Environmental Industries

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:

• analyzes international market trends;

• identifies export opportunities for American companies;

• disseminates trade leads to industry;

• counsels companies on export strategies;

• conducts a range of trade promotion activities;

• develops trade policy positions aimed at increasing free and fair trade;

• participates in trade negotiations and consultations; and

• advocates on behalf of U.S. exporters in particular transactions.

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 

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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

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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%

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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.

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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 climatefriendly 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: 

• Intellectual property protection,

• Preferential procurement,

• Lengthy or non-transparent project approval process,

• Central versus provincial government authority issues,

• Legal framework issues, 

• Regulatory framework issues,

• Lack of financing, 

• Limits on foreign equity ownership, 

• Lack of adequate energy infrastructure, and 

• Incompatible standards. 

For additional information on this report, please contact the Office of Energy and 

Environmental Industries at (202) 482-5225.

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Updated April, 2010

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