DUBLIN — With the liquified petroleum gas sector exploring almost a dozen different pathways to pave way for a decarbonized future, the bio LPG market is expected to register a double-digit growth, according to the "Bio LPG Market - Global Industry Analysis (2017 - 2020), Growth Trends and Market Forecast (2021 - 2025)" published by ResearchAndMarkets.com.
The publisher has predicted a remarkable 47% CAGR for the market between 2021 and 2025. However, the bid to reduce dependence on conventional LPG will be replete with several commercial and technological hurdles.
Produced from organic and renewable feedstock, bio LPG mimics the chemical structure of conventional LPG but with less than 80% carbon footprint, as per Liquid Gas Europe. The demand for impactful and affordable access to modern energy is increasing and this will continue helping the market gain impetus through the report's forecast period.
Bio LPG has recently been issued Renewable Transport Fuel Certificates (RTFCs) by the UK Department of Transport. Several other policymakers are expected to join the bandwagon and recognize bio LPG as an effective method for reducing carbon footprint. The report identifies these developments as chief drivers of the market.
Europe produces nearly 90% of bio LPG and much of it is marketed in the region itself. To this day, Europe remains one of the highly lucrative markets, trailed by North America. As per this report, Europe accounts for more than 90% of the global market share hence its dominance is expected to continue through the course of the forecast period.
The presence of several leading players such as ENI, Nestle Oil, Total SE, Global Bioenergies, PREEM Group, and others has been giving tailwinds to the growth registered in the Europe market. In 2018, Nestle commenced the world's first largescale renewable production facility in Rotterdam, Netherlands. Backed by expansion strategies undertaken by some of the leading market players, Europe will continue boasting lead in the market.
Key players operating in the market are primarily focusing on strategic collaborations. While their intent is mostly set on strengthening their footprint, they also are focusing on novel opportunities.
For instance, in October 2020, Repsol announced its plans for building a low emission advanced biofuel plant in Spain. Meanwhile, in October 2020, Preem AB launched a project to rebuild its Lysekil refinery to become the largest producer of renewable fuel in Scandinavia.
Some of the companies profiled in the report are Total SE, ENI, Neste Oil, PREEM Group, Renewable Energy Group, AvantiGas, Irving Oil, Global Bioenergies, SHV Energy, and Diamond Green Diesel.
Key Insights into Bio LPG Market:
- Commercialization of advanced chemical processes to boost production by 400% by 2025
- By 2025, the global bio LPG demand to displace conventional LPG demand by 30%
- The future of full-scale bio LPG production depends upon the favorable government policies related to usage of vegetable oil/palm oil as the key feedstock
- Europe to lift bans or upgrade policies imposed on usage of palm oil for bio LPG recovery and to follow the sustainability in palm oil production program laid by Malaysian Sustainable Palm Oil (MSPO)
- High future potential of bio LPG have urged oil & gas supermajors, such as Royal Dutch Shell and Total to invest in bio LPG production facilities.