The Global Bio LPG Market is valued at US$ 1.18 billion in 2025 and is projected to reach US$ 26.52 billion by 2034, expanding at a CAGR of 41.36% from 2025 to 2034. The market is gaining momentum as governments, energy companies, and consumers increasingly shift toward renewable and lower-carbon fuel alternatives.

Bio LPG Market Overview

Bio LPG is a renewable form of liquefied petroleum gas produced from renewable diesel (HVO), sustainable aviation fuel (SAF), and other biomass conversion technologies. Feedstocks can include used cooking oil, vegetable oils, animal fats, and agricultural waste.

Bio LPG has the same chemical composition as conventional LPG, allowing it to use existing LPG distribution infrastructure and equipment. This compatibility can support the transition toward lower-carbon energy without requiring major changes to existing LPG systems.

For example, on May 13, 2026, SHV Energy entered into a long-term agreement with Neste Oyj to increase the production and supply of renewable Bio LPG across Europe. The development reflects growing efforts to expand renewable LPG availability through existing distribution networks.

Key Factors Driving the Bio LPG Market

The increasing development of renewable diesel and sustainable aviation fuel facilities is creating opportunities for Bio LPG because it can be produced as a co-product of the hydrotreatment process.

The market is also supported by:

• Growing demand for renewable fuels
• Increasing decarbonization initiatives
• Expansion of renewable diesel production
• Availability of waste-based feedstocks
• Compatibility with existing LPG infrastructure
• Growing demand from residential, commercial, industrial, and transportation users

North America Bio LPG Market

North America is an important market for Bio LPG due to the expansion of renewable diesel and SAF production capacity. Increasing investment in renewable fuel refineries can contribute to greater availability of Bio LPG while supporting decarbonization across multiple sectors.

According to the information provided, U.S. renewable diesel production capacity surpassed 5 billion gallons per year in 2025.

On June 3, 2026, Phillips 66 announced an expansion of renewable fuel production at its Rodeo Renewable Energy Complex in California. The facility is designed to produce approximately 800 million gallons of renewable fuels annually, creating potential opportunities for additional Bio LPG production as a co-product.

Bio LPG Market Segmentation

The market is segmented by:

• Feedstock
• Production Technology
• Source
• End User

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Source: RNP Market Research