Europe Liquified Petroleum Market

The Europe Liquefied Petroleum Gas (LPG) market is witnessing steady growth, driven by rising residential and commercial demand for LPG as a clean, efficient heating and cooking fuel, along with its expanding use in the autogas and transportation sector. Additionally, increasing adoption of LPG in industrial applications such as metal processing, food production, and chemical manufacturing continues to support market expansion. However, the market faces challenges from price volatility and supply uncertainty, influenced by fluctuations in global oil and gas markets and geopolitical factors. Despite these restraints, the ongoing transition towards clean and green energy sources presents significant opportunities for the market, particularly with the advancement of renewable LPG (BioLPG) solutions and innovations in LPG storage, distribution, and micro-cogeneration technologies, which are helping position LPG as a flexible, lower-carbon option within Europe’s evolving energy landscape. FIGURE 3 EUROPE LIQUIFIED PETROLEUM GAS (LPG) MARKET: MARKET GROWTH FACTOR ANALYSIS (2019- 2035) Impact Type Impact Analysis Index Market Factors Base (2024) 2019–2022 2023–2024 2025–2035 Growth Inhibiting Factor MACRO FACTORS Growth Promoting Factor Price Volatility and Supply Uncertainty Growth Steading Factor Growing Residential and Commercial LPG Demand Note: Expanding Use of LPG in Autogas ➢ The Impact indicated the measure of and Transportation influence on market growth Increasing LPG Use in Industrial ➢ Each Factor is graded based on historic Applications impact and estimated influence on the market. Transition Towards Clean and Green Energy Sources MICRO FACTORS Research & Development Supply Chain Disruptions Source: MRFR Analysis Copyright © 2025 Market Research Future 41

4.2.1 GROWING RESIDENTIAL AND COMMERCIAL LPG DEMAND The rising demand for Liquefied Petroleum Gas (LPG) in residential and commercial sectors is one of the primary drivers for the European LPG market. In residential applications, LPG is widely used for cooking, heating, and hot water supply, particularly in rural and off-grid areas where access to piped natural gas infrastructure remains limited. Many countries in Southern and Eastern Europe, such as Greece, Portugal, Poland, and parts of the Balkans, rely heavily on LPG as a convenient and cleaner-burning alternative to traditional solid fuels like coal and firewood. As governments push for improved air quality and lower carbon emissions, households are increasingly adopting LPG over more polluting fuels. In the commercial segment, LPG finds extensive usage in hotels, restaurants, hospitals, schools, and small industries for space heating, water heating, and cooking applications. The hospitality and food service sectors, in particular, prefer LPG for its high calorific value, quick heating capability, and reliable supply. As tourism rebounds across Europe is post-pandemic and with growing investments in commercial infrastructure and services, the demand for LPG in these sectors is projected to maintain a steady upward trajectory. Additionally, small and medium enterprises (SMEs) in light manufacturing and agro-based industries in rural areas use LPG for heating, drying, and other energy-intensive operations. Moreover, Europe’s ambitious energy transition agenda, targeting a reduction in coal and oil-based energy consumption, is indirectly boosting LPG consumption. While renewable energy adoption is increasing, LPG serves as a cleaner bridging fuel in both residential and commercial sectors, especially in regions where grid reliability and renewable infrastructure remain underdeveloped. This role is particularly visible during peak demand in winter months when heating needs surge, and LPG provides a dependable and scalable energy solution. To support this growing demand, several European countries are modernizing their LPG distribution networks and expanding cylinder exchange programs, mobile filling stations, and bulk storage facilities. Major LPG suppliers like SHV Energy, UGI International, and Rubis Energie are actively investing in expanding their supply chain capacities, improving logistics efficiencies, and promoting LPG as a transitional clean energy source. These developments not only enhance supply security but also stimulate consumption in previously under-served residential and commercial markets across Europe. Copyright © 2025 Market Research Future 42 4.2.2 EXPANDING USE OF LPG IN AUTOGAS AND TRANSPORTATION The growing adoption of LPG as transportation fuel (commonly known as Autogas) is a significant driver for the European Liquefied Petroleum Gas (LPG) market. Autogas is widely regarded as an economical, lower-emission alternative to conventional fuels like petrol and diesel. Across several European countries — notably Turkey, Poland, Italy, the Netherlands, and Bulgaria — LPG-powered vehicles account for a substantial share of the automotive market. As concerns over urban air quality and carbon emissions intensify, policymakers are promoting cleaner alternative fuels, positioning Autogas as an immediate, scalable solution for both private and commercial vehicles. FIGURE 4 EUROPEAN NUMBER OF LPG PASSENGER CARS BY COUNTRY IN 2023 (IN UNITS) EUROPEAN NUMBER OF LPG PASSENGER CARS BY COUNTRY IN 2023 (IN UNITS) 4000000.00 3522059.00 2958577.00 3000000.00 2000000.00 348366.00 135086.00 65382.00 22332.00 1000000.00 307208.00 82790.00 62851.81 20202.00 0.00 One of the key advantages driving Autogas adoption is its lower fuel cost and reduced tax rates compared to petrol and diesel in most European countries. This economic benefit makes LPG particularly attractive for high-mileage vehicle operators, such as taxis, delivery vans, ride-share fleets, and public transportation providers. Additionally, modern dual-fuel vehicles, capable of operating on both petrol and LPG, offer flexibility and extended range, further encouraging uptake among private motorists and fleet operators alike. From an environmental standpoint, Autogas emits up to 20% less CO₂ and substantially lower nitrogen oxides (NOx) and particulate matter (PM) than diesel vehicles, contributing to improved urban air quality. With several European cities enforcing low-emission zones (LEZs) and considering restrictions on older, polluting diesel vehicles, Autogas provides a practical, lower-emission alternative without the higher upfront costs associated with electric vehicles. This is particularly relevant for markets in Southern and Eastern Europe, where electric vehicle infrastructure remains limited, and consumers seek cost-effective, cleaner fuel options. To support this expanding market, Europe has developed one of the world’s most extensive Autogas refueling infrastructures, with over 30,000 LPG filling stations across the continent. Industry players, including SHV Energy, UGI International, and TotalEnergies, continue to invest in upgrading refueling networks and promoting the benefits of LPG vehicles. Furthermore, several governments offer incentives, subsidies, and tax rebates for Autogas vehicle conversions and purchases, further accelerating market growth. This expanding transportation application is expected to sustain robust LPG demand in Europe over the coming years, reinforcing its position as a key transitional fuel in the region’s mobility sector. Copyright © 2025 Market Research Future 43 4.2.3 INCREASING LPG USE IN INDUSTRIAL APPLICATIONS The expanding use of Liquefied Petroleum Gas (LPG) in industrial applications is playing a pivotal role in driving demand for LPG across Europe. LPG’s versatility, high calorific value, an

4.4.1 TRANSITION TOWARDS CLEAN AND GREEN ENERGY SOURCES Europe’s ongoing transition toward clean and sustainable energy systems presents a unique opportunity for the Liquefied Petroleum Gas (LPG) market. While LPG is a fossil fuel, it is significantly cleaner-burning than coal, heavy fuel oil, and diesel, emitting lower levels of CO₂, nitrogen oxides (NOx), sulfur oxides (SOx), and particulate matter. As governments across Europe tighten emissions standards and phase out highly polluting fuels in residential, industrial, and transport sectors, LPG is increasingly positioned as a transitional, lower-carbon alternative that can bridge the gap until renewable technologies and infrastructure are fully deployed. In particular, LPG can play a vital role in off-grid and rural areas, where access to piped natural gas and reliable electricity supply remains limited. These regions, especially in parts of Southern and Eastern Europe, still rely heavily on coal, wood, and heating oil for domestic heating and cooking. The switch to LPG offers immediate benefits in terms of reduced local air pollution, improved indoor air quality, and lower greenhouse gas emissions, while supporting broader national and EU-level climate targets. This aligns with Europe’s ‘just transition’ policies, which seek to ensure that rural and economically disadvantaged communities are not left behind in the shift to cleaner energy. An additional opportunity lies in the development and adoption of bioLPG (renewable LPG), which is chemically identical to conventional LPG but produced from renewable feedstocks such as waste vegetable oils, animal fats, and bio-based materials. BioLPG can be blended with or directly replace fossil-based LPG in existing infrastructure and appliances without modification. Several leading energy companies in Europe, including SHV Energy and UGI International, have already launched bioLPG initiatives, and growing demand for low-carbon fuels is expected to accelerate its production and use in the coming years. Moreover, as industries and commercial enterprises seek to decarbonize their heating and process energy systems while maintaining operational reliability, LPG offers a cleaner interim solution alongside electrification and renewable heat technologies. It can serve as a backup or complementary energy source to intermittent renewables like solar and wind, particularly in high-demand industrial processes and commercial heating applications. This strategic role positions LPG as a valuable component of Europe’s evolving, diversified energy mix during the clean energy transition period. 4.4.2 ADVANCEMENTS IN LPG TECHNOLOGIES The ongoing technological advancements in LPG systems, appliances, and infrastructure are creating valuable growth opportunities for the European Liquefied Petroleum Gas (LPG) market. Innovations in high-efficiency LPG boilers, hybrid heating systems, low- emission combustion technologies, and advanced Autogas vehicle conversions are making LPG solutions cleaner, safer, and more cost-effective. These developments are not only enhancing the operational performance and energy efficiency of LPG applications but are also expanding its competitiveness as a transitional energy source in Europe’s decarboni ing energy landscape. One significant area of progress is the introduction of condensing LPG boilers and hybrid heating systems that integrate LPG with renewable technologies like solar thermal panels and air-source heat pumps. These integrated systems allow residential and commercial users to achieve higher seasonal energy efficiencies while lowering overall CO₂ emissions. Several European countries, including the UK, Ireland, France, and Germany, are promoting hybrid LPG systems in off-grid areas as an alternative to outdated, polluting oil and coal heating systems — offering a lower-carbon, flexible, and scalable solution in line with EU energy transition objectives. Copyright © 2025 Market Research Future 48 Advancements in Autogas vehicle technology are also contributing to the sector’s growth prospects. Modern LPG fuel injection systems, dual-fuel engine designs, and onboard telematics for optimized fuel management have improved the performance, reliability, and emissions profile of LPG-powered vehicles. With over 15 million LPG vehicles already on Europe’s roads, these technology upgrades are helping extend the lifespan and efficiency of the existing fleet while attracting new demand from commercial operators, taxis, and ride-sharing services seeking cost-effective low-emission mobility solutions. Furthermore, developments in LPG storage, distribution, and monitoring infrastructure are enhancing supply security, safety, and operational efficiency. The use of smart metering, automated tank level monitoring, telemetry systems, and modular storage solutions is transforming how LPG is managed in residential, commercial, and industrial applications. These innovations reduce operational costs, minimize supply disruptions, and improve customer service — positioning LPG as a modern, reliable energy option within Europe’s increasingly digital and sustainability-focused energy market. Collectively, these technological advancements are expected to play a pivotal role in maintaining and expanding LPG’s relevance as Europe transitions toward a cleaner, more diversified energy mix.

4.3.1 PRICE VOLATILITY AND SUPPLY UNCERTAINTY One of the major challenges restraining the growth of the European Liquefied Petroleum Gas (LPG) market is the inherent price volatility associated with global oil and gas markets. As a petroleum derivative, LPG prices are closely tied to fluctuations in crude oil and natural gas prices, which are influenced by a wide range of geopolitical, economic, and seasonal factors. In recent years, supply disruptions due to geopolitical tensions — such as the Russia-Ukraine conflict and instability in the Middle East — have caused sharp spikes and irregularities in European LPG prices, making it difficult for both residential and industrial users to forecast fuel costs accurately. FIGURE 7 NATURAL GAS COMMODITY PRICES IN EUROPE FROM 2019 TO 2024 (IN U.S. DOLLARS PER MILLION BRITISH THERMAL UNITS) Natural gas commodity prices in Europe from 2019 to 2024 (in U.S. dollars per million British thermal units) 50 40 30 20 40.3 10 4.8 16.1 0 3.2 13.1 2019 11 2020 2021 2022 2023 2024 This volatility particularly affects price-sensitive sectors such as transportation, agriculture, and small-scale industries, where fuel costs constitute a significant portion of operating expenses. Sudden price increases can deter businesses and consumers from committing to long-term LPG contracts or investments in LPG-powered equipment and infrastructure. Additionally, fluctuating prices undermine LPG’s competitive advantage over alternative fuels like natural gas and electricity, which benefit from more stable, regulated pricing structures in many European markets. Another contributing factor to supply uncertainty is Europe’s dependence on LPG imports. While domestic production exists, a substantial portion of Europe’s LPG demand is met through imports from regions like the United States, North Africa, and the Middle East. Disruptions in global shipping routes, sanctions, or production cuts in exporting countries can quickly lead to localized shortages and logistical bottlenecks. The recent volatility in shipping costs and energy commodity prices following the pandemic and regional conflicts has exposed the vulnerability of Europe’s LPG supply chain. Furthermore, the growing emphasis on renewable energy sources and electrification policies across Europe is adding a layer of regulatory uncertainty to the LPG market. While LPG is cleaner than coal and oil, it remains a fossil fuel, and future environmental regulations could impose stricter limitations or taxes on its usage. This policy risk, combined with supply and price unpredictability, Copyright © 2025 Market Research Future 46 may deter potential industrial and commercial users from increasing their reliance on LPG, acting as a brake on market expansion in certain regions and applications. FIGURE 8 CHALLENGE IMPACT ANALYSIS (2024-2035) Restraint 1 Price Volatility and Supply Uncertainty Restraint 5 Restraint 2 Infrastructure Limitations in Certain Markets Competition from Natural Gas & Renewable Alternatives Restraint 4 Restraint 3 Supply Chain Disruptions Stringent Environmental Regulations on Emissions Note: The Impact indicated the measure of influence on market growth. Copyright © 2025 Market Research Future 47