The decarbonization service market comprises services that help reduce carbon footprints across industries. These include carbon auditing, emissions reporting and sustainability consulting services. Decarbonization services help organizations understand where they emit greenhouse gases (GHGs) and how to lower emissions to achieve long-term decarbonization goals. With advancements in carbon capture, utilization and storage (CCUS) technologies, it has become possible to capture carbon emissions from large industrial facilities and utilize or store the captured carbon. The Global decarbonization service market is estimated to be valued at US$ 69.73 Bn in 2024 and is expected to exhibit a CAGR of 12.% over the forecast period 2023 to 2030.
Key Takeaways
Key players operating in the decarbonization service market are Schneider Electric, ENGIE, Siemens, AECOM, EDF, Johnson Controls, DNV, Honeywell International Inc., Carbon Clean Solutions Limited, The ERM International Group Limited, CarbonCure Technologies Inc., Ørsted A/S, and ABB. These players provide a range of services including carbon footprint assessment, carbon offsetting, renewable energy solutions, energy efficiency upgrades, and climate strategy development.
The increasing focus on reducing emissions to achieve carbon neutrality targets represents a key opportunity in the market. Many countries and organizations have pledged to achieve net-zero emissions by 2050 or earlier. This drives demand for decarbonization solutions and services. Technological advancements are also being made in carbon accounting methodologies and tools to accurately assess emissions. New and improved CCUS technologies make it possible to capture more carbon economically.
Market drivers
Stringent government regulations and policies related to emission reductions are a major market driver. Countries around the world have implemented carbon pricing mechanisms and set hard limits on GHG emissions from industries. Companies need to cut emissions deeply to remain compliant with regulations. Growing climate change concerns are also driving more organizations to commit to science-based decarbonization targets voluntarily. Investor pressure on industries to reduce their carbon footprint and transition to clean energy is another key factor propelling the demand for decarbonization services.
Challenges in the Decarbonization Service Market
The decarbonization service market faces various challenges due to the complex nature and mass scale of transition required. One of the major challenges is the high upfront cost associated with decarbonization projects. Retrofitting existing infrastructure and shifting to renewable energy sources requires huge capital investments. Projects also face technical challenges due to the involvement of multiple stakeholders and integration of advanced technologies. Behavioral changes at individual and organizational levels are difficult to drive which affects the demand for decarbonization services. further, lack of supportive policies and low carbon pricing in some regions pose regulatory challenges.
SWOT ANALYSIS
Strength: The decarbonization service market is driven by stringent government regulations and policies pertaining to emission cuts. Several companies have diversified service portfolios and technological expertise to enable decarbonization.
Weakness: Higher dependence on policy support and subsidies. Rising input costs can squeeze margins for service providers.
Opportunity: Growing global focus on tackling climate change increases the scope and opportunities for decarbonization service providers. Emerging technologies in areas of green hydrogen, carbon capture will open new growth avenues.
Threats: Slow adoption rates in developing nations. Geopolitical risks and changes in trade policies can hamper global collaborations and investments.
Geographical regions with high market concentration
Europe accounts for the largest market share currently due to stringent emission norms and supportive policy frameworks in countries like Germany, UK, France etc. The region is estimated to deploy large-scale decarbonization programs across power, industrial and building sectors over the coming decade.
Fastest growing region
The Asia Pacific region is projected to witness the highest CAGR during the forecast period. Rapid industrialization and urbanization in countries like China, India creates strong demand for decarbonization services to transition workflows. Supportive government initiatives and investments to meet carbon neutrality goals will propel the regional market.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
