The global emission rate for CO2 shows the progress of the technology sector

Companies developing technologies to eliminate or reduce carbon emissions are “poised for strong continued growth,” with an expected value of $1.4 trillion by 2027, according to a new market study.

A recent research report by financial information firm PitchBook predicts that the sector will be worth $905 billion by the end of this year. That makes the global climate technology sector relatively small – generally worth less than electric vehicle maker Tesla.

But Pitchbook predicts the growing sector will grow by 8.8 percent over the next five years, “driven by a global focus on tougher emissions targets and increasing consumer interest in reducing emissions.” That amount could increase if there is a “significant regulatory change or technological innovation” during that period, it said in a report to investors.

The field analyzed by Pitchbook is wide. It includes startups that capture or trade carbon dioxide, industrial and construction companies that produce less than standard emissions, and land management companies that use tracking devices or low-emission fertilizers.

The most valuable group of companies in the space work to reduce greenhouse gas emissions during construction and during the lifetime of buildings. Currently, their value is about 459 billion dollars, and their value is expected to increase to 650 billion dollars in the next five years, according to the report.

That segment includes startups like building materials manufacturers Holcim Group and HeidelbergCement, as well as green construction firm Veev and energy efficiency company Resideo Technologies.

Pitchbook’s section on what it calls “green industry” focuses on decarbonizing industrial chemicals and raw materials. According to the report, the price is more than 400 billion dollars. Notable firms include lithium battery recycler Redwood Materials and mining company Lilac Solutions.

Pitchbook expects the green industry to be the most important climate technology segment by 2027, worth $657 billion. But for those projections, emissions pricing legislation, such as the EU’s carbon cap adjustment mechanism, “will be critical to ensuring that green chemicals and materials are not harmed by high-emissions products,” the report said.

The value of low-carbon land management companies is expected to reach $30 billion this year, rising to $49.5 billion in five years. The segment includes major tracking companies such as Honeywell and alternative fertilizer company Pivot Bio.

Venture capital investment in land management firms has recently slowed, the report noted. But the inflation-reduction legislation signed into law by President Joe Biden in August added more than $20 billion to climate-smart agricultural practices and $5 billion to fire-resilient forests, urban tree planting and forest conservation efforts.

The smallest but fastest-growing part of the sector is made up of carbon technology companies such as live-air capture pioneer ClimeWorks and carbon trading platform Expansive. They are currently worth around $9 billion and are expected to reach $20.9 billion by 2027.

The carbon technology sector will also get a boost from Biden’s new climate law, the report said. The price of carbon captured in the United States has risen from $50 a ton to $85 a ton for CO2 released from emissions. For live-air recording projects, Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon Carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon carbon.

But it’s not all smooth sailing for carbon capture and businesses.

“The main risk facing the carbon technology space is that the price of carbon can change dramatically due to changes in policy and regulation,” Pitchbook said. “The product of carbon technology (carbon removal or reduction) is not directly valued—other than a specific value as a feedstock for carbon use—and the fiscal value of carbon tech activities is largely driven by the value legislative incentives and plans place on carbon,” he said.

Despite this risk, investors remain enthusiastic about the potential of carbon capture companies. There were 11 venture capital deals in the second quarter of 2022, raising $882.2 million for ClimeWorks, Carbon Clinic and other firms, according to PitchBook.

“This is the best quarter ever, with investments totaling $432.1 million over the past four quarters,” another investor report published last week said.