The decarbonization service market involves consulting, auditing, certification, and verification services that help organizations assess and reduce their carbon footprint. These services entail analyzing an entity’s energy consumption patterns, procurement of materials and resources, manufacturing and supply chain processes, product usage and disposal, and other activities to identify emission sources. Service providers then recommend targeted solutions and strategies to switch to renewable energy, improve energy efficiency, adopt cleaner transportation, develop low-carbon products and supply chains, and sequester carbon through reforestation or carbon capture technologies.
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.
The decarbonization service market is expected to witness significant opportunities in evolving regulatory frameworks around the world mandating net-zero emission targets for industries, organizations, and nations. Many countries have committed to achieve carbon neutrality by 2050, driving greater demand for specialized consulting and auditing services.
Rising investments in renewable energy infrastructure, carbon removal technologies like Direct Air Capture, and deployment of Industrial IoT solutions for energy monitoring and management are some key technological advancements boosting the decarbonization service market.
Market drivers
Stringent government regulations and policies towards lowering corporate and country-level carbon footprint are a major driver for the decarbonization service market. Growing consumer awareness about climate change and preference for brands with greener credentials are forcing organizations to focus on sustainability and transition to low-carbon business models. Increased disclosure norms requiring companies to report Scope 1, 2 and 3 emissions are also propelling the need for decarbonization advisory services. Commitments made by large multinational conglomerates to achieve net-zero emissions add further momentum to the demand for specialized decarbonization solutions and consulting.
Current Challenges in Decarbonization Service Market
The decarbonization service market is still at a nascent stage and facing many challenges. Limited awareness among end-users about the benefits of decarbonization services is one of the major challenges. Many organizations are still unaware of the various decarbonization techniques and tools available. Lack of expertise is another challenge as not many service providers have skilled workforce who can effectively implement decarbonization solutions. High initial setup and deployment cost of various decarbonization technologies like carbon capture, utilization and storage (CCUS) systems is restricting its adoption. Issues related to data privacy and security with technologies like IoT solutions for monitoring carbon footprint is also hindering the growth of this market.
SWOT Analysis
Strength: The decarbonization service market is driven by stringent government regulations and policies for reducing carbon emissions. Growing awareness about climate change and its impact is also favoring the adoption of decarbonization solutions.
Weakness: Dependence on government incentives and subsidies for promoting decarbonization projects. Lack of global standards for certifying carbon credits.
Opportunity: Increasing investments by organizations towards achieving net-zero targets by 2050. Growing demand for renewable energy will provide opportunities for integrating CCUS and other decarbonization technologies.
Threats: Economic uncertainty and challenges due to COVID-19 pandemic is restricting capex spending on decarbonization projects. Trade barriers and geopolitical tensions can impact global cooperation on climate action.
Geographical Regions with Highest Market Value
Currently, the Europe region dominates the decarbonization service market in terms of value, owing to stringent emission norms and active government support through funding and incentives. The region accounts for over 35% share of the global market. North America is another major region driven by government initiatives like the US rejoining the Paris climate agreement. The Asia Pacific region is expected to offer lucrative opportunities during the forecast period supported by China’s carbon commitments and initiatives in other countries.
Fastest Growing Geographical Region
The Asia Pacific region is poised to witness the fastest growth in the decarbonization service market during 2023-2030. This is mainly attributed to the growing energy demand in developing economies like China and India necessitating the adoption of low-carbon technologies. Government commitments towards net-zero emissions and investments in renewables also favor the market growth. Initiatives like the International Solar Alliance are further driving the adoption of decarbonization solutions in various industry verticals across the region.
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- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it