Bio LPG Market Size, Share, Opportunities, And Trends By Feedstock (Residual/Waste, Sugar, Oil), By End User (Residential, Commercial), And By Geography - Forecasts From 2023 To 2028

The Bio LPG market is projected to witness a compound annual growth rate of 39.37% to grow to US$3,499.572 million by 2028 from US$342.578 million in 2021.

Bio LPG is a renewable and sustainable gas, which is formed from a blend of residues, waste, and environment and sustainably sourced materials. Bio LPG has been a gaseous fuel that has come from the production processes, with the use of organic and renewable feedstock. Major companies have been investing in the development of novel and advanced solutions, and infrastructure, to produce bio-LPG, in the past few years.

Growth Drivers of the global market

Players have been making a significant impact on the overall market growth over the past few years. For instance, Rinnai UK, key hot water systems and supplier had stated that it had completed a detailed and comprehensive report into the possible savings of approximately 81% on carbon emissions, by utilizing bio-LPG on its sites. The company also stated that bio-LPG could be used to save a significant percentage of energy in off-grid laundry operations. These trends are expected to have a positive impact on the market, in the coming years.  Companies are also entering into strategic partnerships with other companies to increase their market potential.

The transition towards clean fuel

The bio-LPG demand is expected to surge in the coming years, due to the rise in the transition towards clean fuel, worldwide. The World Health Organization had stated that they recognize LPG and bio-LPG as clean fuels to challenge household air pollution. The international energy agency also recommended the usage of LPG to tackle and combat household energy-related air pollution.  Moreover, IPCC Special Report on Climate Warming also stated that gas-based cooking is suitable as combat and mitigation measures to reduce and decrease BC emissions. According to several reports, bio-LPG fuels reduce climate emissions at a significant rate and lead to net emissions decrease and reduction of approximately -4.4 Mt CO2 equivalent. Major countries have been adopting bio-LPG solutions to reduce carbon emissions. For instance, according to the data given by the Indian government, the country’s LPG consumption was 28.3 million tonnes in the year 2021-22. Moreover, in China, with the introduction of additional processing

Increasing demand for natural gas

Natural gas is a mixture of gases and liquids that are used to produce LPG and bio-LPG, the increasing demand for natural gas indicates a need for LPG in the market. Bio LPG is a renewable form of LPG made from water and residual. As per the PPAC, the need for natural gas in 2021-22 was 65,040 million standard cubic meters of gas and in the forecasted period the demand is anticipated to rise. Increasing demand for bio-LPG can also be attributed to cooking. The European government considers bio-LPG as a handy replacement for LPG appliances and vehicles, and it is also considered safe for kitchen use.

The government is on the verge to increase bio-LPG use in European countries in the projected period. With the increase in LPG demand for cooking and other purposes, have also been making significant developments. For instance, AG, a building products firm, had established its position as a market leader in sustainable construction, by switching to bio-LPG energy, which allowed carbon saving by up to 70%. The firm had manufacturing locations across Carryduff, Ballygawley, Toome, and others. In February 2021, UGI International a key LPG distributor announced that it had entered a novel development and supply partnership with Ekobenz. Under this novel agreement, UGI International had secured exclusive rights to Ekobenz’s overall supply of bio-LPG fuels.

The residual wastes-based bio-LPG market is projected to grow.

The issue of rising production of waste, coupled with the growing concerns regarding environmental pollution and climate change is prompting the rise in the usage of organic waste as a source for generating bio-LPG, as bio-LPG emits significantly lower levels of carbon.  Most of the municipal solid waste that is regularly dumped in landfills typically includes food waste.

According to the Shell TechXplorer 2021, Petroleum Development Oman's (PDO) expanding workforce is boosting trash production and straining already-strapped landfill infrastructure. Most of this trash, meanwhile, consists of biodegradable food waste that may be converted into biogas. According to FDA estimates, between 30 and 40 percent of the food supply in the US is wasted. The Sustainable development goals of the UN aim to halve food waste by 2030 by utilizing it in bio-LPG and increasing awareness among the population.

According to the UN Food Index Report 2021, the household contributed 61% of food waste as compared to 26% from food service, and 13% from retail. Thus, the growing world population is further indicating the increase in food waste. For instance, the world population is estimated to exceed 8.5 billion by 2030 from 8 billion in 2022 as per the World UN World Population Prospects report 2022.

Asia Pacific is an Expected Dominant Market

The favourable government initiatives are one of the major reasons for the bio-LPG market growth in the region. In November 2020, a new free-trade agreement (FTA), the Regional Economic Comprehensive Partnership (RCEP) between 15 Asia-Pacific countries including China, Japan, South Korea, Australia, and New Zealand is expected to eliminate the tariffs for biofuels and feedstocks. As per the agreement, China will decrease import tariffs on undenatured and denatured ethanol, from 40pc and 30pc respectively to zero, by 20 years after the agreement comes into force.

According to estimates from National Energy Administration (NEA), the renewable energy capacity has increased in China, making it 47.3% of total China’s generation capacity in the year 2022. This reflects favourable prospects for the expansion of production facilities for sustainable fuels such as bio-LPG in the upcoming years.

Various investments and collaborations in the region by key market players are further expected to boost the growth of the market. In January 2021, Australian Airlines Qantas and global giant BP entered a strategic partnership with an aim to reduce carbon emissions in the aviation sector. This will contribute towards promoting the growth of sustainability under aviation fuel in Australia overall.

The companies have both set ambitions to achieve net-zero carbon emissions by 2050 through projects including advanced sustainable fuels, advocacy for further decarbonization in the aviation sector, renewable power, carbon management, and emerging technology.

Key Developments

• In June 2021, Avanti Gas, one of the key players, in the market, announced that it had received its first delivery of bio-LPG from Ekobenz, under their novel partnership. Ekobenz, a key player in this sector, has specialization in the catalytic conversion of bioethanol to bio-LPG and bio gasoline.
• In March 2022, Neste Corporation reached a definitive partnership in a 50-50 joint venture with Marathon Petroleum of the United States. The joint venture is anticipated to produce biodegradable substances at Marathon refinery in California.
• In December 2021. Orbex launched Orbex Prime Rocket in collaboration with Calor. It is a bio-LPG solution made from organic feedstocks such as plant and vegetable waste material which reduces CO2 emissions by up to 80% as compared to conventional LPG from fossil fuels.
• In 2021, India's Ministry of New and Renewable Energy introduced the New National Biogas and Organic Manure Programme (NNBOMP), which was intended for biogas plants that can produce 1 to 25 cubic meters of gas per day.

Bio LPG Market Scope:

Segmentation:

• By Feedstock
  • Residual/Wastes
  • Sugar
  • Oil
• By End-User
  • Residential
  • Commercial
• By Geography
  • Americas
  • Europe Middle East and Africa
  • Asia Pacific