Asia to see massive growth in carbon management sector

Asian suppliers are under increasing pressure from multinationals to provide data on carbon emissions. Photo:

Growing requirements for carbon emissions tracking and reporting are good news for the burgeoning carbon management industry, particularly for companies in Asia Pacific, say experts.

Carbon management expert David Solsky, who is chief executive of privately owned Australian firm CarbonSystems, said in an e-mail interview with Eco-Business that multi-national companies are demanding better environmental monitoring and reporting from their Asian suppliers.

“In coming years the Asian market, and especially China, will be under huge pressure from the west to report and manage supply chain emissions. This will create significant opportunities for software and services companies regionally,” he said.

According to a recent report by the Carbon Disclosure Project (CDP), an international non-profit organisation that works with corporations, governments and other agencies to monitor climate changing greenhouse gases, over 50 per cent of a corporation’s carbon emissions come from its supply chain. The same report found that data accuracy was a major stumbling block for suppliers wanting to improve carbon management. Of the 1,000 suppliers surveyed for the report, nearly all admitted to problems in reporting emissions due to data gaps and measurement constraints. Asian supply companies comprised 18 per cent of the survey group.

Mr Solsky said that Australian-based companies with experience in carbon management software and services will be well placed geographically to capitalize on this market.

A report released this month by Pike Research, a United States–based clean tech research firm, found that global expenditure for carbon accounting software and carbon management services is expected to grow from US$705 million in 2010 to US$5.7 billion by 2017.

The report’s authors state that the rapid growth of the carbon management industry is in part due to increased efforts from business to improve energy efficiency. “Frequently, carbon management is becoming synonymous with energy management,” states the report.

Pike Research senior analyst Marianne Hedin stated in a press release the industry was marked by stiff competition between carbon management software companies and service providers - a competition complicated by companies from other sectors such as consulting, IT services, energy services and building control systems that were entering the fray.

“Growth in the carbon management market is occurring amidst a turbulent industry landscape in which software vendors and service providers are vigorously jockeying for competitive position,” she stated.

CarbonSystems’ Mr Solksy disagreed, saying the report presented a false choice. “Both are necessary,” he said,  “Companies that want to be cost efficient need sustainability software to get a clear, objective view of their environmental performance so they can accurately target energy and carbon abatement service programmes.”

Ms Hedin projected more rapid growth for carbon management service providers than for carbon accounting software companies, and stated that services will grow from 55 per cent of the total market in 2010 to 67 per cent by 2017.

“Carbon and energy management services expenditure will always represent a higher spend than software because expert analysis, engineering consulting and project management services are high-cost human inputs in any solution,” said Mr Solsky.

He added that energy management presented opportunities for both carbon accounting vendors and energy management services.

“However, no single vendor has all the skills and technologies to offer a best of breed, end to end solution. Organizations will always get better value from a multidisciplinary approach that incorporates the powerful data insights of enterprise sustainability software combined with specialist energy, carbon and other environmental consulting services,” he said.

Like this content? Join our growing community.

Your support helps to strengthen independent journalism, which is critically needed to guide business and policy development for positive impact. Unlock unlimited access to our content and members-only perks.

Most popular

Featured Events

Publish your event
leaf background pattern

Transforming Innovation for Sustainability Join the Ecosystem →