The decarbonisation technologies market is predicted to skyrocket from US$1.45 trillion in 2022 to US$4.09 trillion in 2032, growing at a Compound Annual Growth Rate (CAGR) of 10.93%, according to global intelligence firm ABI Research. With the industrial sector being one of the major contributors to global emissions, the introduction of decarbonization technologies will play a crucial role in global efforts to reduce emissions and achieve net-zero by 2050.
"The decarbonization technology market is being driven by exponentially increasing annual investments, decreasing costs of renewable energy infrastructure, and growing global commitments from industrial companies to reduce emissions and develop sustainable products," says Alex McQueen, Research Analyst at ABI Research. Regulatory frameworks, such as Europe's Green Deal Industrial Plan, which outlines steps to implement carbon-cutting technologies, are also propelling the market.
Electrification technologies, including renewable energy and industrial electric machinery, lead the industrial decarbonization technology market. These technologies counted for a significant 71.5% share of the market in 2022. The increasing usage of renewable energy worldwide is attributed to the diminishing cost of infrastructure and the ongoing energy crisis weakening the cost competitiveness of fossil fuels. Moreover, energy efficiency technologies, such as energy storage and management systems, hold the second-largest market share at 23.6%. These are followed by low-carbon fuels with 4.6% and carbon capture, utilization, and storage with 0.3%.
Companies such as Honeywell, Shell, and Siemens are ably leading the promotion of decarbonization technologies for the industrial sector globally. The market is witnessing a surge in the number of firms concentrating on creating innovative clean technologies and products. Among these are Air Liquide, Baker Hughes, CarbonCure Technologies, Li-Cycle, and SSAB.
While the investment in clean technology is increasing rapidly, the annual investments largely fall short of what is required to achieve net-zero emissions by the 2050 target. This shortfall is delaying the crucial development of technologies like energy storage and carbon capture, preventing them from significantly contributing to emission reduction. "Decarbonizing the industrial sector will require a major increase in global green tech investment, as well as stronger policy incentives to scale up commercial availability and affordability of these technologies," says McQueen. A meaningful reduction in emissions will only be possible through close collaboration between governments, industrials, and technology suppliers.
These insights are elaborated further in ABI Research’s Decarbonization Technologies for Industries application analysis report. This report offers an in-depth analysis of key market trends and factors for a specific technology, based on extensive primary interviews. It is part of the company's Sustainability for Industrial Markets research service, which comprises research, data, and ABI Insights.