Bio LPG Market Size, Share, Opportunities, COVID-19 Impact, And Trends By Feedstock (Residual/Waste, Sugar, Oil), By End User (Residential, Commercial), And By Geography - Forecasts From 2022 To 2027

Published:  Jun 2022 Report Code: KSI061613999 Pages: 117

The Bio LPG market was evaluated at around US$229.629 million during the year 2020 and is expected to grow at a CAGR of 42.21% to reach a market value of US$2,701.420 million by 2027.

Bio LPG refers to the bio propane produced from plant and vegetable residuals. It is a derived product from biomass using similar techniques such as hydrotreating, dehydrogenation, and fermentation. The only difference between liquified petroleum gas and bio-LPG is that the source is different, though, in terms of chemical composition, both are the same. Generally, bio-LPG is derived from vegetable or waste cooking oils’ biofuel. While incinerating or combusting, biofuel releases biogas which further gets chemically treated to use in the same manner as that of LPG.

The demand for bio-LPG is increasing because of its clean fuel property providing equivalent calorific value as that of fossil fuels such as diesel and petrol. Bio LPG reduces hazardous emissions such as Carbon Monoxide, Hydrocarbons, and Nitrogen dioxide leading to being an alternative to conventional fuels. Bio LPG is compatible to work with any LPG product and is delivered even to remote areas with lower carbon footprints which attracts firms, individuals, and governments to uplift the environment and social and governmental scores. For instance, Calor (the main supplier of bio-LPG in the UK) has the vision to supply only renewable fuel by 2040. As per the company's press release, bio-LPG has saved the environment from approximately 308 Mt of Carbon Dioxide in 2019 through the supply of bio-LPG for those living in remote and off-grid localities. To have visualization, the firm produces bio-LPG with 60% waste materials and 40% vegetable oils. To confirm with the compliance records, the firm shares that the production facility is based under the European Union, which facilitates the traceability of the product with many constraints.

For an industrial and commercial setting, the increase in the number of pubs, restaurant outlets, hotels, farms, and warehouses in remote areas which require conventional fuels for daily operations can increase the need for bio-LPG. The utility of bio-LPG is greater for the public and commercial spaces such as hospitals, sports complexes, grounds, and other commercial places. It enables firms to reduce the negative impact on the environment while being efficient in terms of cost. There are more projects to be undertaken upon bio-LPG as it is a fuel made from super waste material, which can lead to the reduction of carbon emission from industry and retail sectors to a great extent. For instance, at National LPG Conclave 2020, the Indian Oil company is expected to introduce bio-LPG to the Indian market by 2023. The firm has invested in developing a concept facility to convert biomass to liquified petroleum gas and bio-LPG, intending to offset 10-20% of the country's demand from LPG to bio-LPG. Along the same lines, Liquid Gas UK, which represents Liquified Petrol Gas in the United States, has expressed a vision to transform European Industries to bio-LPG by 2040. The association states that if the industry is fully transformed into Bio LPG, it will result in a 90% reduction in carbon emissions.

Reducing Carbon footprint across the Retail and Industrial sectors

With the increase in air pollution, bio-LPG can act as a clean alternative to support industrial applications such as processing, assembling in manufacturing industries, steam generation in power or energy industries to drive the turbine, and propel basic industrial functions required in all industries such as cogeneration, heating, cooling, lighting, and facilitate air conditioning throughout the premises. It would be better to use energy-intensive industries such as steel, iron, chemical, paper, food, and non-metallic mineral industries. In the infrastructure sector, energy is utilized for space heating, lighting, and cooking, for which consumers prefer renewable sources of energy. The transformation to renewable energy will drive up the demand for bio-LPG. For instance, Avanti Gas, based out of the UK, helps businesses and homes reduce their carbon footprint by 95%; the firm has its vision in line with the UK government's mission to phase out the use of fossil fuels by 2050. The firm offers bio-LPG at source and provides an account of carbon dioxide emissions that the customers save from the environment. Calor also offers bio-LPG for homes and businesses in the UK in the competing domain to meet the vision of the UK government.    

The European government regards the bio-LPG as a handy replacement for LPG appliances and vehicles that remains widely in use throughout Europe. The fuel is an asset for the environment as it replaces solid and liquid combustible and emitting fuels such as coal and lamp oil. As per the data by the European Commission, there are 40 million households in rural areas of the conventional gas grid that currently depends upon conventional fuels for a limited purpose.

Apart from this, the other drivers to the bio-LPG market can be falling energy costs when energy is produced in huge volumes enabling an economy of scale; setting up of bio-LPG facilities will increase employment opportunities, and the aim of making energy will be made available to all. These measures will lead to improved air quality, create a buffer for energy, and greater economic gain in the long run if implemented at the global level.

Challenges in transforming to the Bio LPG

The transformation to bio-LPG is elusive as there exist people living outside the cash economy who might not afford the cost of bio-LPG. This can pose a lack of financial support to purchase clean fuel. Moreover, biofuels do not appeal to the culture of the people living in rural areas. The efficient cooking stoves compatible with bio-LPG might be less beneficial for rural households. There are concerns regarding the lack of availability and uncertain supply of bio-LPG as its niche concept, which might drive up the cost of fuel. The majority of the production facilities are located in the United States, Brazil, and European nations. This makes expansion to other nations limited with proper knowledge transfer from the selected leading nations. Unequivocally, the bio-LPG can be transported to remote areas, but it would come at a cost that may be higher than local conventional fuels.

Regional Analysis

The bio-LPG production is extensive, with significant contributions from the United States and European Nations. The US mainly uses corn and soybean waste and residuals for generating biofuels and related by-products, and bio-LPG as a derivative from Biofuels. Brazil comes after the US as the country is known for producing bio-diesel and bio-LPG from the residuals of sugar cane. Germany, Argentina, and China also remain pivotal for the bio-LPG industries contributing to the production of bio-LPG. 

Recent Developments

Neste Corporation reached definitive agreements in March 2022 to form a 50-50 joint venture with Marathon Petroleum of the United States (Marathon). Following a conversion project at Marathon's refinery in Martinez, California, the joint venture will manufacture renewable diesel.

Repsol announced plans to develop a low-emission advanced biofuel plant in Spain in October 2020. Meanwhile, Preem AB announced plans to modernize its Lysekil refinery in October 2020, making it Scandinavia's largest generator of renewable fuel.

Preem AB announced a new project in October 2020 to restore the Lysekil refinery and make it Scandinavia's largest producer of renewable fuels. The business intends to redevelop the current Synsat plant, which generates environmental class 1 diesel at the moment. The reconstruction of the Synsat plant is expected to raise Preem's biodiesel and diesel supply by 650,000 to 950,000 cubic meters per year, which is two to three times larger than the refinery's present renewable production capability in Gothenburg.

COVID-19 Impact

The worldwide energy sector has been drastically affected as a result of the COVID-19 epidemic. The European Commission authorized a tax exemption for non-food biogas & Bio LPG used as motor fuel or heating in Sweden in June 2020. The goal of this tax break is to encourage biopropane and biogas usage to reduce the use of fossil fuels. As a result, the demand for Bio LPG has accelerated. Companies operating in the Sweden Bio LPG market are taking advantage of tax exemptions as a result of the epidemic, as industrialists and individuals become more aware of the importance of decreasing greenhouse gas emissions to protect the environment. Other nations are following the European Commission's lead and implementing 5-year or 10-year programs. This will indeed be beneficial for the Bio LPG market.

Segmentation

  • By Feedstock
    • Residual/Waste
    • Sugar
    • Oil
  • By End-user
    • Residential
    • Commercial
  • By Geography
    • Americas
    • EMEA
    • Asia Pacific

Frequently Asked Questions (FAQs)

Q1. What is the size of the global bio LPG market?
A1. Bio LPG Market was valued at US$229.629 million in 2020.  


Q2. What will be the bio LPG market size by 2027?
A2. The bio LPG market is expected to reach a market size of US$2,701.420 million by 2027. 


Q3. What are the growth prospects for the bio LPG market?
A3. The global bio LPG market is expected to grow at a CAGR of 42.21% over the forecast period. 


Q4. What factors are anticipated to drive the bio LPG market growth?
A4. The demand for bio-LPG is increasing because of its clean fuel property providing equivalent calorific value as that of fossil fuels such as diesel and petrol.


Q5. Which region holds the largest market share in the bio LPG market?
A5. Geographically, North America and European regions are expected to hold a significant share of the bio LPG market.

1. Introduction
1.1. Market Definition
1.2. Market Segmentation

2. Research Methodology
2.1. Research Data
2.2. Assumptions

3. Executive Summary
3.1. Research Highlights

4. Market Dynamics
4.1. Market Drivers
4.2. Market Restraints
4.3. Porters Five Forces Analysis
4.3.1. Bargaining Power of Suppliers
4.3.2. Bargaining Power of Buyers
4.3.3. The Threat of New Entrants
4.3.4. Threat of Substitutes
4.3.5. Competitive Rivalry in the Industry
4.4. Industry Value Chain Analysis

5. Bio LPG Market Analysis, By Feedstock
5.1. Introduction
5.2. Residual/Wastes
5.3. Sugar
5.4. Oil

6. Bio LPG Market Analysis, By End-User 
6.1. Introduction
6.2. Residential
6.3. Commercial

7. Bio LPG Market Analysis, By Geography
7.1. Introduction
7.2. Americas
7.3. EMEA
7.4. Asia Pacific

8. Competitive Environment and Analysis
8.1. Major Players and Strategy Analysis
8.2. Emerging Players and Market Lucrativeness
8.3. Mergers, Acquisitions, Agreements, and Collaborations
8.4. Vendor Competitiveness Matrix

9. Company Profiles
9.1. SHV Energy
9.2. ENI
9.3. Neste
9.4. Avanti Gas
9.5. Renewable Energy Group
9.6. Alkon Corporation
9.7. Irving Oil Ltd.
9.8. Calor Gas
9.9. Preem AB
9.10. Flogas Britain Limited

SHV Energy

ENI

Neste

Avanti Gas

Renewable Energy Group

Alkon Corporation

Irving Oil Ltd.

Calor Gas

Preem AB

Flogas Britain Limited

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