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Butane Market Overview
Butane Market Size is forecast to reach $ 164726.9 Million by 2030, at a CAGR of 7.30% during forecast period 2024-2030. Butane is an organic compound that refers to either of two structural isomers, isobutane (also called "methylpropane") or n-butane. The global demand for butane is rising due to its growing demands from automobile and petrochemical industries and this trend is projected to persist even during the forecast period. Butane is mainly used as LPG in residential and commercial purposes for heating and cooking purposes. Moreover, increasing usage of butane in power generation is driving the demand for the butane market during the forecast period.
Report Coverage
The report: “Butane Market – Forecast (2024-2030)”, by IndustryARC, covers an in-depth analysis of the following segments of the Butane Market.
Key Takeaways
- North America is the second largest region for the butane market during the forecast period. The rapid advancement in the shale revolution in the U.S. has positively impacted the butane market.
- LPG is used both for domestic and industrial premises in centralized heating solutions. Some other industries that depend mostly on LPG are food processing and paper industries. LPG is also used to produce electrical energy by running turbines.
- Butane market is expected to grow because of the popularity of autogas as it is cheaper than diesel and gasoline. According to World LPG Association, there are more than 27million autogas vehicles in use around the world with over 15million vehicles in Europe.
- Stringent environmental regulations for limiting the use of CFCs have fueled the demand for most popularly used aerosol propellants butane and propane.
By Type - Segment Analysis
N-Butane segment held the largest share in the butane market in 2023. N-Butane is linked in straight chain and is blended with gasoline to increase its volatility. It is derived as a by-product during crude oil refining and is extracted during the gas processing plants located near natural gas or crude oil reservoirs. Whereas, isobutane is mainly used as an alkylating agent to produce different compounds with a high octane number.
By Application - Segment Analysis
Liquefied Petroleum Gas (LPG) held the largest share in the butane market in 2023 growing at a CAGR of 7.30% during the forecast period. As butane is one of the main feedstocks used to produce LPG, the extensive adoption of LPG as a domestic and automotive fuel worldwide would serve as another essential expenditure growth-promoting factor. The automobile industry is a prominent end-user of LPG. This attributes to the environmental benefits exhibited by LPG when used in automotives as it is an efficient substitute to fossil fuels.
Geography - Segment Analysis
Asia-Pacific dominated the butane market with a share of more than 42.3% during the forecast period. China and India are the major contributing nations because of supportive government policies and subsidies which in turn has resulted in increased demand of butane. According to HIS Global Outlook, global LPG trade volumes increased 36% between 2010 and 2015 due to increased demand from urbanizing populations in China and India, and widespread government policies to encourage fuel switching in these as well as other countries.
Drivers – Butane Market
· Government initiatives and policies to drive the usage of LPG
Increasing number of government initiatives for subsidies in China, India, and Indonesia to promote LPG adoption over other fossil fuels is supporting the growth of industry. The Indian government initiated the Pradhan Mantri Ujjwala Yojana (PMUY) program in 2016, through which the government aimed at distributing 50 million LPG cylinders to families below the poverty line. The government of Indonesia initiated Kerosene to LP Gas Conversion Programme to promote the use of LPG and avoid the use of kerosene as cooking fuel among the households in the region. The Indonesian government distributed 3 kg refillable LPG cylinders along with a stove to the households under the scheme.
Challenges – Butane Market
· Groundwater contamination & strict environmental regulations
Groundwater contamination caused by methyl tert-butyl ether (MTBE) leakage will hinder market growth. In addition, the increasing popularity of ethanol as an alternative to gasoline may inhibit butane demand. The global butane market has to adhere to stringent regulatory norms because of high incidence of human health hazards due to the inhalation of this gas.
Implementation of strict mandates by the Environmental Protection Agency (EPA) regarding additives & fuels has led to a ban on the use of MTBE in gasoline blending. This is done as a means to manage the problem of groundwater contamination.
Market Landscape
Key Market Players:
The Top 5 companies in the Butane Market are:
- Exxon Mobil Corporation
- Sinopec Corp.
- BP PLC
- Chevron Phillips Chemical Company
- ConocoPhillips Company
Agreement/ Geographical Expansion
- In October 2023, ExxonMobil signed a preliminary agreement with Indian Oil Corporation to explore new models of delivering cost-effective natural gas in India.
- In August 2023, Chinese CNPC-led group discovered new oil field in South Sudan with more than 300 million barrels of recoverable oil.