February 21, 2024

Decarbonization Service Market is Anticipated to Witness High Growth Owing to Growing Demand for Low Carbon Solutions

The decarbonization service market is a growing industry focused on developing and implementing solutions to reduce carbon emissions across various industries and sectors. Decarbonization services help assess an organization’s carbon footprint and develop customized roadmaps and strategies to transition to cleaner energy sources and integrate low carbon technologies. This allows companies to lower their environmental impact and meet sustainability targets through carbon monitoring, reporting, offsetting, and certification. Key services offered include carbon accounting and reporting, carbon risk assessment, carbon offset advisory, climate strategy development and implementation. With stringent emission norms and regulations coupled with rising demand for cost-effective low carbon solutions, the global decarbonization service market is estimated to be valued at US$ 126.23 Bn in 2030 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, Johnson Controls. These companies offer comprehensive carbon management and low carbon transition services to large industrial and commercial clients across various industries globally.

There are significant opportunities for decarbonization service providers to help organizations meet emerging carbon neutrality goals through innovative digital solutions, carbon avoidance projects, and renewable energy integration advisory. For example, developing scalable IT platforms for real-time carbon tracking and predictive analytics to simulate decarbonization pathways.

Major decarbonization service providers are also expanding globally through partnerships and acquisitions to capture the growing demand. For instance, ENGIE acquired ECCO2 in 2019 to strengthen its carbon offset capabilities in Australia. In 2021, Schneider Electric launched an open ecosystem alliance to accelerate decarbonization and energy efficiency solutions for its clients across 150+ countries.

Market drivers
One of the key drivers for growth in the decarbonization service market is the implementation of carbon taxes and emissions trading schemes by governments worldwide. This incentivizes industries and businesses to reduce emissions and invest in low carbon solutions and transition advisory to minimize compliance costs. Rising carbon tax rates will continue to boost demand for decarbonization roadmaps and services that help maximize cost savings through optimized carbon reductions.

Market restrain
High initial costs of implementing customized decarbonization programs and transitioning to cleaner technologies act as a key restraint for widespread adoption of decarbonization services. Developing detailed carbon abatement plans and integrating emissions monitoring systems requires significant upfront capital investments, which small and medium organizations may not be able to readily afford. This poses challenges for decarbonization service providers to scale their client base.

Segment Analysis
The decarbonization service market is dominated by the carbon footprint measurement and reduction segment. This segment accounts for over 35% of the total market share as most organizations are focusing on reducing their carbon footprint and becoming carbon neutral. Measuring carbon footprint is the first step towards decarbonization goals and targets. This segment offers services like calculating scope 1, 2 and 3 emissions, developing a customized strategy to reduce emissions based on an organization’s activities and processes.

Global Analysis
The European region holds the largest share in the decarbonization service market and is expected to witness the fastest growth during the forecast period. This is mainly due to stringent government policies and regulations towards reducing carbon emissions. Countries like Germany, France and UK have committed to becoming carbon neutral by 2050 and have implemented carbon pricing mechanisms that have boosted adoption of decarbonization services across industries. The presence of leading decarbonization consulting companies and increasing focus of organizations in this region towards sustainability are fueling market growth. The Asia Pacific region is also expected to offer lucrative opportunities owing to rapid industrialization and economic growth in major countries like China and India.

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