Environmental Technology Atlas for Germany
Treading new paths in value creation – Continuing growth in the international green tech markets
Innovation in environmental technology is an essential element in mastering ecological challenges. There is no question: If we are to achieve the goals laid out in the Paris Agreement and the 2030 Agenda, we need environmental technology and resource efficiency products, processes and services. Very obviously, there is a close correlation between regulatory and environmental policy conditions on the one hand and innovation and the emergence of new markets on the other hand. This mechanism is keeping demand for green products, processes and services on a high level. The numbers bear impressive witness to this assertion: The global market volume for environmental technology and resource efficiency exceeded the 3 trillion euros mark in 2016, ending the year at 3,214 billion euros. This figure is the sum total of the market volumes for the six green tech lead markets:
- Energy efficiency: 837 billion euros
- Sustainable water management: 667 billion euros
- Environmentally friendly power generation, storage and distribution: 667 billion euros
- Material efficiency: 521 billion euros
- Sustainable mobility: 421 billion euros
- Waste management and recycling: 110 billion euros
Around the globe, the green tech industry is continuing to grow. By 2025, the global volume of the six green tech lead markets will probably have reached 5,902 billion euros. This figure is based on forecasts that the cross-sector industry for green technology will grow at an average annual rate of 6.9 percent between 2016 and 2025. Naturally, the individual lead markets are not all expanding at the same speed. Double-digit average annual growth of 10.2 percent is the impressive figure for the lead market for sustainable mobility. Rapid expansion is also being achieved in material efficiency (8.1 percent) and waste management and recycling (7.4 percent).
Continued robust demand – International successes for “green tech made in Germany”
In recent years, German providers have been able to benefit from rising global demand for green products, processes and services. Especially in the EU member states, where demand is strong, but also in the BRICS countries1, Germany already enjoys a superior market position with technologies to mitigate climate change. In 2016, German companies accounted for a 14 percent share of the global market for environmental technology and resource efficiency. The fact that Germany produces 4.6 percent of the world’s economic output puts this figure in perspective and evidences the tremendous significance of German-made environmental technology and resource efficiency on international markets.
Robust demand for green tech in Germany reflects how well established environmental technology and resource efficiency is on the domestic market
In Germany, the market volume for environmental technology and resource efficiency stood at 347 billion euros in 2016. This figure breaks down as follows across the six green tech lead markets:
- Energy efficiency: 83 billion euros
- Environmentally friendly power generation, storage and distribution: 79 billion euros
- Sustainable mobility: 74 billion euros
- Material efficiency: 63 billion euros
- Sustainable water management: 28 billion euros
- Waste management and recycling: 20 billion euros
While dynamic development is thus expected on the international green tech markets, the cross-sector industry for environmental technology and resource efficiency will also expand in Germany itself. Between 2016 and 2025, the total volume of the country’s own green tech lead markets is projected to jump from 347 billion euros to 738 billion euros. Throughout this period, the German green tech industry is expected to grow at an average annual rate of 8.8 percent. Demand for green technologies is therefore increasing faster in Germany than on the global markets. In the years ahead, strict environmental standards, the energy transition and companies’ awareness of energy and material efficiency will fuel further growth in demand for green products, processes and services. At the same time, demand on the domestic market also creates opportunities for green tech companies based in Germany. Enjoying far closer proximity to their customers, they can collaborate with users to tailor the development of new technologies to individual needs. Cooperation on their home market is also conducive to systemic approaches within the green tech industry. Thanks to their expertise in system solutions and their wealth of technological knowledge, German based environmental technology providers in particular can experience international success while also tapping large shares of the domestic market volume. A closer look at the individual technology lines in the various lead markets reveals rapid expansion in sustainable mobility. When a list of the top ten technology lines was compiled based on “average annual change between 2016 and 2025”, it was conspicuous that five out of the ten fastest-growing technology lines all belong to the lead market for sustainable mobility. Driving this growth is the transition to environmentally compatible, low-carbon mobility in the transport sector.