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The decarbonization service market is witnessing considerable growth driven by rising adoption of decarbonized energy solutions. Decarbonization services help assess carbon footprint and develop customized plans for transitioning to clean energy through interventions like energy efficiency upgrades, switching to renewable power, electrification of processes, and carbon offsetting. Companies offering decarbonization services help organizations understand their carbon emissions, set science-based emission reduction targets, and implement strategies to achieve net-zero goals over time through monitoring and reporting enabled by robust digital tools and platforms.
The Global Decarbonization Service Market is estimated to be valued at US$ 109.63 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. Schneider Electric and ENGIE dominate the market with their end-to-end decarbonization solutions encompassing energy procurement, asset management, digitalization, and financing support for transitioning clients to a low-carbon future.
The growing demand for clean energy and stringent emission norms by governments globally are fueling demand for decarbonization services. Organizations across industries want to build resilience, manage transition risks, and gain a competitive edge by reducing their carbon footprint through outsourcing decarbonization strategies to expert consultants and solution providers.
Major players are expanding globally through strategic partnerships and acquisitions to leverage market opportunities arising from countries committed to achieving net-zero emissions by mid-century. The decarbonization market is expected to witness high growth in developed economies and regions that recently announced net-zero targets like China and the European Union.
Market Key Trends
Carbon accounting and target setting are emerging as key trends in the decarbonization service industry. Advanced carbon accounting methodologies and tools are being used by service providers to map emission sources, devise science-based targets, track progress, and optimize abatement strategies. Companies now need credible carbon data and independently verified targets to convince stakeholders of their climate commitments and actions. This is driving increased adoption of carbon accounting and target setting solutions.
Porter’s Analysis
Threat of new entrants: Decarbonization services require specialized knowledge, expertise, financial resources and established networks to operate at scale limiting entry of new players.
Bargaining power of buyers: Large industrial and commercial buyers have significant bargaining power to negotiate on pricing and customized contract terms with decarbonization service providers.
Bargaining power of suppliers: Consultants and technology providers forming a tight-knit ecosystem have moderate bargaining power over service providers due to differentiated offerings and solutions.
Threat of new substitutes: Alternative decarbonization approaches and offset-based solutions pose minimal threat as a direct substitution due to their limited ability to deliver deep emission cuts at site-level.
Competitive rivalry: Intense competition among established players to gain market share and preferred partner status with targeted customer segments.
The decarbonization service market in Europe accounts for over 40% of the global market value, mainly concentrated in Western European countries including Germany, UK, France and Nordic nations. These countries have economies dominated by industries like manufacturing, aviation, shipping where carbon emissions abatement holds importance. Asia Pacific region is emerging as the fastest growing market for decarbonization services with countries like China, India, Japan, South Korea aggressively supporting low-carbon transition of their industries through policy push and funding. Rising carbon prices in these regions make emission reduction economically attractive.
*Note:
- Source: Coherent Market Insights, Public sources, Desk research
- We have leveraged AI tools to mine information and compile it
