Propane Market Share

Global Propane Market Overview

Propane Market Size was valued at USD 7.80 billion in 2023. The Propane industry is projected to grow from USD 8.11 Billion in 2024 to USD 10.67 billion by 2032, exhibiting a compound annual growth rate (CAGR) of 3.49% during the forecast period (2024 - 2032). Need for a clean source of fuel in residential and commercial applications is key market drivers enhancing market growth.

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Propane Market Trends

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  Weather conditions such as cold temperatures and snowfall driving the market growth

  
  

Weather conditions such as cold temperatures and snowfall can have a significant impact on the demand for propane, which is commonly used as a heating fuel. In regions with colder climates, propane is used to heat homes, businesses, and other facilities, making it an essential commodity during the winter months. When temperatures drop, more propane may be needed to maintain comfortable indoor temperatures, which can increase demand and drive up prices. In addition to cold temperatures, heavy snowfall can also impact the propane market. Snow can make it difficult for propane delivery trucks to reach their destinations, leading to supply shortages and higher prices. This is because many propane delivery trucks are not equipped to travel in deep snow or on icy roads, and the risk of accidents is higher during severe weather conditions. In some cases, propane tanks may also become buried in snow, making it difficult for homeowners to access their fuel supply.

Therefore, weather conditions play a critical role in the propane market. When temperatures drop and snowfall increases, demand for propane can rise, leading to higher prices. Propane suppliers and customers must be prepared to handle the challenges posed by severe weather conditions, including ensuring adequate supply levels, investing in appropriate transportation and delivery equipment, and taking necessary precautions to ensure the safe and efficient use of propane. Thus, driving the Propane market revenue.

Tax incentives for the use of propane, for example, can encourage consumers and businesses to switch to propane as a primary energy source. This can lead to an increase in demand for propane, driving up prices in the market. Similarly, regulations on the production and use of other energy sources can also impact demand for propane. For instance, regulations that limit the use of certain types of fossil fuels such as coal or oil may increase demand for propane as an alternative heating source. Furthermore, government policies can also influence the infrastructure and logistics of the propane market. For instance, policies that provide funding for the development of propane storage and transportation infrastructure can increase the availability of propane in the market, leading to more stable prices. Similarly, policies that promote the use of propane in vehicles, such as tax credits or grants, can increase demand for propane and create new opportunities for growth in the propane market CAGR.

Thus, government policies can have a significant impact on the propane market, influencing both supply and demand factors. Propane suppliers and customers must be aware of these policies and stay informed about changes that may impact the market in the future. By understanding the role of government policies in the propane market, stakeholders can make informed decisions that help ensure the long-term viability and sustainability of the industry.

Propane Market Segment Insights

Propane End-Use Insights

Based on end-use, the  propane market segmentation includes residential construction, commercial construction, automotive and transportations, and process industry. The automotive and transportations Propane segment dominated the market. This is because propane is used as a fuel for vehicles, including buses, taxis, forklifts, and other commercial vehicles. Propane is a clean-burning alternative to gasoline and diesel, with lower emissions and reduced environmental impact. As a result, many businesses and organizations are adopting propane as a primary fuel source for their vehicles, driving demand for propane in the automotive and transportation industry.

However, the other segments also play important roles in shaping the industry. For instance, residential and commercial construction demand propane for heating and cooking, while the process industry uses propane in various manufacturing processes. The demand for propane in these industries may fluctuate depending on factors such as economic conditions, government regulations, and weather conditions.Figure 1:Propane Market by End-Use, 2022 & 2032 (USD billion)                           

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Propane Regional Insights

By region, the study provides market insights into North America, Europe, Asia-Pacific and Rest of the World. The Asia-Pacific Propane market will dominate, owing to the various factors such as increasing demand for energy, rapid industrialization, and urbanization. The region is dominated by countries such as China, India, Japan, and South Korea. The residential and commercial heating sector is one of the major markets for propane in the Asia-Pacific region. Propane is used in these sectors as a heating fuel, particularly in colder regions, due to its high energy density and lower carbon emissions compared to traditional heating fuels. The transportation sector is also a growing market for propane in the region, with increasing demand for clean and affordable fuel alternatives. Moreover, China’s Propane market held the largest market share, and the Indian Propane market was the fastest-growing market in the Asia-Pacific region.

Further, the major countries studied in the market report are The U.S., Canada, German, the UK, France, Spain,  ItalyChina, Japan, India, Australia, South Korea, and Brazil.

Figure 2:PROPANE MARKET SHARE BY REGION 2022 (%)                         

Source: Secondary Research, Primary Research, MRFR Database and Analyst Review

Europe's Propane market accounts for the second-largest market share due to propane is used as an alternative fuel for vehicles, particularly in countries where diesel and gasoline are heavily taxed. The use of propane in transportation offers environmental benefits, as it produces fewer emissions than traditional fuels. In addition, the industrial sector is also an important market for propane in Europe. Propane is used in industrial processes such as metalworking, food processing, and chemical manufacturing, among others. Further, the German Propane market held the largest market share, and the UK Propane market was the fastest-growing market in the European region.

The North America Propane Market is anticipated to develop at the fastest CAGR from 2023 to 2032. This is due to the increasing demand for propane as a heating fuel in residential and commercial buildings, as well as its use as a fuel for vehicles and industrial processes. Propane is a popular choice for heating in colder regions of North America due to its high heating value and versatility, which allows it to be used in a wide range of heating applications. Similarly, the use of propane in the transportation industry is growing in popularity due to its lower emissions and lower cost compared to traditional fuels.

Propane Key Market Players & Competitive Insights

Leading market players are investing heavily in research and development to expand their product lines, which will help the Propane market, grow even more. Market participants are also undertaking several strategic activities to increase their  footprint, with important market developments including new product launches, contractual agreements, mergers and acquisitions, higher investments, and collaboration with other organizations. The Propane industry must offer innovative products to expand and survive in a more competitive and rising market climate.

Manufacturing locally to minimize operational costs is one of the key business tactics manufacturers use in the  Propane industry to benefit clients and increase the market sector. In recent years, the Propane industry has offered some of the most significant advantages to the market. Major players in the Propane market, including Ferrellgas (US), Royal Dutch Shell plc (Netherlands), Exxon Mobil Corporation (US), Chevron Corporation (US), Equinor ASA (Norway), Eni SpA (Italy), ConocoPhillips Company (US), Chesapeake (US), Anadarko Petroleum Corporation (US), Canadian Natural (Canada), and others, are attempting to increase market demand by investing in research and development operations.

Chevron Corporation is an American multinational energy corporation with operations in more than 180 countries. The company is engaged in oil and gas exploration and production, refining and marketing, chemicals, and power generation. In recent years, Chevron has been actively involved in the propane market through its subsidiary, Chevron Phillips Chemical Company LLC. The company is a leading producer of propane and other petrochemicals, with a significant presence in the North American market. For instance, in July 2019, Chevron Phillips Chemical Company LLC recently announced the expansion of its Gulf Coast petrochemicals project, which includes the construction of a new propane dehydrogenation unit. The new unit will have the capacity to produce 1.65 million metric tons of polymer-grade propylene per year, further strengthening Chevron's presence in the propane market.

Canadian Natural Resources Limited is a major Canadian oil and gas exploration, development, and production company, with operations across Canada, the United Kingdom, and offshore Africa. The company is involved in the production of crude oil, natural gas, and natural gas liquids, including propane. For instance, in January 2020, Canadian Natural announced its plan to invest in the construction of a propane dehydrogenation (PDH) plant in Canada. The facility, to be located in Alberta, will have a production capacity of 550,000 tonnes per year of polymer-grade propylene, a key feedstock for the manufacturing of various plastics and resins.

Key Companies in the Propane market include

• Ferrellgas (US)


• Royal Dutch Shell plc (Netherlands)


• Exxon Mobil Corporation (US)


• Chevron Corporation (US)


• Equinor ASA (Norway)


• Eni SpA (Italy)


• ConocoPhillips Company (US)


• Chesapeake (US)


• Anadarko Petroleum Corporation (US)


• Canadian Natural (Canada)

Propane Industry Developments

In March 2021, Ferus Natural Gas Fuels and Bluon Energy announced their partnership to develop propane-powered air conditioning systems for commercial and industrial buildings.

In February 2021, Generac Power Systems launched a new line of propane-powered generators for residential and commercial customers.

In January 2021, Superior Plus Corp. completed its acquisition of Diversified Energy, a propane retailer serving customers in the southeastern United States.

In December 2020,  Partners LP and DCC LPG announced a partnership to acquire and operate propane terminals and related assets in the United States.

In November 2020, Clean Energy Fuels Corp. announced a collaboration with Total S.A. to develop and deploy natural gas and renewable natural gas (RNG) fueling infrastructure in the United States.

Propane Market Segmentation

Propane End-Use Outlook

• Residential Construction


• Commercial Construction


• Automotive & Transportations


• Process Industry

Propane Regional Outlook

• North America
  
  
  
  • US
  
  
  • Canada
  
  
  
  


• Europe
  
  
  
  • Germany
  
  
  • France
  
  
  • UK
  
  
  • Italy
  
  
  • Spain
  
  
  • Rest of Europe
  
  
  
  


• Asia-Pacific
  
  
  
  • China
  
  
  • Japan
  
  
  • India
  
  
  • Australia
  
  
  • South Korea
  
  
  • Australia
  
  
  • Rest of Asia-Pacific
  
  
  
  


• Rest of the World
  
  
  
  • Middle East
  
  
  • Africa
  
  
  • Latin America