Top Markets: Key Findings and Methodology

This “Top Markets Report” supports the efforts of the ETWG by identifying and ranking export markets
where focusing finite government resources will have the greatest impact in terms of increasing
commercial opportunities for U.S. companies. This report distills market forecasts and quantitative
assessments into overall market scores that rank export markets relative to three critical traits: first,
markets that are large and growing in absolute terms; second, those that have a defined and increasing
need for imported technology and services; and third, those where U.S. exports are lower than expected
based on markets with similar characteristics. This last component indicates that policy and trade
barriers might exist, and where U.S. government intervention on behalf of U.S. exporters would be most

The rankings are filtered further to adjust for mature markets that are large and open to U.S. products
and services and that boast relative ease of doing business overall. For the purposes of this report, these
markets are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Iceland,
Ireland, Italy, Japan, Luxembourg, Netherlands, New Zealand, Norway, Portugal, Spain, Sweden,
Switzerland, and the United Kingdom. The result of this analysis is a list of large and growing markets
where the scope of opportunity for American companies is restricted by the presence of policies or
other barriers to exports. These are the markets where U.S. government initiatives aimed at reducing
trade barriers and promoting exports have the highest potential for impact. These markets and their
environmental subsectors are scored on a scale from zero to 100, with 100 being the highest score in
the Composite Environmental Technologies ranking. Utilizing these scores, readers can assess the
relative contribution of a given market’s subsectors to its composite score and can compare both
subsectors and composite scores across markets. (See Figure 2 for a visual representation of the top 25
markets, with the top 10 highlighted in dark blue. See Appendix I for the full rankings list and Appendix
II: Methodology for a detailed description of this report’s methods.)
The next step is a qualitative assessment of opportunities and challenges in the top 10 ranked markets.
Industry and market experts collaborated on this effort to define the scope of opportunity for U.S.
companies, as well as to identify barriers and obstacles that should be addressed by the U.S.
government. This analysis leads to the identification of programmatic and policy remedies best suited to
address both the challenges and opportunities in these critical markets. This suite of programs forms a
nexus of trade promotion and policy interventions that are mutually reinforcing. By considering both
promotion opportunities and policy barriers in this context, and by developing a holistic response, this
report serves as a strategic guide to drive interagency coordination for promoting exports of U.S.
environmental goods and services.

How to Understanding Global Environmental Markets?

Before a government strategy to address the opportunities and challenges to environmental technology
exports can be developed, a common definition of the environmental technology industry must be
established. This is particularly important for environmental technologies, since the term could include
any permutation of goods and services that might fall under the nebulous category of being
environmentally friendly or beneficial. In practice, producers of environmental technologies have a clear
definition for their sector. From an industry perspective, environmental technologies are defined as all
industrial goods and services that:

  1. Foster environmental protection and physical resource efficiency in industrial settings;
  2. Generate compliance with environmental regulations;
  3. Prevent or mitigate pollution;
  4. Manage or reduce waste streams;
  5. Remediate contaminated sites;
  6. Design, develop and operate environmental infrastructure; and
  7. Afford the provision and delivery of environmental resources.

Environmental technologies generally are categorized by the three environmental mediums they are
designed to protect or provide: water, air, and soil.

Water, Wastewater and Industrial Water
The water medium category addresses the water and wastewater treatment subsector with key
segments being municipal drinking water delivery and treatment, municipal wastewater conveyance and
treatment, ground and surface water remediation, industrial process water treatment, and industrial
wastewater treatment. U.S. industry revenue in the water and wastewater treatment subsector in 2017
was $162.4 billion. This figure includes analytical services, wastewater treatment services, consulting
and engineering, equipment and chemicals, instruments and information systems, and utilities. [1]
Municipal drinking water treatment and delivery, municipal wastewater conveyance and treatment, and
ground and surface water remediation are distinct from industrial water treatment. The former deals
mostly with public-sector clients concerned with provision of water for human consumption and use and
the protection of water as an ecological and social resource. The public utility aspect of these markets
generally translates into a low degree of market flexibility and innovation due to a relatively higher
regulatory burden that is applied to protect human health.
Alternatively, industrial process and wastewater (sometimes called “produced water”) speak to water’s
value as an economic input for a variety of industries. Industrial water treatment solutions typically are
more diverse and sophisticated than municipal treatment systems and are usually higher on the value
chain for generating revenue for suppliers. The cost and complexity of treatment technologies are
dependent on the quality of water needed for specific industrial processes, the contaminants
introduced, and the regulatory requirements placed on industrial effluents, i.e., water released back into
the environment.

Key Market Trends and Themes for the Global Water Industry

Zero Liquid Discharge, Reuse and Resource Recovery
Water scarcity, increasing costs of fresh water for industrial uses, and growing costs to meet stringent
effluent discharge regulations are driving a trend toward Zero Liquid Discharge (ZLD). ZLD applies a
process-tailored suite of advanced treatment technologies – such as evaporators, brine concentrators,
and crystallizers – to treat industrial effluent to a high degree of purity for reuse. Companies employing
ZLD systems produce no effluent, and thereby avoid effluent permitting and regulatory costs altogether.
ZLD is a rapidly expanding technology suite utilized in industrial settings, especially in the power
generation, oil and gas, and chemicals industries. ZLD also provides companies with extracted organic or
mineral solids, which can be reused on sighton-site to produce energy or as a potential manufacturing
input that can be sold on the open market.
In the municipal sector, there is a trend toward resource recovery, where wastewater treatment plants
recover and use or sell energy, organic solids, minerals, and nutrients. These facilities are now referring
to themselves as water resource recovery facilities (WRRF) rather than wastewater treatment plants.
Growing technology areas for WRRFs include nutrient recovery and anaerobic digestion with combined
heat and power.

The deployment of smart water technologies is being driven by the growing trend toward improved
water pricing, efficiency, and conservation and loss. Smart water technologies include systems that
automate monitoring and metering, treatment, distribution, loss, and leakage. These ‘smart’
components include a suite of automation and monitoring technologies that are linked into a network
that includes human interfaces and controls.
In utility and industrial settings, smart water is governed by supervisory control and data acquisition
(SCADA) systems. Consumer-sector interfaces can take the form of any combination of smart meter and
consumption management technologies, including web-enabled versions for personal mobile devices.

Climate Adaptation
Climate vulnerability is forcing utilities to fundamentally rethink how they move, treat, and store water
and wastewater products. Climate vulnerability poses three major challenges to water service providers:
(1) disruption of service resulting from infrastructure failures caused by severe weather events such as
hurricanes; (2) combined sewer overflow due to increased frequency and severity of precipitation
events; and (3) water shortages caused by prolonged drought.
Climate concerns are leading to a paradigm shift in the configuration of water infrastructure and in how
water is managed. New investments are being made in modular and mobile systems for emergency
response; evaporation prevention technologies; water storage systems; groundwater recharge systems;
storm water management; smart metering for billing and automated shutoff systems; and a slew of
adaptive technologies for treatment processes with increased durability and the ability to treat variable
rates of flow and volumes.

Public Private Partnerships (PPPs)

PPPs in water infrastructure are typically defined as an arrangement between the government and a
private entity (often an Engineering, Procurement, and Construction (EPC) firm or private operator). In
these arrangements, a private entity invests in partial or whole ownership of a capital development
project or utility service in exchange for a share of tariff revenue. There is no standard model for how
PPPs are structured to handle the division of capital, service responsibilities, project and asset risk, and
revenue sharing. PPPs can therefore range from basic operations concessions to “Build-Own-Operate”
models where the private entity is the wholesale owner of the water infrastructure and utility service.
PPP projects are growing rapidly throughout the world. Governments turn to PPPs to address funding
gaps for infrastructure projects, to provide more efficient service to consumers, and to defray project
and asset risks. Businesses find PPPs to be lucrative long-term investments where tariff rates are
optimized, and tariff avoidance is low. The scope of opportunity for PPPs rests in the quality and
consistency of the rate payer; the government’s ability to create incentives for PPP projects through
balancing risk and financial incentives; and the private sector’s willingness to navigate a complex
contractual system of asset and revenue ownership and operation and transfer to maximize profitability.

Air Pollution Control

The air medium category deals with air pollution monitoring and control technologies for both
stationary and mobile pollution sources. Stationary sources include emissions from thermal energy
generation and industrial sources such as boilers, incinerators and smelters. Mobile sources include
everything from automobiles to heavy duty vehicles to ships.
Monitoring technologies make up a substantial segment of the industry, including instrumentation and
software required for public applications that monitor ambient air quality. This segment includes
industrial and fence-line monitoring systems and software that assess specific industrial sites and
applications, as well as fence-line monitors for trans-boundary sources. U.S. industry revenues for air
pollution control in 2017 totaled $20.7 billion, including equipment, instruments, and attendant
Air pollution control technologies are determined by the scale of emissions and types of pollutants that
need to be captured. Large emitters, such as concrete producers and coal-fired power plants, deploy
systems that are the size of a city block and cost millions of dollars to install and operate. Smaller
operations, such as those attached to medical incinerators, have a substantially lower emissions
footprint and cost profile. Mobile sources – including marine diesel engines, non-road diesel engines and
automobile engines – are primary examples of scale-driven systems based on unit pricing. An example of
a scalable control technology is the catalytic converter in passenger vehicles.

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