Bio LPG Market

Tax Exemptions on Non Food-based Bio LPG Boost Consumption during COVID-19 Outbreak

The COVID-19 pandemic has radically altered the global energy sector. The European Commission has approved a tax exemption for non-food based biogas and Bio LPG (Liquefied Petroleum Gas) used as motor fuel or for heating in Sweden. The objective of this tax exemption is to increase the consumption of biopropane and biogas to reduce the use of fossil fuels. Due to the ongoing pandemic, companies operating in the Sweden Bio LPG market are capitalizing on tax exemption, as industrialists and individuals are becoming aware about reducing greenhouse gas emissions to safeguard the environment.

Other governments are taking cues from the European Commission and are introducing schemes for 5 year or 10 year plans. This will help industrialists to transition toward advanced biofuels such as Bio LPG. Tax exemptions are becoming necessary to stimulate the production and use of domestic and imported Bio LPG and biogas.

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Cellulosic and Waste-feedstock Facilitate Commercial Production of Bio LPG

Gaseous conversion & synthesis and liquid conversion & synthesis are two advanced chemical processes used to manufacture Bio LPG. However, these processes are technically challenging and not well-established commercially. This is anticipated to cause uncertainty in the Bio LPG market. As such, these chemical processes hold promising potentials to use cellulosic- and waste-feedstock on a large scale to produce significant volumes of biopropane. Manufacturers in the Bio LPG market can capitalize on this business opportunity, since these processes help to break down large and complex molecules of biomass into smaller and simpler molecules that can be synthesized for the production of fuels. As such, the market for Bio LPG is expected to expand at an explosive CAGR of ~83% during the years 2020 to 2030.

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Manufacturers Commercialize Bio LPG with Refining Process of Biodiesel

Bio LPG is being associated with low carbon footprint compared to conventional LPG. Hence, SHV Energy— a global distributor and marketer of LPG is increasing its production capacities with the help of sustainably sourced renewable feedstock. As such, the Bio LPG market is projected to surpass US$ 65 Bn by the end of 2030. Manufacturers are adopting the renewable biodiesel production process, which also generates by-products of biopropane.

The cost-efficient production technique involves collection of Bio LPG from waste off-gases during the refining process of biodiesel. In this way, manufacturers are able to commercialize the large-scale production of Bio LPG. As such, Bio LPG is being purified to produce conventional propane. Companies in the Bio LPG market are harnessing the advantages of biological processes to boost their output capacities. The hydrotreatment of bio-oils is another production technique, which is being used to commercialize Bio LPG.

Renewable Propane Scales Business in Transportation Applications in California

Apart from hydrotreatment of bio-oils and refining process of biodiesel, the fermentation of sugars has reached a demonstration stage for the large-scale production of Bio LPG. The process with the largest potential for volume is the gaseous conversion and synthesis of cellulosics or organic wastes. Bio LPG is being publicized as renewable propane in California. Companies in the bio LPG market are in a profitable position in California, since renewable propane is increasingly replacing conventional gasoline and diesel in transportation applications.

Multi-product processes of renewable diesel and renewable natural gas are being harnessed by manufacturers in the Bio LPG market to produce renewable propane. Thus, renewable propane is gaining popularity as a sustainable fuel solution in California due to constant replenishment of energy with the help of natural decay of organic matter.

Favorable Combustion Attributes of Biopropane Preferred in Vehicles over Diesel

The growing individual acceptance toward reducing, reusing, recovering, and recycling resources is benefitting companies in the Bio LPG market. Manufacturers are unlocking revenue opportunities in millions of the U.S. households, since Bio LPG is replacing methane in space conditioning, cooking, and water heating applications. Increasing number of people is using propane to fuel their outdoor grills. The ever-evolving automotive sector is also creating value-grab opportunities for companies in the Bio LPG market, since propane serves as a good alternative to vehicle fuel.

Favorable combustion attributes and clean burning of renewable propane are highly preferred over gasoline and diesel in vehicles. Moreover, Bio LPG is easily stored on vehicles in low-pressure tanks at a reasonable cost. The multi-node network of retailers is another key driver, which is bolstering the growth of the market for Bio LPG. The concept of autogas is growing popular at vehicle fueling stations.

Low-NOx Propane Engine Technology Being Harnessed in Heavy-duty On-road Vehicles

Even though Bio LPG is transforming the transportation sector, manufacturers need to improve its environmental performances. Stakeholders in the Bio LPG market are increasing their R&D muscle in the advanced engine propane technology, since this technique leads to very low emissions of nitrogen oxides (NOx). ROUSH CleanTech— a specialist in alternative fuel vehicle technology, manufactured a propane engine, which was recently certified to meet California’s Optional Low-NOx Standard. The low-NOx propane engine technology is being preferred in heavy-duty on-road vehicles such as shuttle and school buses.

Non-road applications of Bio LPG involve alternative fuel options for forklifts and remote agricultural purposes such as the deployment of propane engines to power irrigation equipment, water pumps, and citrus crop heaters. These heaters prevent the crop from frost damage. Companies in the Bio LPG market are enabling engine-related improvements for propane-fueled products that help to minimize greenhouse emissions and other pollutants.

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Analysts’ Viewpoint

The decarbonization strategy is being incentivized by several government authorities in Spain and other countries to achieve a speedy economic recovery during the ongoing COVID-19 pandemic. The U.S. transportation sector is moving toward near zero emission levels with the consumption of renewable propane. However, manufacturers in the Bio LPG market need to take giant strides to improve the environmental performances of renewable propane. In order to achieve this, manufacturers should increase their R&D in the low-NOx propane engine technology, which is gaining widespread application in on-road and off-road applications of heavy-duty engines and forklifts, respectively. Commercial-grade biopropane is helping manufacturers tap into incremental opportunities in European and Asian countries.