Environmental Industries
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Industry Facts

The Office of Energy and Environmental Industries (OEEI) is part of the Manufacturing section of the Manufacturing and Services Division of the International Trade Administration of the U.S. Department of Commerce. Its primary mission is to promote U.S. commercial and economic interests related to international trade and investment in energy and environmental technologies (goods and services).

The office:

This web site focuses on the environmental industries and is maintained by the environmental industries team of the office. Here is a link to our site focused on energy industries.

Industry Background and Definition:

In general and as well as for the purpose of this report, the environmental technologies (ET) industry is defined as all goods and services that generate revenue associated with environmental protection, assessment, compliance with environmental regulations, pollution control and prevention, waste management, renewable energy, remediation of contaminated property, design and operation of environmental infrastructure, and the provision and delivery of environmental resources. According to Environmental Business International (EBI), employment for the U.S. ET industry is approximately 1.6 million for all segments, producing revenues of $290 billion. The U.S. ET industry revenue is broken down into the various industry segments as follows: services (47%), equipment (21%), and resources (32%).

Key subsectors for products and services of the ET industry include: air, water, and soil pollution control; solid and toxic waste management; recycling; renewable energy; pollution prevention and resource recovery; site remediation; environmental monitoring; and water treatment for industrial and municipal water use. This sector is extremely broad and includes a wide variety of products and services that cut across many different industry sectors. The ET industry evolved in response to concerns about the risks and costs of pollution and the enactment of pollution control legislation and regulations in the United States and around the world. It is now increasingly driven by sustainability concerns.


Importance of the Sector: The global ET market is approximately $782 billion.

The U.S. is the world’s largest producer and consumer of environmental technologies worldwide.

In the United States, approximately 119,000 enterprises are engaged in the ET business.

The U.S. ET industry generates approximately $300 billion in revenues, $43.8 billion in exports, and supports close to 1.7 million jobs.

(2008 Environmental Business International)


Global Competitiveness Factors:

The United States is regarded as a world leader in many ET categories, including: engineering, design, construction, and consulting services; pollution prevention and resource recovery; water and wastewater handling and treatment equipment; stationary and mobile source air pollution monitoring and control equipment; solid and hazardous waste management; contaminated site remediation; automation for treatment systems and monitoring equipment; and information systems/software for environmental management and analysis.

While 99 percent of U.S. ET private sector companies fall under the small and medium-sized enterprises (SMEs) category, they generate only 20 percent of the total U.S. ET revenue. Large ET companies, which represent only one percent of all private sector activity, account for 49 percent of total U.S. ET revenue. Public-sector municipalities and similar entities account the remaining 31 percent of revenue and dominate water utilities, wastewater treatment works, and solid waste management.

The ET industry continues to experience consolidation as larger ET companies typically arise through mergers and acquisitions, not internal growth. More change of ownership and structure is likely to continue.


U.S. Environmental Export Competitiveness 2004-2008
2004
2005
2006
2007
2008
Global Market
638.6
671.2
711.9
757.9
782.4
US Market
245.2
256.3
271.4
289.6
299.5
Non-US Market
393.4
414.8
440.5
468.4
493.8
% Exports
11.4%
12.0%
13.1%
14.2%
14.6%
US Exports
28.7
31.8
36.9
43.1
43.8
% Growth in U.S. Env'l Exports
10%
11%
16%
17%
2%
US Share of Non-US Market
7.3%
7.7%
8.4%
9.2%
8.9%
Trade Surplus
5.9
8.2
10.7
12.8
10.9
Units:$ U.S. billion
SOURCE: Environmental Business International, San Diego, CA



In terms of exports as a percentage of total U.S. ET production, the leading subsectors are: resource recovery (58%), instruments and information systems (46%), water equipment and chemicals (36%), waste management equipment (25%), and air pollution control (16%), as illustrated in Figure 5 below.


ET Subsectors Exports in 2008 ($ billion)
U.S. Environmental Exports By Sector, 2008
Equipment
US ind
%export
Water Equipment & Chemicals
28.5
36.2%
Air Pollution Control
18.0
16.2%
Instruments & Info. Systems
5.9
46.0%
Waste Mgmt Equipment
11.4
25.0%
Process & Prevention Tech.
1.9
8.0%
Services
Solid Waste Management
53.1
0.3%
Hazardous Waste Mgmt
9.2
1.0%
Consulting & Engineering
27.1
12.8%
Remediation/Industrial Services
12.5
6.0%
Analytical Services
1.9
7.4%
Water Treatment Works
40.7
0.6%
Resources
Water Utilities
39.2
0.2%
Resource Recovery
28.5
58.0%
Clean Energy Systems & Power
21.5
16.0%
Total
299.5
14.6%
Source: Environmental Business International, Inc. (San Diego, CA).
Note: U.S. Industry is equal to revenues generated by U.S. companies worldwide. U.S. market refers to revenue from U.S. customers. Exports do not include ownership of overseas companies but do include repatriated profits.

The U.S. ET industry should be able to increase its global competitiveness as it focuses greater attention on key international markets and introduces new, state-of-the art products and services (e.g., particularly technologies applicable to water reuse and recycling, desalination, and technologies with comprehensive environmental management system applications). While technological development can undoubtedly help increase U.S. industry’s competitiveness, stricter laws and regulatory enforcement worldwide are essential to addressing the world’s environmental issues.

The international market for ET is fueled by several important policy and market drivers of demand: greater global focus on climate change and sustainable development; liberalization of trade in environmental goods and services via bilateral and multilateral efforts; growing industrialization and environmental awareness in key emerging markets; and, application of cleaner production and environmental “best practices” not only by multinationals and major foreign companies, but also and increasingly by SMEs.

Barriers to the Export of Environmental Technologies:

The developing world is progressively embracing environmental protection and is developing new regulatory frameworks, but much work is still needed in this area. Relatively high tariffs on ET products (averaging 15-20 percent) are present in most major emerging markets. In some key markets, such as China, the Philippines, Malaysia, and Brazil, tariffs on ET products are as high as 40 percent. Weak environmental regulatory regimes and enforcement in some foreign markets also failed to increase demand for the ET sector at large- thus affecting U.S. ET exports.

Numerous non-tariff barriers (NTBs) affect worldwide trade in ET goods, including: restrictive technical standards; disproportionately onerous labeling, packaging and documentation requirements; non-transparent government procurement and contracting procedures; restrictions on professional services, investment, and ownership; and, product design/life cycle and recycling issues.

Foreign ET firms enjoy substantial government support for their overseas ventures, and U.S. ET companies find it very difficult to compete on such terms. Generally, most U.S. ET firms lack international experience. U.S. ET firms also lack the capitalization necessary to move into emerging overseas markets and provide necessary large-scale infrastructure investments.

To address these barriers, OEEI cooperates extensively with the Export-Import Bank, which has established an “environmental lending program.” OEEI also works closely with the Office of the U.S. Trade Representative (USTR) to lower tariffs on environmental goods internationally and to establish new agreements that will facilitate increased access to global markets for U.S. environmental technology firms. In 2007, USTR announced a joint proposal by the U.S. and the European Union to place priority action on technologies directly linked to addressing climate change and energy security by establishing an environmental goods and services agreement in the World Trade Organization (WTO). The agreement would include a commitment by all WTO Members to remove barriers to trade to a specific set of climate-friendly technologies—a great step for the industry and possibly a giant leap for environmental protection and citizens’ health.

In 2007, the United States and the European Union initiated a drive to reduce or eliminate WTO tariffs on clean energy technologies. Progress on this initiative depends in part on the outcome of the Doha Round of negotiations.

Numerous nontariff barriers to trade exist within European and Asian markets that effectively restrict U.S. exports and prevent meaningful U.S. industry market penetration.

China and other countries consider the establishment of a renewable energy manufacturing base to be a national priority and can be expected to maintain a variety of non-tariff trade barriers and investment restrictions to protect their domestic producers. In numerous consultations with energy industry companies, the Office of Energy and Environmental Industries identified many barriers to U.S. companies doing business overseas. Among them are:

For additional information on this report, please contact the Office of Energy and Environmental Industries at (202) 482-5225.


Full Environmental Industries Assessment 2010.pdf



Updated April, 2010


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