Butane market size is likely to exceed 265 million tons by 2022, with estimated gains at over 2.7%

Increasing LPG market demand owing to its adoption as domestic fuel, particularly in Africa and Asia Pacific, is anticipated to drive butane market size. Government across various regions is offering LPG at subsidized rates to promote it as domestic fuel. The government is promoting its use in order to reduce coal dependency and curb carbon footprints, with LPG CO2 emission being less by almost 33% as compared to coal combustion.

LPG finds wide applications across numerous sectors such as residential, commercial, and automobile and agriculture. It is becoming a popular energy source due to high replacement potential, considering its environmental benefits over other energy sources. The major advantage of LPG is low emission of CO2, which makes it an efficient alternative for conventional fossil fuels.

Indonesia government had launched paraffin-to-LPG conversion program to promote usage in the country, and distributed 3 kilo refillable LPG cylinder and a stove. South Africa, where awareness and marketing of the product is yet to be implemented, especially in rural areas are focusing on LPG promotion. Indian government initiatives such as the Rajiv Gandhi Gramin LPG Vitaran program support low cost distribution of LPG in the rural regions of the country. Launch of such regional government programs is likely to favour butane demand over the forecast period.

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Increasing autogas use owing to functional and cost benefits over oil based fuels such as gasoline or diesel is likely to drive demand. As of 2014, there are more than 25 million units of autogas vehicles in market and is widely used in countries such as turkey, South Korea, Poland, Italy and Russia.
Autogas has high energy content and burns easily compared to other energy sources or fuels, consumption has been rapidly increasing from the last few years, majorly due to its environmental benefits. Government of countries such as Algeria and Australia are promoting vehicle use to the local public.

Ground water contamination by MTBE leakage coupled with increasing ethanol demand as substitute for gasoline blending is likely to challenge future growth. Stringent regulations by the U.S. EPA for additives & fuels have led to MTBE ban in gasoline blending. However, MTBE use for gasoline blending is still continued in Middle East and Asia Pacific owing to lenient government norms.

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LPG butane market size was the largest and was valued at more than USD 120 billion in 2014. Increasing heating fuel demand in cold regions globally coupled with cooking fuel applications in Asia Pacific is likely to drive butane demand for LPG manufacturing. Also, many European and Asian countries have been adopting LPG as a transportation fuel.

Petrochemical application occupied more than 16% of the total demand and is likely to grow at highest rates up to 2022. Petrochemical industry growth in the Middle East is likely to drive demand over the forecast period. Ethylene capacity growth in the Middle East is one of the major factors prompting growth butane demand.

It is one of the raw materials which are listed in the feedstock slate of various petrochemical complexes across the globe for manufacturing ethylene. Middle East is also one of those regions which use some amount of butane for manufacturing ethylene and butadiene.

Global butane market share is fragmented and witness oligopolistic characteristics. Top four companies contribute less than 40% of the total demand with Exxon Mobil emerging as industry leader. Major manufacturers include ConocoPhillips, British Petroleum, Chevron Corp, Royal Dutch Shell and SINOPEC. Other prominent industries include Total S.A., CNPC, Perenco, Devron Energy, Air Liquide and Praxair.

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