Use of Propane in Place of Conventional Fuels to Meet Mounting Power Needs is Reshaping Global Propane Market, says TMR
The global propane market is fragmented in nature in the downstream segment, and players in this space are focusing on exclusive agreements, mergers and acquisitions, joint ventures, and long term agreements between importers and exporters. Huge capital requirement to enter the propane market is expected to ensure that the threat of new entrants remains low in the coming years, states a new report by Transparency Market Research (TMR). Companies such as Aero Energy have employed the strategy of expanding their customer base by offering a round-the-clock emergency service to their customers. AmeriGas Propane Inc is expected to undertake small-scale acquisitions in the near future, to increase its product portfolio and strengthen its entry in emerging markets. Other key players in the market include Campora Propane Services, DCC plc, Ferrellgas Partners, and Lykins Energy Solutions.
According to the report, the global opportunity in the propane market is expected to rise from US$121.83 bn in 2015 to US$145.82 bn by 2022. On the basis of application, the residential segment is expected to lead and account for 30.47% of the market by 2022 as it emits less carbon during combustion. The nontoxicity of propane is the other factor boosting its popularity among consumers. By region, Asia Pacific led in 2013 and is expected to do so even in the coming years owing to the extensive use of propane for space heating in regions having low temperatures such as Japan, China, and South Korea. Asia Pacific is expected to account for 41.39% of the global propane market by 2022.
Need for Clean Fuel Propels Demand for Propane Worldwide
“New rules and legislations to limit sulfur emissions are being implemented in the global shipping industry and thus, propane would gain wider acceptance in various applications,” states a TMR analyst. Propane price is lesser than bunker oil, which makes it even more popular, driving their demand. Additionally, conventional fuels such as diesel and petrol have high carbon emission, leading to an increase in the overall carbon footprint, whereas propane is comparatively cleaner, thus driving the market. Other factors boosting the global demand for propane include the focus on decreasing the dependency on conventional gas sources and rising use of propane in the transportation sector in African countries.
Limited Awareness about Benefits of Propane to Hinder Growth of Market
Although propane is a clean, feasible and economical fuel in the domestic and transportation sector, it faces serious challenges relating to transportation, supply, and storage. The distribution, storage, and handling of propane require specialized equipment, tanks, and vehicles, thus increasing the overall transportation and handling cost. This in turn increases the final cost of propane, thereby dampening their demand. Additionally, with limited number of propane-fueled vehicles and propane retailing infrastructure, there will be a constrained demand for propane from the transportation sector.
Use of Propane for Power Generation to Expand Market’s Scope
A rise in the global warming and increase in demand for energy are expected to encourage the growth of the global propane market. Propane is increasingly being preferred owing to their lower cost in comparison to other substitute fuels. Propane is also poised to be one of the most lucrative energy sources for power generation units, since it is capable of generating enough energy, required for operations. A propane-based power generator can support loads of up to 100 MW, thus easily having the capacity to fulfil the demand from industries. Thus, the use of propane for power generation is emerging as a new opportunity for growth in the market.
This information is based on the findings of a report published by Transparency Market Research titled “Propane Market - Global Industry Analysis, Size, Share, Growth, Trends, and Forecast 2014 - 2022.”
The global propane market is segmented as follows:
- Chemical & Refinery
- North America
- Rest of Europe
- Asia Pacific
- Rest of Asia Pacific
- Middle East and Africa (MEA)
- Saudi Arabia
- Rest of Middle East and Africa
- Latin America
- Rest of Latin America
Transparency Market Research (TMR) is a market intelligence company, providing global business information reports and services. Our exclusive blend of quantitative forecasting and trends analysis provides forward-looking insight for thousands of decision makers. TMR’s experienced team of analysts, researchers, and consultants, use proprietary data sources and various tools and techniques to gather, and analyze information. Our business offerings represent the latest and the most reliable information indispensable for businesses to sustain a competitive edge.
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