Decarbonization Market in United States

Decarbonization in United States Trends and Forecast

The future of the decarbonization market in United States looks promising with opportunities in the oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, and manufacturing markets. The global decarbonization market is expected to grow with a CAGR of 11.8% from 2025 to 2031. The decarbonization market in United States is also forecasted to witness strong growth over the forecast period. The major drivers for this market are the increasing investment in decarbonization technologies to reduce costs associated with carbon emissions, the growing awareness of the effects of climate change, and the stricter emissions standards across the world.

• Lucintel forecasts that, within the services category, the sustainable transportation service segment will remain the largest segment over the forecast period.
• Within the end use category, oil & gas will remain the largest segment.

Emerging Trends in the Decarbonization Market in United States

The United States is embracing decarbonization as part of its broader strategy to address climate change and transition to a sustainable, low-carbon economy. The country is taking steps to reduce its greenhouse gas emissions across various sectors, from energy to transportation, by adopting new technologies, improving energy efficiency, and transitioning to cleaner energy sources. With both federal and state-level initiatives driving change, several emerging trends are shaping the decarbonization landscape in the United States, which will influence future growth and development.

• Expansion of Renewable Energy Sources: The United States is significantly expanding its renewable energy capacity, particularly through solar and wind power. With declining costs, renewable energy is becoming more competitive compared to fossil fuels. State and federal policies, such as tax incentives and renewable energy standards, are driving this trend. The growth of utility-scale solar and offshore wind projects is crucial for reducing emissions from the power sector. These energy sources are key to reducing the country’s dependence on fossil fuels and enabling a cleaner, more sustainable energy system.
• Growth of Electric Vehicles (EVs): Electric vehicles are rapidly becoming a dominant force in the United States transportation sector. With government incentives, technological advancements, and growing consumer demand, EV adoption is increasing. Federal and state policies are encouraging the installation of EV charging infrastructure and promoting the transition to electric mobility. This shift is helping reduce emissions from the transportation sector, one of the largest sources of carbon pollution in the country. As battery technology improves and becomes more affordable, EVs are expected to play a central role in achieving decarbonization goals.
• Investment in Green Hydrogen Technology: Green hydrogen is emerging as a critical component of the United States decarbonization strategy. Produced using renewable energy, hydrogen has the potential to decarbonize hard-to-electrify sectors such as heavy industry and long-distance transport. Significant investments are being made into the development of hydrogen production, storage, and distribution technologies. Hydrogen hubs are being established across the country, with federal funding supporting research and pilot projects. This trend is vital for achieving carbon neutrality, particularly in industries where other forms of decarbonization are less feasible.
• Carbon Capture, Utilization, and Storage (CCUS): Carbon capture, utilization, and storage technologies are being increasingly deployed in the United States to address emissions from energy-intensive industries. The federal government is offering incentives to support CCUS projects, including tax credits for capturing CO2. This technology captures CO2 emissions at their source, preventing them from entering the atmosphere and helping industries like cement, steel, and power generation reduce their carbon footprints. CCUS is seen as essential for achieving deep emissions reductions in sectors that are difficult to decarbonize through other means.
• Energy Efficiency and Smart Grid Development: Energy efficiency is a major focus in the United States as both public and private sectors invest in reducing energy consumption. Smart grid technologies, which enable more efficient distribution and management of electricity, are being deployed nationwide. These grids support the integration of renewable energy, improve reliability, and enable consumers to manage their energy use more effectively. Building retrofits, energy-efficient appliances, and industrial process optimization are also playing important roles in reducing overall energy demand. These advancements contribute significantly to lowering carbon emissions across the economy.

The trends reshaping the decarbonization market in the United States are driving significant change across multiple sectors. The expansion of renewable energy, the growth of electric vehicles, and advancements in green hydrogen, CCUS, and energy efficiency are key to meeting the country’s climate goals. These trends are transforming industries, creating new business opportunities, and reducing the nation’s carbon footprint. As these technologies evolve and scale, they will play a crucial role in helping the United States transition to a sustainable, low-carbon future.

Recent Developments in the Decarbonization Market in United States

​The United States is experiencing significant advancements in its decarbonization efforts, driven by policy initiatives, technological innovations, and increased investments in clean energy. These developments are reshaping the energy landscape, promoting economic growth, and positioning the nation as a leader in sustainable development. The following key developments highlight the progress in the U.S. decarbonization market.​

• Strengthened Emission Reduction Targets: In late 2024, President Joe Biden announced an ambitious climate goal to reduce U.S. greenhouse gas emissions by over 60% from 2005 levels by 2035, aiming for net-zero emissions by 2050. This pledge includes deploying offshore wind energy, conserving U.S. lands and waters, and enacting stringent standards to reduce air pollution from vehicles and power plants. Despite potential policy shifts under the incoming administration, state and local governments are expected to continue pursuing these targets. ​
• Expansion of Renewable Energy Capacity: The U.S. is experiencing a significant increase in clean energy investments, with over $300 billion allocated to clean energy projects in 2024. This growth is driven by the Inflation Reduction Act tax credits and favorable power purchase agreements. Developers are adapting to high interest rates by securing multi-year deals and forming long-term partnerships. The expansion includes substantial investments in solar, wind, and battery storage technologies, contributing to a more resilient and sustainable energy infrastructure. ​
• Advancements in Carbon Capture and Storage (CCS): Exxon Mobil announced plans to build a natural gas power plant equipped with technology to capture and store over 90% of its carbon dioxide emissions. The plant aims to supply electricity to data centers, addressing the growing demand for reliable, low-carbon energy solutions. This initiative represents a significant step in integrating CCS technologies into large-scale energy projects, supporting the transition to a low-carbon economy. ​
• Implementation of Carbon Credit Programs: The U.S. is enhancing its carbon credit markets to facilitate emission reductions. The PROVE IT Act, introduced in 2023, mandates the Department of Energy to study the greenhouse gas emissions intensity of various industrial products in the U.S. and other countries. The data collected will support the development of carbon border adjustment mechanisms, ensuring that U.S. manufacturers are not disadvantaged by less stringent environmental standards abroad. ​
• State-Level Legislative Actions: In 2024, 30 states, including Washington, D.C., enacted 130 bills aimed at advancing building decarbonization. These legislative actions focus on reducing greenhouse gas emissions, improving air quality, and enhancing the resilience of homes and businesses to climate change impacts. The initiatives prioritize clean energy workforce development and aim to make communities more sustainable and adaptable to environmental challenges. ​

These developments underscore the United StatesÄX%$%X commitment to achieving significant emission reductions and transitioning to a sustainable energy future. Strengthened emission reduction targets, expanded renewable energy capacity, advancements in carbon capture technologies, implementation of carbon credit programs, and proactive state-level legislative actions collectively contribute to the nation decarbonization efforts. While challenges remain, these initiatives position the U.S. as a global leader in the transition to a low-carbon economy.

Strategic Growth Opportunities for Decarbonization Market in United States

The United States is making significant strides in its decarbonization efforts as part of its commitment to achieving net-zero emissions by 2050. Key applications such as renewable energy, electric vehicles (EVs), green hydrogen, energy efficiency, and carbon capture and storage (CCS) are becoming the focal points of this transformation. These areas present tremendous growth opportunities for businesses, investors, and policymakers. By harnessing the potential of these sectors, the United States is positioning itself to become a global leader in sustainable, low-carbon solutions.

• Renewable Energy: Renewable energy is one of the most prominent areas of growth in the United StatesÄX%$%X decarbonization strategy. With the country pushing to expand its renewable energy capacity, particularly in solar, wind, and battery storage, there is a significant opportunity for investment in clean energy infrastructure. Growth opportunities exist for companies involved in energy production, transmission, and storage solutions. With federal incentives and state-level renewable energy goals, businesses in the renewable energy sector are poised for continued expansion, contributing to a cleaner, more sustainable energy mix across the nation.
• Electric Vehicles (EVs): The electric vehicle (EV) market in the United States is rapidly growing, driven by federal policies, incentives, and a shift in consumer preferences toward clean transportation. As the country aims to reduce emissions from the transportation sector, there is substantial growth potential in EV manufacturing, battery production, and charging infrastructure. With the Biden administration focus on transitioning to electric vehicles, companies involved in EV production and related technologies stand to benefit. Expanding EV adoption will play a central role in the United StatesÄX%$%X efforts to reduce transportation emissions and improve air quality.
• Green Hydrogen: Green hydrogen is emerging as a key solution for decarbonizing industries such as heavy transportation, steel production, and chemical manufacturing. The United States is investing in green hydrogen projects, particularly in regions with abundant renewable energy sources. Growth opportunities in this area include electrolysis technologies, hydrogen production, and infrastructure development. By expanding green hydrogen capacity, the United States can decarbonize hard-to-abate sectors and support industries in their transition to clean energy, thereby driving both economic growth and environmental sustainability in the process.
• Energy Efficiency: Improving energy efficiency across buildings, manufacturing, and infrastructure is a crucial component of the United StatesÄX%$%X decarbonization strategy. Energy-efficient technologies, such as advanced HVAC systems, insulation, and energy management solutions, present a wide range of growth opportunities. The U.S. government is promoting efficiency improvements through incentives and programs aimed at reducing energy consumption in the industrial and residential sectors. Companies that provide energy-efficient solutions are well-positioned to capitalize on these efforts, driving down emissions while improving productivity and lowering costs for consumers and businesses alike.
• Carbon Capture and Storage (CCS): Carbon capture and storage (CCS) technologies are critical for reducing emissions from industrial sectors that are difficult to decarbonize, such as cement, steel, and power generation. The United States is increasing its investment in CCS projects to capture CO2 emissions from these industries and store them underground. Growth opportunities exist for companies involved in the development, deployment, and operation of CCS infrastructure. By scaling up CCS technologies, the United States can make significant progress in meeting its climate targets and ensuring the decarbonization of heavy industries that are vital to the economy.

The decarbonization market in the United States is experiencing a wave of strategic growth opportunities across key applications such as renewable energy, electric vehicles, green hydrogen, energy efficiency, and carbon capture and storage. These sectors are shaping the nation’s transition to a low-carbon economy, driving innovation, investment, and job creation. By capitalizing on these opportunities, businesses can help the United States achieve its climate goals while simultaneously unlocking new markets, fostering technological advancements, and contributing to global sustainability efforts.

Decarbonization Market in United States Driver and Challenges

The decarbonization market in the United States is shaped by a variety of factors, including technological advancements, economic pressures, and regulatory changes. The country’s focus on reducing carbon emissions and increasing reliance on renewable energy sources presents both significant opportunities and challenges. These include the development of clean technologies, increased investment in green infrastructure, and changes in policy and public opinion. However, the U.S. faces obstacles such as high investment costs, grid integration issues, and political uncertainty, all of which impact the speed and success of the transition to a low-carbon economy.

The factors responsible for driving the decarbonization market in the United States include:
• Government Regulations and Policies: The U.S. government has implemented a range of policies aimed at accelerating the decarbonization process, such as the Biden administration’s commitment to achieving net-zero emissions by 2050. Federal incentives, tax credits for renewable energy, and emissions reduction targets are significant drivers in the adoption of clean technologies. Regulatory frameworks, such as carbon pricing and emission standards, help create a clear path for businesses and investors to align with decarbonization goals, thus encouraging progress toward cleaner energy solutions.
• Technological Advancements in Clean Energy: Breakthroughs in clean energy technologies, such as solar, wind, and energy storage, are driving the U.S. decarbonization market. The costs of solar and wind power have decreased substantially over the past decade, making them more competitive with fossil fuels. Additionally, advancements in energy storage, smart grids, and carbon capture are enabling better integration of renewable sources into the existing grid. These technological innovations are crucial to ensuring that renewable energy can meet the country’s growing demand while maintaining grid stability and reliability.
• Private Sector Investment and Innovation: The private sector is playing a significant role in the decarbonization market in the U.S. Large corporations, utilities, and clean-tech startups are investing heavily in renewable energy projects, energy efficiency solutions, and sustainable technologies. Green bonds and sustainability-focused investments are becoming more prevalent as businesses seek to align with consumer demand for environmentally responsible practices. Additionally, venture capital is driving innovation in emerging clean technologies, providing the financial backing needed to bring new solutions to market.
• Public Support and Consumer Demand: Growing public awareness of climate change and environmental sustainability has driven demand for green products and services. Consumers are increasingly looking for energy-efficient solutions, electric vehicles, and renewable energy options, which is putting pressure on companies to develop and adopt clean technologies. This demand from the public is encouraging governments and businesses to prioritize decarbonization efforts, providing a strong market signal for innovation and investment in sustainable energy solutions.
• Shift to Electric Vehicles (EVs): The transition to electric vehicles is a key component of the U.S. decarbonization strategy, with significant investments being made in EV infrastructure, battery technologies, and manufacturing capabilities. Government incentives, such as tax credits for EV purchases, and increasing environmental concerns are pushing both consumers and manufacturers toward electric vehicles. The shift away from gasoline-powered vehicles not only reduces greenhouse gas emissions but also drives advancements in clean energy technologies, such as battery storage and charging infrastructure, further advancing decarbonization goals.

Challenges in the decarbonization market in the United States are:
• High Initial Investment Costs: One of the primary challenges to decarbonization in the U.S. is the high upfront cost associated with clean energy technologies. Solar panels, wind turbines, energy storage systems, and electric vehicles require significant investment in both production and infrastructure development. While these technologies are becoming more affordable over time, the initial capital expenditures can be a barrier for smaller businesses, municipalities, and consumers. Securing financing for these projects is often challenging, which can slow the pace of adoption and hinder widespread implementation.
• Grid Integration and Infrastructure Gaps: The existing energy grid in the U.S. was not designed to handle the intermittent nature of renewable energy sources such as wind and solar. Integrating these sources into the grid requires significant investment in new infrastructure, including energy storage solutions, smart grid technologies, and updated transmission lines. The lack of sufficient infrastructure to support large-scale renewable energy deployment is a major challenge, especially in regions with high renewable potential but inadequate grid capacity. This infrastructure gap could delay the transition to a fully decarbonized energy system.
• Political and Regulatory Uncertainty: Political and regulatory instability in the U.S. can create uncertainty in the decarbonization market. Shifting administrations, policy changes, and differing views on climate action can disrupt the continuity of decarbonization efforts. For example, the withdrawal of the U.S. from the Paris Agreement under the previous administration and the uncertainty surrounding future climate policies can create volatility in the market. Regulatory changes, such as the rollback of environmental standards or changes to renewable energy incentives, can impact the long-term investment in clean energy technologies and infrastructure.

The decarbonization market in the U.S. is driven by a combination of technological innovations, regulatory support, and consumer demand for sustainable solutions. However, challenges such as high investment costs, infrastructure gaps, and political uncertainties continue to pose obstacles to the rapid adoption of clean energy technologies. Overcoming these challenges will be critical to achieving the nation’s climate goals, and continued investment in clean technologies, grid modernization, and policy stability will be essential for accelerating the decarbonization process in the U.S.

List of Decarbonization Market in United States Companies

Companies in the market compete on the basis of product quality offered. Major players in this market focus on expanding their manufacturing facilities, R&D investments, infrastructural development, and leverage integration opportunities across the value chain. Through these strategies, decarbonization companies cater to increasing demand, ensure competitive effectiveness, develop innovative products & technologies, reduce production costs, and expand their customer base. Some of the decarbonization companies profiled in this report include:
• Company 1
• Company 2
• Company 3
• Company 4
• Company 5
• Company 6
• Company 7
• Company 8
• Company 9
• Company 10

Decarbonization Market in United States by Segment

The study includes a forecast for the decarbonization market in United States by services, technology, deployment, and end use.

Decarbonization Market in United States by Services [Analysis by Value from 2019 to 2031]:

• Carbon Accounting & Reporting Services
• Sustainable Transportation Services
• Waste Reduction & Circular Economy Services

Decarbonization Market in United States by Technology [Analysis by Value from 2019 to 2031]:

• Renewable Energy Technologies
• Energy Efficiency Solutions
• Electric Vehicles
• Carbon Removal Technologies
• Carbon Capture and Storage

Decarbonization Market in United States by Deployment [Analysis by Value from 2019 to 2031]:

• On-premises
• Cloud

Decarbonization Market in United States by End Use [Analysis by Value from 2019 to 2031]:

• Oil & Gas
• Energy & Utility
• Agriculture
• Government
• Automotive & Transportation
• Aerospace & Defense
• Manufacturing
• Others

Features of the Decarbonization Market in United States

Market Size Estimates: Decarbonization in United States market size estimation in terms of value ($B).
Trend and Forecast Analysis: Market trends and forecasts by various segments.
Segmentation Analysis: Decarbonization in United States market size by services, technology, deployment, and end use in terms of value ($B).
Growth Opportunities: Analysis of growth opportunities in different services, technology, deployment, and end use for the decarbonization in United States.
Strategic Analysis: This includes M&A, new product development, and competitive landscape of the decarbonization in United States.
Analysis of competitive intensity of the industry based on Porter’s Five Forces model.

If you are looking to expand your business in this or adjacent markets, then contact us. We have done hundreds of strategic consulting projects in market entry, opportunity screening, due diligence, supply chain analysis, M & A, and more.

FAQ

Q1. What are the major drivers influencing the growth of the decarbonization marketin United States?
Answer: The major drivers for this market are increasing investment in decarbonization technologies to reduce costs associated with carbon emissions, growing awareness of the effects of climate change, and stricter emissions standards across the world.
Q2. What are the major segments for decarbonization market in United States?
Answer: The future of the decarbonization market in United States looks promising with opportunities in the oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, and manufacturing markets.
Q3. Which decarbonization market segment in United States will be the largest in future?
Answer: Lucintel forecasts that sustainable transportation service segment will remain the largest segment over the forecast period.
Q4. Do we receive customization in this report?
Answer: Yes, Lucintel provides 10% customization without any additional cost.

This report answers following 10 key questions:

Q.1. What are some of the most promising, high-growth opportunities for the decarbonization market in United States by services (carbon accounting & reporting services, sustainable transportation services, and waste reduction & circular economy services), technology (renewable energy technologies, energy efficiency solutions, electric vehicles, carbon removal technologies, and carbon capture and storage), deployment (on-premises and cloud), and end use (oil & gas, energy & utility, agriculture, government, automotive & transportation, aerospace & defense, manufacturing, and others)?
Q.2. Which segments will grow at a faster pace and why?
Q.3. What are the key factors affecting market dynamics? What are the key challenges and business risks in this market?
Q.4. What are the business risks and competitive threats in this market?
Q.5. What are the emerging trends in this market and the reasons behind them?
Q.6. What are some of the changing demands of customers in the market?
Q.7. What are the new developments in the market? Which companies are leading these developments?
Q.8. Who are the major players in this market? What strategic initiatives are key players pursuing for business growth?
Q.9. What are some of the competing products in this market and how big of a threat do they pose for loss of market share by material or product substitution?
Q.10. What M&A activity has occurred in the last 5 years and what has its impact been on the industry?