Decarbonization services assist organizations and governments in reducing or neutralizing their carbon emissions. These services involve technical, policy-based and business model consulting solutions to help transition to a low-carbon economy. Consulting services such as carbon footprint assessment, emissions reduction program design and verification, and renewable energy strategy formulation are core decarbonization offerings. The increasing awareness about global warming and policy push for carbon neutral targets has spurred demand for decarbonization advisory and implementation projects. 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 companies provide multifaceted decarbonization solutions ranging from energy audits and carbon accounting to renewable project development.
Key opportunities in the decarbonization services domain include growing demand for clean energy transition advisories and policy roadmaps from industrial and commercial sectors. Developing countries with carbon reduction targets present a substantial market for overall program management services and clean technology integration projects.
Major service providers are focusing on global expansion through mergers and acquisitions to strengthen their technical expertise and geographical presence. Companies are also forming strategic partnerships with technology vendors and energy asset owners to offer turnkey decarbonization offerings across international markets.
Market drivers
Stringent government regulations: Growing number of countries have set carbon neutral targets to meet the Paris agreement goals which is driving the adoption of decarbonization strategies and services across sectors.
Growing environmental consciousness: Rising environmental degradation and climate change awareness among public and private organizations is fueling investments in greenhouse gas reduction projects.
Market restraints
High initial costs: Decarbonization strategies often require overhaul of existing fuel and technology infrastructure and transition to renewable energy which demands significant capital expenditure.
Lack of standardized framework: Absence of universal protocols for carbon accounting and program auditing has also hampered faster uptake of decarbonization advisory services, especially in developing nations.
Segment Analysis
The decarbonization service market is dominated by the carbon offsetting and trade sub segment. Organizations across industries are increasingly focusing on reducing their carbon footprint and achieving carbon neutrality targets. Carbon offsetting services help companies mitigate their carbon emissions by sponsoring offset projects like renewable energy plants and forestation drives. They also allow companies to purchase verified carbon credits that can be traded or retired to meet compliance requirements and voluntary carbon neutrality commitments.
The carbon accounting and management sub segment is also gaining traction in the decarbonization service market. As environmental reporting becomes mandatory in many countries, businesses are seeking consulting and software solutions to measure, monitor, report and reduce their greenhouse gas emissions. Carbon accounting services help organizations collect activity data, calculate emissions using established methodologies, and track emission reductions over time to validate emission reduction claims.
Global Analysis
The Asia Pacific region is expected to witness the fastest growth in the decarbonization service market during the forecast period. Stringent government regulations and policies regarding carbon emissions are being enforced in countries like China and India. At the same time, businesses in the region are facing mounting pressure from customers and investors to lower their carbon footprint. This is propelling the demand for different carbon reduction, offsetting and reporting services from consulting companies and clean technology providers. North America currently dominates the market owing to early adoption by organizations to transition to a low carbon economy and address stakeholder expectations regarding ESG performance.
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- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it