The uphill battle of the low-carbon supply chain

The battle to be an established supplier in the low-carbon supply chain has been a tough one, made harder through intense competition, costs and inflation, supply surplus and many other factors. A simple indicator of the health of a supply chain is the revenue development. As seen from the figure below, solar revenues have surged a great deal compared to just four years ago, but are now slowing down as oversupply in multiple sections of the supply chain have pulled prices down.

On the high-carbon side, suppliers to the upstream oil and gas industry are enjoying the orders brought in a few years ago, when the energy industry scrambled to meet demand through new oil and gas developments. Toplines have clearly improved and supply has tightened, giving many suppliers control over their prices and overall financial health. Even so, upstream suppliers will need to diversify to low-carbon energy sectors, or they will risk returning to a situation where there is limited demand and the exploration and production operators control the pricing.