Renewable Propane and the Uncertain U.S. Trade Picture

Written on: April 28, 2025

How will conventional and renewable propane be affected by new tariffs?

In recent weeks, one of the hottest topics of conversation has been the price of products that the United States imports from other countries. As we look for clarity on what tariff level will be imposed on various trading partners — and what that will mean for the cost of living in the U.S. — it’s worth considering the impact our current economic environment will have on conventional and renewable propane.

In this article, we’ll discuss how the production and distribution pipelines of low-carbon liquid gases affect the prices that households and businesses pay.

Where Does the U.S.’s Propane Come From?

Almost all the conventional propane used in the U.S. comes from within our borders. On any given day, we are producing roughly 25 times more propane than we are importing. The propane we are importing comes overwhelmingly from Canada.

Most of the propane we use (roughly three-quarters) is a co-product of natural gas production. A considerably smaller portion of conventional propane comes as part of the oil refining process.

Then, of course, there is the growing presence of renewable propane gas (rPG) and other low-carbon, renewable liquid gases, including renewable dimethyl ether (rDME). These products can either be used in place of conventional propane or blended with it.

Will Tariffs Impact America’s Propane Prices?

This is a complex question, but by and large, we can expect American propane to stay mostly stable. The reasons for this stability are as follows:

Most of our propane is U.S.-produced and, therefore, unaffected by tariffs on imports.
As of this writing, tariffs on Canadian energy products have been paused. There is the possibility that these could go into effect later.

There’s a fair amount of uncertainty about where tariff levels will ultimately end up. Some good news is that, in February, the National Propane Gas Association (NPGA) and the Canadian Propane Association made a joint statement promising to work with each other and their respective government to “ensure that our citizens continue to have access to affordable and reliable energy.”

It’s worth noting that a more pressing concern for increasing propane prices is electrification-related regulations at the state and local level, which will have the effect (often by design) of artificially inflating costs.

Renewable Propane — a U.S.-Based Process

From a production and distribution perspective, renewable propane offers a decarbonization solution that isn’t largely reliant on foreign supply chains. The feedstocks for this sustainable low-carbon fuels — including plant oils, municipal waste, restaurant grease and woody biomass — come almost entirely from within our borders. And rPG has a U.S.-based supply network. Even the rPG that the U.S. is shipping to Canada is currently unaffected by tariffs.

Long story short: we have a robust (and growing) domestic supply chain for renewable propane that is generally insulated from trade policy-related cost increases.

Compare this to mandated conversions of home heating to electric heat pumps. Heating and cooling companies are already warning of price increases as a result of the increased tariffs on China and several other U.S. trading partners. These tariffs are likely to increase the cost of imported heat pumps and will also impact domestically-built systems, which rely on compressors, electronic components and refrigerants from China and other foreign suppliers. In the months ahead, electrification mandates could end up being the most expensive carbon-reduction strategy for U.S. households.

In today’s trade and regulatory environment, renewable propane and comparable sustainable liquid fuels represent an increasingly effective and financially attractive green energy solution. Stay in the know by joining the Renewable Propane Alliance.