The global decarbonization market is projected to rise at a compound annual growth rate (CAGR) of 16.74% to reach a total value of US$45.767 billion by 2029 from US$15.489 billion in 2022.
Decarbonization is a term used for the removal or reduction of carbon dioxide (CO2) output in the atmosphere. The word aims at reducing the emission of carbon from day-to-day human activities and eventually to eliminate carbon. Decarbonization gained popularity after the Paris Agreement in 2015, was the ambition was to limit global warming to well below 2 degrees Celsius above pre-industrial level and to make efforts to limit it to 1.5 degrees Celsius and ultimately to achieve carbon neutrality by 2050. Many governments and companies have shared the imperative to limit global warming, and many companies including energy, power, and transport have publicly declared intentions to achieve carbon neutrality by 2050.
The escalating demand for a carbon-neutral economy by the government is expected to have a positive impact on the market in the projected period. For instance, the Ministry of Environment, Forest and Climate Change of India, at the 26th session of the United States Framework Convention on Climate Change in November 2021, announced that the country aims to achieve carbon neutrality by 2070. Additionally, government regulations, and policies are expected to impact the market. Incentives such as subsidies, stringent emissions, and tax credits are anticipated to have a positive impact on market growth.
Companies are coming up with new and innovative products that can reduce carbon emissions. For instance, conventional cement is very polluting and leads to high carbon emissions, hence in order to reduce its carbon footprint by 80% by 2050, Hoffmann Green has launched three new generations of low-carbon cement with 0% clinker. The company’s cement will contribute to a significant reduction in the carbon footprint in the coming years. Hence, the launch of such products that can reduce carbon emissions is expected to have a positive impact on the market.
Companies and consumers are becoming aware of the effects of carbon on the environment, and are taking new and innovative steps to tackle this. For instance, in August 2022, Braskem launched bio-based plastic from sugarcane in Brazil. The bio-based plastic can go a long way and can be recycled easily. This bioplastic will be used for consumer goods packaging. Hence, such awareness about using packaging solutions is expected to boost the market in the coming years.
Both developed and developing countries are investing heavily in decarbonization as governments realize this is a major issue. For instance, in March 2023, the U.S. Department of Energy’s (DOE) Office of Energy Efficiency and Renewable Energy announced an investment of US$156 million funding for advancing high-impact applied research, development, and demonstration projects for reducing carbon emission across the United States Industrial estate. The FAO, led by EERE’s Industrial Efficiency and Decarbonization Office (IEDO) will drive the technology and innovation for developing next-generation technologies for decarbonizing industries.
Increasing funding and investment in green infrastructure projects such as energy storage, smart grids, and sustainable transport are expected to have a positive impact on the decarbonization market. Additionally, renewable sources such as solar energy, and wind energy are expected to replace fossil fuels as a result of advancing technologies. Hence, such interest and advancement in the market are anticipated to propel market growth in the coming years.
The North American region is expected to hold a significant share, owing to rising concerns about climate change in countries like the United States, and Canada. Additionally, the rising awareness among companies and major companies aiming to achieve carbon neutrality is propelling market growth in the coming years.
Furthermore, the increasing interest of the government in clean energy coupled with rising investment in reducing global warming is one of the major reasons boosting the market growth. For instance, in March 2024, as a part of Biden’s Investing America Agenda, the Department of Energy in the United States announced an investment of US$6 billion for 33 projects across more than 20 states to decarbonize energy-intensive industries and reduce greenhouse gas emissions. Hence such increasing awareness about environmental protection and increasing investment in various projects in the region are expected to boost the market growth in the coming years.
Asia Pacific is anticipated to grow with prominent CAGR in the forecasted period, owing to expanding installation and use of solar energy in countries such as China, and India coupled with rising demand for renewable energy. Additionally, various countries such as Japan, and Australia are investing heavily in projects for decarbonization.
| Report Metric | Details |
|---|---|
| Study Period | 2021 to 2031 |
| Historical Data | 2021 to 2024 |
| Base Year | 2025 |
| Forecast Period | 2026 – 2031 |
| Report Metric | Details |
| Decarbonization Market Size in 2022 | US$15.489 billion |
| Decarbonization Market Size in 2029 | US$45.767 billion |
| Growth Rate | CAGR of 16.74% |
| Study Period | 2019 to 2029 |
| Historical Data | 2019 to 2022 |
| Base Year | 2024 |
| Forecast Period | 2024 – 2029 |
| Forecast Unit (Value) | USD Billion |
| Segmentation |
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| Geographical Segmentation | North America, South America, Europe, Middle East and Africa, Asia Pacific |
| List of Major Companies in Decarbonization Market | |
| Customization Scope | Free report customization with purchase |
The Global Decarbonization Market is analyzed into the following segments: