Life Cycle Assessment (LCA) Software Market Size, Share & Industry Analysis, By Deployment (Cloud and On-premise), By Enterprise Type (Large Enterprises and Small and Medium Enterprises (SMEs)), By Application (Agribusiness, Consumer Goods, Food and Beverages, Construction, Packaging, Pharmaceuticals, and Others), and Regional Forecast, 2024-2032

The global life cycle assessment (LCA) software market size was valued at USD 202.7 million in 2023 and is projected to grow from USD 230.1 million in 2024 to USD 695.3 million by 2032, exhibiting a CAGR of 14.8% during the forecast period. Additionally, the U.S. life cycle assessment software market is predicted to grow significantly, reaching an estimated value of USD 185.0 million by 2032, owing to increasing focus on sustainability and the growing demand for more environmentally responsible products and operations

Life cycle assessment, also known as LCA, is a method used to find strategic opportunities for evaluating the environmental impacts of the existing products & services and manufacturing processes. An LCA software analyzes the release of toxic substances, the impact of the energy used, the use of natural resources, and other factors, and is engaged with all product life cycle phases - from the extraction of raw materials required to produce it until it is no longer utilized and discarded or reused. LCA is used as an environmental management tool that supports the understanding of the environment’s performance with respect to different production and consumption systems for comparative and improvement purposes.

Life cycle assessment software has been widely used across various fields, including energy sources, materials, construction, and transportation. This software is getting increasingly popular, especially in the consumer goods industry, as it helps cut down the environmental footprint, while helping businesses make more money by improving their innovation cycles, transparency, and efficiency.

The COVID-19 pandemic caused economic uncertainty and budget constraints for many organizations, reducing their investment in LCA software. It resulted in changes in consumer behavior, with individuals becoming more aware of the environmental impact of the products they purchase. This trend led to increased pressure on organizations to offer more sustainable products, which boosted the demand for life cycle assessment software for evaluating the environmental footprint of these products.

IMPACT of AI

Integration of AI with LCA Software Automate the Material Analysis Task to Boost Market Growth

Life Cycle Assessment (LCA) is an environmental tool that requires a large volume of data to measure the performance of a product and simulate the proposed scenarios to improve its performance. Integration of artificial intelligence (AI) techniques with LCA software helps support environmental tools based on the growing availability of data and information, data modeling, and aligning the concepts of data analysis. The usage of different AI algorithms along with LCA models helps build predictive models of machine learning to enable decision-making.

The combination of AI with a life cycle assessment tool helps develop an integrated valuable framework for the sustainable transport of fuels using a dynamic product lifecycle with a novel AI approach. Integration of AI with LCA also optimizes the design and manufacturing processes of sustainable building materials. The life cycle assessment of sustainable building materials is a method used to analyze the environmental impact of materials throughout their life cycle, from extraction to disposal. Similarly, using AI with LCA processes can automate repetitive tasks, interpretation, and data analysis, which can help estimate the durability and maintenance of different materials, reduce waste & energy consumption, and improve operational efficiency.

Life Cycle Assessment (LCA) Software Market Trends

Increasing Demand for Life Cycle Assessment Software in Consumer Goods to Fuel Market

Life cycle assessment software can be used in different ways within the consumer merchandise segment to assist organizations in making more feasible choices through their item lifecycles. The computer program analyzes the natural impacts of a few item plan alternatives, materials, and fabricating forms. This software helps organizations to reduce the natural impact on the product life cycle and aims to enhance their products' supportability.

In addition, the LCA computer program analyzes the characteristic influence on the supply chains, transportation, inventory of raw materials, and bundling of the product. This information can be utilized to recognize the zones of improvement, such as diminished emissions from transportation or sourcing materials from viable suppliers. The LCA tool helps to generate normal declarations that deliver clear and sound information about a product's sustainability and isolate it from competitors. For instance,

• In August 2022, Skullcandy, a provider of Stereo Headphones1 and True Wireless Earbuds2, launched its limited-edition Transparency Series to create visibility about the ecological impact of its product, while maintaining its commitment to carbon deduction.

It also helps organizations comply with environmental regulations and standards related to carbon emissions, energy efficiency, and waste reduction. Hence, consumers' and stakeholders' growing demand for sustainable products will fuel the life cycle assessment software market share.

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Life Cycle Assessment (LCA) Software Market Growth Factors

Integration of IoT with LCA Tools to Spur Market Growth

Several advantages can be associated with the integration of LCA software with Internet of Things (IoT), including the ability to collect precise and detailed environmental data, increase transparency, and improve supply chain efficiency. IoT-powered software can be used in real-time data collection, supply chain, product performance, and predictive monitoring.

The uses of IoT-integrated LCA software are mentioned below:

• Product performance monitoring: IoT sensors are integrated in products to monitor their performance and usage. They provide valuable insights about how they are used and how they can be improved to reduce environmental impact.


• Supply chain monitoring: IoT sensors monitor materials and products throughout the supply chain and deliver deep insights about the environmental impact of transportation, storage, and other processes.


• Real-time data collection: IoT sensors collect real-time information about a product's energy consumption, CO2 emissions, and other environmental impacts. Integrating IoT with LCA software provides accurate and up-to-date information about a product's environmental footprint.

• Predictive monitoring: IoT sensors provide organizations with predictive models that can detect environmental impacts before they occur, enabling them to take proactive measures to reduce their footprint.

Thus, the integration of IoT into LCA software will revolutionize environmental data collection and analysis, which can lead to the development of sustainable and efficient product designs and manufacturing processes.

RESTRAINING FACTORS

High Cost and Lack of Knowledge Expertise to Hinder Market Growth

Life cycle assessment software is expensive, particularly for smaller businesses or organizations with limited budgets, making it difficult for them to afford and conduct LCA studies. The software is complex and requires significant data and expertise to use effectively. This factor makes it difficult for small businesses to use and may require them to hire consultants to conduct LCA studies.

According to Roundup, there was a major decrease in the percentage of customers willing to spend on eco-friendly products in 2020 and 2021, with these two years recording 58% and 55% decline, respectively. This factor is expected to slow the adoption of life cycle assessment software.

Thus, the above-mentioned factors are expected to hamper the life cycle assessment software market growth during the forecast period.

Life Cycle Assessment (LCA) Software Market Segmentation Analysis

By Deployment Analysis

Cloud Dominated Market Owing to Its Scalability and Collaborative Features

Based on deployment, the market is segregated into cloud and on-premises.

The cloud deployment segment held the largest market share in 2023 and recorded the highest CAGR owing to its accessibility, scalability, and collaborative features. These features can allow users access to LCA tools and data from remote locations with an internet connection, and eliminate hardware requirements. Furthermore, cloud-based LCA software delivers integration capabilities with other sustainable tools and databases, enabling users to import and export data easily.

Some companies prefer on-premise solutions due to data privacy and security concerns. By hosting the software, organizations have more control over security measures. They can ensure compliance with their internal policies and regulatory requirements, which is anticipated to enhance the adoption of on-premises LCA software during the forecast period.

By Enterprise Type Analysis

Large Enterprises Held Largest Share Due to Rising Need for Sustainability Goals

On the basis of enterprise type, the market is segmented into large enterprises and Small and Medium Enterprises (SMEs).

The large enterprise segment held the largest market revenue share in 2022 due to significant sustainability objectives and commitments by organizations to diminish their environmental impact. Additionally, the demand for evaluating the environmental impacts of raw materials, transportation, and manufacturing processes is anticipated to fuel the product’s use in large organizations.

Small and Medium Enterprises (SMEs) segment is expected to record the maximum CAGR during the forecast period as they require a structured approach for assessing and improving their environmental performance while considering the life cycle impacts of their products and services.

By Application Analysis

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Construction Segment Dominates Market Due to Growing Need of Developing Sustainable Environment

Based on application, the market is divided into agribusiness, consumer goods, food & beverages, construction, packaging, pharmaceuticals, and others.

The construction segment holds the highest market share as LCA enables construction companies to make data-driven decisions, reduce their environmental impact, and contribute to a more sustainable environment.

The packaging segment is expected to record the highest CAGR due to the growing need to evaluate the environmental impacts of various products, such as plastic, paper, glass, and metal. This analysis aids packaging companies in making various decisions when selecting packaging materials with lower environmental footprints.

REGIONAL INSIGHTS

Geographically, the market is segmented into five key regions: North America, Europe, Asia Pacific, the Middle East & Africa, and South America. They are further categorized into countries.

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North America is estimated to dominate the market over the forecast period. The life cycle assessment software is mostly deployed during the product development stage in the automotive industry. Additionally, life-cycle concepts have been utilized by the U.S. state environmental protection agencies in their decision-making processes. Increasing focus on sustainability and the growing demand for more environmentally responsible products and operations are expected to boost the demand for LCA software in the region post-pandemic.

Europe is driven by the significant rise of Industry 4.0 and IoT. Moreover, Industry 4.0, a groundbreaking concept presented by the government and the Service for Financial Undertakings and Vitality (BMWI), highlights business models, item interconnection, digitization, and value chain. This will boost the use of life cycle evaluation software in savvy fabricating industrial facilities.

Asia Pacific is predicted to record the highest CAGR during the forecast period due to the presence of developing countries, their robust economic development, and growing sustainable and environmental advancements in the next few years. In addition, carbon labeling is a vital factor considered by the sustainability plans of various Asia Pacific countries, thereby expanding the demand for LCA software in the region.

South America and the Middle East & Africa are anticipated to register a normal growth rate as countries in these regions have recorded noticeable accomplishments over the past five years. The growing acceptance of digital technologies by both government and corporate segments, such as healthcare and agribusiness aims to increase the adoption of LCA software.

List of Key Companies in Life Cycle Assessment (LCA) Software Market

Major Companies to Focus on Developing Advanced Life Cycle Assessment Software to Strengthen Their Positions

Key market players are entering partnerships and collaborating with other players to streamline and expand their business offerings. These partnerships and collaborations will aid businesses in strengthening their product portfolios and expanding their reach to more customers. Key players, such as PRé Sustainability B.V., iPoint-systems GmbH, One Click LCA Ltd., Intertek Group plc, and others have adopted this strategy for better business growth. Furthermore, companies in the market are upgrading their existing solutions and creating new ones to expand their business and meet customer needs. They are adjusting the volume of R&D initiatives, product portfolios, mergers, acquisitions, and other development plans in response to a series of problems they suffered in 2020. These issues include demand swings, supply chain disturbance, and other problems.

Advancing product offerings will help businesses in developing environment-friendly and sustainable solutions. The enhancement and expansion of the current product portfolio will also help companies strengthen their position in the life cycle assessment software market.

List of Key Companies Profiled:

• Intertek Group plc (U.K.)


• PRé Sustainability B.V. (SimaPro) (Netherlands)


• Sphera (U.S.)


• iPoint-systems GmbH (Germany)


• One Click LCA Ltd. (Finland)


• EarthShift Global (U.S.)


• Ecochain Technologies B.V. (Netherlands)


• Sustainable Minds, LLC (U.S.)


• GreenDelta (Germany)


• Altermaker (France)

KEY INDUSTRY DEVELOPMENTS:

• November 2023: One Click LCA, a decarbonization platform provider for the construction and manufacturing industries, secured an investment of USD 43.8 million (EUR 40 million) from PSG Equity (PSG) and InfraVia Capital Partners (InfraVia). This investment will enhance the delivery of enterprise solutions and boost R&D with M&A across manufacturing and construction verticals.


• November 2022: Sphera, a global provider of life cycle assessment software, partnered with specialty materials supplier Eastman. Through this collaboration, Eastman sought to use Sphera's LCA automation solution to gain real-time insight and analysis of the environmental footprint of its product portfolio.


• November 2022: Teijin Limited formed a partnership with European carbon management professionals including GreenDelta GmbH, PRéSustainability B.V., and Minviro Ltd. This partnership was created to develop a new system to reduce Teijin's greenhouse gas (GHG) emissions during the product's life cycle.


• July 2022: EarthShift Global expanded its portfolio by developing new branding and communication services to help its clients benefit from their life cycle assessment software. The services included brand risk assessment, positioning, competitor intelligence, brand strategy, messaging, communicating technical results, and customer & market insights.


• March 2022: iPoint-systems formed a partnership with fors.earth. Through this partnership, both the companies aimed to support other firms to achieve positive results in their value chain by using a software-supported sustainability strategy.


• February 2022: Dassault Systems developed “Sustainable Innovation Intelligence,” a new life cycle assessment solution on the 3DEXPERIENCE Platform. This solution enables companies to reduce the environmental impacts of their materials, products, and processes to drive the circular economy.

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The report offers insights about prominent regions across the world to help the reader understand the market better. Further, it offers insights into the most recent market trends and analyzes technologies being implemented at a global level. The report also highlights some of the growth-stimulating factors and restraints, enabling the reader to gain a detailed understanding of the market.

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