Published: October 2008
“The environmental goods and services industry consists of activities which produce goods and services to measure, prevent, limit, minimise or correct environmental damage to water, air and soil, as well as problems related to waste, noise and eco systems. This includes cleaner technologies, products and services that reduce environmental risk and minimise pollution and resource use.”
(OECD/Eurostat agreed definition)
With a view to developing business opportunities within the environmental goods and services (EGS) sector on the island of Ireland, Forfás and InterTradeIreland have commissioned research in the area. This research has attempted to:
- estimate the size of the EGS sector on the island of Ireland;
- examine, for the all-Island market, the market drivers, and the strengths and weaknesses of each sub-sector;
- identify the most promising areas in the EGS sector where new opportunities are likely to
- identify key supports and framework conditions required and desirable to assist EGS companies including the potential to increase communication and collaboration within the sector and between firms and research institutes.
A steering group of officials from relevant Department (Enterprise, Trade and Employment)
and agencies (Forfás, InterTradeIreland, Enterprise Ireland, IDA Ireland, Invest NI and Sustainable Energy Ireland) has met regularly since September 2007 to further this research.
With their assistance, Forfás and InterTradeIreland have developed this study.
The size of the environmental goods and services market
The global EGS market as a whole is growing steadily and this trend is likely to continue. A
number of studies have estimated that the value of the sector was in excess of $600 billion worldwide in 2005 and is likely to exceed $700 billion by 2010 and $800 billion by 2015 .
Although the wide range of the activities that can be included in the sector can make data collection difficult, some figures have been calculated from background research. The EGS sector in Ireland is estimated to be valued at some €2.8 billion, with Northern Ireland accounting for an additional £624 million (€790 million) approximately. This all-island figure of €3.6 billion does not include the market for environmental goods and services in building and construction materials and is therefore almost certainly an underestimate.
Profile of the sector
Besides attempts to quantify the size of the EGS sector, a profile of the EGS sector - both on
the island and globally - has been drawn. To do this, some trends and characteristics have been identified from the global and domestic EGS markets.
Profile of the global EGS market:
- Firms in OECD countries are estimated to account for about 90% of the global EGS market, with Western Europe, the United States and Japan being to the fore in the import and export of environmental goods and services .
- At the same time, developing countries, in particular China and India are now seeing
strong growth in the sector in response to environmental problems.
- Investment in the EGS sector worldwide has increased dramatically in recent years.
- Venture capital investment in the area of industrial and energy clean technology is now
overtaking investment in areas considered core destinations for this capital .
Profile of the EGS market on the island of Ireland:
- A small number of major players exist in the EGS market on the island of Ireland . The
market is also seen to have a high proportion of small and medium-sized enterprises (SMEs) who have established a substantial business presence over the past ten years.
- There are also a number of subsidiaries of UK and EU parent companies offering environmental consultancy services and competing in key sectors such as waste management.
- To a large extent – but with a few notable R&D-intensive exceptions in certain sectors (such as waste and ocean energy) – the EGS market on the island of Ireland has displayed low R&D investment. Nonetheless, a growing number of companies on the island of Ireland have been successful in developing business models which have commercialised R&D-intensive technologies related to the EGS sector. Given Ireland’s low base of R&D, the adoption and adaptation of such EGS technologies will continue to be important.
Key drivers of the sector
A number of drivers are seen to be facilitating growth of the EGS sector, some of which are
interlinked. These include:
- Compliance with EU environmental directives and regulations.
- Rising energy costs.
- Climate change considerations.
- Green consumerism.
- Significant increases in public investment in environmental services and infrastructure.
- Increases in investment in energy and environment-related research and development.
- Green public procurement.
Strengths and weaknesses of the sector on the island of Ireland
As part of this study a strengths and weaknesses, opportunities and threats (SWOT) analysis has been carried out on the EGS sector on the island. Amongst the key factors identified in this SWOT analysis were the following:
- Key strengths: large public and private investment in environmental services and infrastructure, government commitment to regulatory enforcement, good access to natural energy sources, state enterprise agency adaptability (for example, strong experience in attracting foreign direct investment) and flexibility of companies operating on the island.
- Key weaknesses: the low starting base of the EGS sector on the island, the existence of regulatory uncertainty in some key sectors, low levels of EGS related research and development and limited green public procurement.
- Key opportunities: the rapidly growing global EGS market, potential emerging markets in Eastern and Central Europe and the proximity to the growing British market, growing environmental awareness in the public and private sectors and potential synergies between sectors which are strong on the island (e.g. ICT and sensors).
- Key threats: Failure to meet Kyoto/ renewable energies targets, conflicts of interest between regulators and regulated sectors (in particular the waste management sector), cuts in environmental infrastructure investment.
Potential enterprise opportunities
A number of sub-sectors with potential environmental goods and services opportunities have been identified from the research. While a wide range of enterprise opportunities are expected to arise in the growing EGS sector, the sub-sectors which are seen to have the greatest potential are:Renewable Energies
- Efficient energy use and management (including eco-construction)
- Waste Management, Recovery and Recycling
- Water and Wastewater Treatment
- Environmental Consultancy and Services
 ENDS Directory 2008, UK Centre for Economic and Environmental Development Global Market Estimate.
 Environment Business International, San Diego, California, 2003. See also Bijit Bora and Robert Teh, ‘Tariffs and Trade in Environmental Goods’, WTO Seminar, October 2004.
 For example, industrial/ energy clean technology was ranked the fourth largest venture capital investment category (after Biotech, Software and Medical Devices and Equipment) in North America in quarter one of 2008 in the PricewaterhouseCoopers/National Venture Capital Association MoneyTree Report.
 Examples include NTR which own Greenstar, BioVerda and formerly Airtricity; One51 which owns Cedar and Techrec; DCC which owns Enva; and other key players such as Glen Dimplex and Kingspan.
Click here to download the full report: Environmental Goods and Services Sector on the Island of Ireland Final Report 2008