, which converts biomass into liquid bio oil, enables efficient transportation and processing, making it a valuable renewable resource in the bio LPG production chain.

Regional Outlook

According to the latest bio LPG market forecast, North America is poised to account for the largest market share from 2023 to 2031, with the U.S. serving as a key market hub. Expansion in the industrial sector and significant investments in large-scale biofuel plants are major drivers in the region.

Europe is also emerging as a critical market, with countries like Germany, France, and Denmark spearheading investments in bio oil projects and renewable energy initiatives. Meanwhile, Asia Pacific is experiencing increased investments in renewable power generation, with China, Japan, and India leading the adoption of bio LPG technologies.

Analysis of Key Players

The global bio LPG market is highly consolidated, with a few large-scale manufacturers commanding the majority of market share. Leading players are aggressively investing in R&D to innovate and expand their product portfolios while enhancing their supply chain and distribution networks.

Key companies in the market include:

SHV Energy
Eni
Global Bioenergies
Neste
Preem
Repsol
TotalEnergies
Alkcon Corporation
Irving Oil Ltd.
Calor Gas Ltd.
Alfa Laval

Key Developments:

June 2023: Flogas Britain completed the commissioning of the U.K.'s largest above-ground LPG storage terminal in Avonmouth, designed to be 'bio-ready' for storing bio LPG.

November 2022: SHV Energy partnered with U.S.-based GTI Energy to develop a large-scale process for producing renewable propane and butane from bioethanol.

February 2022: AmeriGas Propane, a GI Corporation subsidiary, joined forces with Global Clean Energy Holdings, Inc. to convert renewable feedstock into bio LPG at a Bakersfield biorefinery.

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Market Segmentation

By Feedstock

Bio Oil
Cellulosic Organic Waste
Municipal Solid Waste (MSW)
Others

By Application

Residential Heating
Industrial Heating
Cooking and Catering
Transportation
Power Generation
Others

By End-use

Residential
Commercial
Industrial

Regions Covered

North America
Latin America
Europe
Asia Pacific
Middle East & Africa

Countries Covered

U.S.
Canada
Germany
U.K.
France
Spain
Italy
Russia and CIS
Japan
China
India
ASEAN
Brazil
Mexico
GCC
South Africa

Companies Profiled

SHV Energy
Eni
Global Bioenergies
Neste
Preem
Repsol
TotalEnergies
Alkcon Corporation
Irving Oil Ltd.
Calor Gas Ltd.
Alfa Laval

Future Outlook

The bio LPG market is set to experience explosive growth as the global community intensifies its shift toward sustainable fuels and low-carbon energy solutions. Continued investments in R&D, supportive government policies, and strategic partnerships among key players will further drive the market expansion. With bio LPG offering significant reductions in carbon emissions and cost advantages over conventional fuels, the market is well positioned to support a greener, more sustainable energy landscape over the forecast period.

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