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The propane market in US size is forecast to increase by USD 7.56 billion at a CAGR of 6.28% between 2023 and 2028. The propane market in the US is driven by several key factors. The increasing demand for clean-burning fuels as an alternative to conventional gas and fossil fuels, such as coal and oil, is a significant growth factor. Furthermore, economic slowdowns have led to a focus on energy efficiency, making propane an attractive option due to its cost-effectiveness and low carbon emissions. Market trends include advancements in propane storage and transportation, as well as the development of renewable propane. However, the availability of competitive alternative fuels, such as natural gas and electricity, poses a challenge to the market's growth. Despite this, the propane market is expected to continue its growth trajectory due to its environmental benefits and cost-effectiveness.
The Propane market in the US is driven by its widespread usage in various sectors including residential heating, cooking, grills, motor vehicles, and industrial applications. Propane, a clean-burning fuel, is an alternative to conventional gas sources such as natural gas (NG), crude oil, ethane, methane, and butane. Propane is also known as liquefied petroleum gas (LPG), and it is often used as a substitute for heavy hydrocarbons in industries. In the residential sector, propane is used for heating and cooking purposes, particularly in regions where NG is not readily available. Propane is also used as an autogas for motor vehicles, offering advantages such as lower carbon emissions and reduced nitrogen oxides and particulate matter compared to petrol vehicles.
Moreover, the economic slowdowns have led to an increased focus on energy efficiency and cost savings, further boosting the demand for propane as a clean and cost-effective fuel. Despite its environmental benefits, the production and use of propane, along with other fossil fuels, contribute to carbon emissions, acid rain, and other environmental concerns. Regulatory support and incentives are essential to promote the adoption of propane as a preferred fuel choice and to mitigate its environmental impact. The sales volume of propane is expected to grow due to its versatility, clean-burning properties, and increasing acceptance as an alternative fuel.
The market research report provides comprehensive data (region-wise segment analysis), with forecasts and estimates in "USD billion" for the period 2024-2028, as well as historical data from 2018-2022 for the following segments.
The Industrial segment is estimated to witness significant growth during the forecast period. Propane, a heavy hydrocarbon gas, holds significant market importance in the US due to its diverse applications in various sectors. In the residential segment, it is extensively used for heating and cooking, while grills and motor vehicles, particularly those running on autogas, also contribute to its demand. Industrial usage of propane is closely linked to economic activity, with growth in manufacturing, construction, and other sectors leading to increased demand for propane in processing and heating applications. Cold weather significantly boosts demand in industries such as agriculture, construction, and food processing, where propane is utilized for heating and drying purposes. Seasonal weather fluctuations positively impact short-term demand for propane. Furthermore, the competitiveness of propane prices relative to alternative fuels, such as natural gas, electricity, and heating oil, influences its industrial demand.
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The industrial segment was valued at USD 7.09 billion in 2018 and showed a gradual increase during the forecast period.
Our market researchers analyzed the data with 2023 as the base year, along with the key drivers, trends, and challenges. A holistic analysis of drivers will help companies refine their marketing strategies to gain a competitive advantage.
Advancements in propane storage and transportation is the key driver of the market. Propane, a clean-burning hydrocarbon gas, is widely used as a fuel source in the US, particularly for heating and cooking applications. The increasing preference for propane over traditional fuels like crude oil, natural gas (NG), ethane, and methane is attributed to its higher efficiency and environmental friendliness. Composite materials, such as fiberglass and high-density polyethylene (HDPE), are increasingly utilized in propane storage tanks due to their superior corrosion resistance, lightweight, and durability. These advanced tanks offer longer service life and lower maintenance requirements compared to traditional steel tanks. Modern underground propane storage facilities incorporate advanced engineering designs and construction techniques to ensure safety and reliability.
Moreover, corrosion protection, leak detection systems, and secondary containment measures are standard features to prevent soil and groundwater contamination. IoT-enabled sensors and telemetry systems are deployed in propane storage tanks to monitor inventory levels, detect leaks, and optimize delivery schedules. Real-time data analytics and remote monitoring capabilities enable propane suppliers to manage inventory efficiently and ensure timely replenishment, thereby enhancing customer satisfaction and operational efficiency.
The development of renewable propane is the upcoming trend in the market. Renewable propane is an alternative to conventionally produced propane derived from natural gas, crude oil, ethane, and methane. This type of propane can be sourced from renewable feedstocks, such as biomass, waste oils, agricultural residues, and bio-based hydrocarbons. The production processes for renewable propane include thermochemical methods like gasification and pyrolysis, biological processes such as fermentation and anaerobic digestion, and chemical processes such as hydrogenation and Fischer-Tropsch synthesis. Renewable propane is recognized as carbon-neutral or low-carbon due to the carbon dioxide absorption during feedstock growth, thereby offsetting the emissions generated during production and combustion. This eco-friendly alternative to conventional propane offers environmental benefits by reducing reliance on fossil fuels.
The availability of competitive alternative fuels is a key challenge affecting the market growth. The propane market in the US faces substantial competition from alternative fuels, particularly natural gas, crude oil derivatives such as ethane and methane. These alternatives offer advantages like lower emissions, cost-effectiveness, and energy efficiency, making them attractive options for various applications, including transportation and heating systems. The US, with its abundant domestic natural gas resources and extensive pipeline infrastructure, poses a significant challenge to propane's market share. The expansion of natural gas distribution networks and the availability of low-cost shale gas further contribute to the displacement of propane in residential, commercial, and industrial sectors. Consequently, the propane market in the US is experiencing a shift towards applications where it offer unique advantages, such as portable fuel for outdoor activities and industrial processes where its high-energy density is desirable.
The market forecasting report includes the adoption lifecycle of the market, covering from the innovator's stage to the laggard's stage. It focuses on adoption rates in different regions based on penetration. Furthermore, the report also includes key purchase criteria and drivers of price sensitivity to help companies evaluate and develop their market growth analysis strategies.
Customer Landscape
Companies are implementing various strategies, such as strategic alliances, partnerships, mergers and acquisitions, geographical expansion, and product/service launches, to enhance their presence in the market.
Air Liquide SA - The company offers propane pure gas with up to 99.9 percent purity for variety of applications, including chemical synthesis, refrigeration and flame gas .
The market research and growth report includes detailed analyses of the competitive landscape of the market and information about key companies, including:
Qualitative and quantitative analysis of companies has been conducted to help clients understand the wider business environment as well as the strengths and weaknesses of key market players. Data is qualitatively analyzed to categorize companies as pure play, category-focused, industry-focused, and diversified; it is quantitatively analyzed to categorize companies as dominant, leading, strong, tentative, and weak.
Propane, a clean-burning fuel derived from natural gas, crude oil, and heavy hydrocarbons, holds a significant market position in the US energy sector. It is extensively used for residential heating, cooking, grills, and motor vehicles as autogas. Propane's popularity is due to its high energy efficiency, low carbon emissions, and reduced nitrogen oxides and particulate emissions compared to crude oil, natural gas, and petrol vehicles. The US propane market is influenced by various factors, including economic slowdowns and energy efficiency trends. The demand for propane in the residential sector is driven by its use as a clean and cost-effective alternative to conventional gas for heating and cooking.
Moreover, in the transportation sector, propane is gaining traction as an alternative fuel for vehicles, contributing to reduced carbon emissions and improved air quality. Propane production in the US is primarily sourced from natural gas processing and crude oil refining. Alternative feedstocks like tall oil and renewable sources such as biomass are increasingly being explored for biolpg production through processes like hydroprocessing and Fischer-Tropsch. The growing focus on reducing carbon intensity scores and the increasing availability of commercial-grade LPG are expected to boost the propane market in the US.
Market Scope |
|
Report Coverage |
Details |
Page number |
148 |
Base year |
2023 |
Historic period |
2018-2022 |
Forecast period |
2024-2028 |
Growth momentum & CAGR |
Accelerate at a CAGR of 6.28% |
Market growth 2024-2028 |
USD 7.56 billion |
Market structure |
Fragmented |
YoY growth 2023-2024(%) |
5.72 |
Key companies profiled |
Air Liquide SA, BP Plc, Chevron Corp., China Petrochemical Corp., CHS Inc., ConocoPhillips Co., Evonik Industries AG, Ferrellgas, Gas Innovations, Growmark Inc., Phillips 66, SHV Holdings N.V., Suburban Propane, Superior Plus Corp., TotalEnergies SE, and UGI Corp. |
Market dynamics |
Parent market analysis, market growth inducers and obstacles,market forecast , fast-growing and slow-growing segment analysis, COVID-19 impact and recovery analysis and future consumer dynamics, market condition analysis for the forecast period |
Customization purview |
If our market report has not included the data that you are looking for, you can reach out to our analysts and get segments customized. |
Competitive landscape |
Leading Companies, Market Positioning of Companies, Competitive Strategies, and Industry Risks |
We can help! Our analysts can customize this market research report to meet your requirements Get in touch
1 Executive Summary
2 Market Landscape
3 Market Sizing
4 Historic Market Size
5 Five Forces Analysis
6 Market Segmentation by End-user
7 Market Segmentation by Grade Type
8 Market Segmentation by Type
9 Customer Landscape
10 Drivers, Challenges, and Trends
11 Vendor Landscape
12 Vendor Analysis
13 Appendix
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