May 22, 2024

Decarbonization Service Market Is Estimated to Witness High Growth Owing to Emerging Carbon Accounting Technologies

Decarbonization services refer to technical and advisory solutions that help assess and reduce carbon emissions from buildings, utilities, and industrial operations. Services such as carbon auditing, carbon management consulting, and design of emission reduction roadmaps are gaining immense significance as organizations focus on lowering their carbon footprint and transitioning to more sustainable operations. Technical advances in areas like Internet of Things (IoT), cloud computing, and AI are enabling more accurate measurement and analysis of carbon data, aiding the decarbonization process.

The Global Decarbonization Service Market is estimated to be valued at US$ 69.73 Bn in 2023 and is expected to exhibit a CAGR of 12.30% over the forecast period 2023-2030.

Key Takeaways
Key players operating in the decarbonization service market are Schneider Electric, ENGIE, Siemens, AECOM, EDF, and Johnson Controls.

The market offers several growth opportunities, including increasing demand from industrial facilities and infrastructure projects to meet climate targets. Adoption is also being driven by government policies and regulations mandating emission reporting and carbon neutrality goals.

Emerging carbon accounting technologies are supporting more granular carbon footprint measurement and scenario modeling capabilities. IoT sensors, remote monitoring, and AI are assisting in compilation and analysis of emissions data at an unprecedented scale and detail. This is helping organizations devise targeted decarbonization roadmaps.

Market Drivers
Stringent emission norms and carbon pricing mechanisms by regulatory bodies across major countries are compelling industries and commercial buildings to assess and lower their carbon footprint, spurring demand for decarbonization consulting and solutions. Investments in clean energy transitions and energy efficiency upgrades of utilities and infrastructure are also propelling the need for technical expertise in project management, measurement and verification. Adoption is further accelerated by the availability of carbon credits and incentives for emission reduction efforts.

Challenges
The decarbonization service market is still in nascent stage and facing various challenges to achieve expected growth rates. Adapting clean energy and decarbonization at scale requires huge investments and developing complex infrastructure which increases project costs. Changing consumer behavior and mindset shifting from fossil fuel based systems also poses difficulty for market players. Data management and integrating different energy sources is a major technical challenge for decarbonization projects. Measuring and reporting carbon footprint accurately to comply with global climate policies needs improvements. Policy and regulatory frameworks around the world are diversifying which leads to compliance issues for international decarbonization service providers.

SWOT Analysis
Strength: The market is driven by stringent government regulations and policies around the world for carbon emission reductions. This ensures long term demand for decarbonization services.
Opportunities: Rapid urbanization and focus on smart city developments opens new growth avenues. Integrating renewable energy, energy storage and electric mobility foster innovation and collaboration between stakeholders.
Weakness: Huge initial investments and long payback periods discourage early adopters. Technical capabilities are still evolving to deliver decarbonization at scale.
Threats: Uncertainties over policy support and funding if political priorities change. Competition intensifying from in-house decarbonization efforts of large corporates.

Geographical Regions
Europe accounts for the largest share in the decarbonization service market currently in terms of value. This is due to stringent climate targets and carbon pricing mechanisms enforced by EU. Countries like UK, Germany, France are major European markets.

Asia Pacific region is projected to witness fastest growth during the forecast period for decarbonization service market. Growing industrialization and energy needs coupled with focus on renewable energy in China, India and Southeast Asian markets will drive future demand. Initiatives like clean energy corridor projects in India and renewable portfolio targets in China and Japan are opportunities.

*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it