An overview of the Greentech market

An overview of the Greentech market
The Greentech sector overview


Greentech is technology which makes industry more sustainable. It can be used in many sectors and parts of industry, such as energy production, construction, and water treatment or in different production and supply chain processes. The Greentech market in 2020 was valued at $11.2 billion, and it is expected to grow with an impressive CAGR of 26.6% in the forecast period 2020-2025, reaching $36.6 billion in 2025. [1]
The major market driver is an increased awareness of the climate emergency and the resulting push for a more sustainable future by many governments, and in combination with other factors such as the draining of natural resources and the possibility of rebuilding the economy post-Covid-19 with a focus on sustainability, the Greentech sector is gaining serious momentum. [2] Governing bodies globally are increasing their funding and support for sustainable innovation. [3]
The European Commission created the European Green Deal in 2019 which aims to achieve net-zero greenhouse gas emissions by 2050. [4] Through this deal it is expected that over €1 trillion will be invested in green projects over the course of 10 years from both public and private funds, with funding green technology as a priority. In Italy, the Superbonus 110% has been recently included in the pandemic-driven Decreto Rilancio, which will allow tax relief up to 110% when measures are taken to increase the energy efficiency or reduce the seismic risk of existing buildings. algoWatt SpA, a listed Italian Greentech solutions company, expects the Superbonus 110% will allow it to build on its impressive growth (production value increased by €18.9 million, or 9% in 2020) by helping it to finance new projects. [5]
All across Europe there are examples of the Greentech sector receiving increased attention and funding, such as in the Baltics where an accelerator called Future Hub has selected 10 Greentech startups which will receive support in a development and solutions programme, including the Italian startup Ecomate, which provides an ESG rating platform for every company. [6]
With such a global push for increased sustainability, and more funding to back it up, the next few years are likely to be fundamental in the development Greentech sector.


Market restraints


Despite many signs of a Greentech boom, inevitably the sector will face its own challenges. Even though the European EV market is growing, in the UK regulation does not offer the same levels of tax relief and benefits for manufacturers, and unless these regulations change it is likely that supply in the UK will drop, forcing UK buyers to go elsewhere, which increases costs and so becomes a deterrent. However, the UK has announced that it will reduce the sale of new cars with engines to zero by 2035, so there is hope that new regulations matching those in the EU will be implemented soon to boost the UK EV market. [7]
The clean energy segment may also face issues of lack of infrastructure which could stem its growth. Often, green energy cannot be used to its full potential due to an inability to effectively store it and transfer it from where it is most cheaply produced to where it is needed.[8]
A constraint which the Greentech market in general faces is that it requires large investment with longer-term revenue prospects. Investments need to be made early in a project’s life, particularly from public funds, in order to reduce the risk and therefore attract private investors. With many projects requiring years for investors’ money to become bankable, there is a risk that established, revenue-producing projects will receive greater investments than new ones, thereby reducing the diversity of projects of launched and risking the market expansion that the Greentech sector requires to achieve large-scale growth. [9]


A closer analysis of market segments


Within Greentech, different areas present various levels of importance and growth prospects. Certainly, the services segment is expected to grow at the highest CAGR during the 2020-2026 forecast period due to it being fundamental across many industries, including other Greentech segments. [1] In 2022 the global wind turbine market is estimated to be $47.83 billion – $3.07 billion higher than it was in 2017, mostly due to an increase in onshore development, driven by more governments taking environmental impacts, geo-political risk and self-sufficiency into greater consideration, and therefore choosing more clean energy sources[10]
Solar power is another Greentech segment expecting to see important growth. The US Federal Energy Regulatory Commission expects to see just over 50% of new US power capacity coming from solar power, as well as 27% from wind power. [11] By 2030, the US will have more than doubled its renewable energy capacity, with annual revenues from wind and solar power potentially exceeding $60 billion. [12]
The recent government initiatives in Europe and the US, discussed earlier, have boosted the EV market and pushed electric car sales in Europe to make up around 15% of total car sales, having been around 10% in previous years. [7] Major players in the $60 billion ride hailing industry (such as Uber and Lyft) are pushing for 100% EV usage in cities in the US and Europe by 2030, so it seems certain that the EV industry as a whole is set to grow. Electric delivery vehicle sales are also expected to soar as delivery companies undergo increasing pressure to become more sustainable. With e-commerce sales reaching $4 trillion in 2020, and expected to be worth $6.5billion in 2022, such a major industry making more use of EVs will surely have a major positive impact on the industry. [13]
Although there are few results so far, there are predictions that Greentech will boom with Blockchain. Cryptocurrency mining is very energy intensive, producing a lot of carbon emissions, and Blockchain developments could make energy grids more sustainable by sharing data in real time. [1] Therefore,
Blockchain may become a driver of green technology, and being a sector that is expected to grow massively over the next few years, Greentech can only benefit from this relationship.

[1] Article: ‘Green Technology and Sustainability Market projected to reach $36.6 billion by 2025, with a remarkable CAGR of 26.6%’

Source: iCrowdNewswire


[2] Article: ‘Green Technology Market to See Massive Growth by 2026 | Vivint Solar, Panasonic, ConsenSys’

Source: iCrowdNewswire


[3] Article: ‘National Green Bank Bill Targets $100B for Business Sectors Key to Biden’s Climate Agenda’

Source: Greentech Media


[4] Article: ‘A Global Green Deal: op-ed article by Ursula von der Leyen, President of the European Commission, and Werner Hoyer, President of the European Investment Bank’

Source: European Commission


[5] Article: ‘algoWatt S p A : 2020 industrial results reviewed. Strong growth in the three business units in the energy, mobility and smart cities sectors’

Source: MarketScreener


[6] Article: ‘Finish, Danish teams picked for the first Baltic Greentech Programme’

Source: Arctic Startup


[7] Article: ‘Electric Cars Booming In Europe, But UK Growth Threatened Without New Regulations’

Source: CleanTechnica


[8] Article: ‘Report: Renewables Are Suffering From Broken US Transmission Policy’

Source: Greentech Media


[9] Article: ‘How to Get the Biggest Bang for Our Clean Energy Buck in Southeast Asia’

Source: Greentech Media


[10] Article: ‘Global Wind Turbine Market Value To Hit $48 Billion By 2022, Led By APAC’

Source: CleanTechnica


[11] Article: ‘Forecast: Solar Power Over 50% Of US Power Capacity Growth In Next 3 Years’

Source: CleanTechnica


[12] Article: ‘Seeds Of Opportunity, How Rural America Is Reaping Economic Development Benefits From The Growth Of Renewables’

Source: CleanTechnica


[13] Article: ‘The Green Boom Is Coming And These Companies Could Soar’

Source: PR Newswire