What Has Been the Progress and Growth of the Carbon Credit Market in Recent Years?
The carbon credit market has seen considerable growth due to a variety of factors.
• In the recent past, the size of the carbon credit market has witnessed massive expansion. It is projected to elevate from $526.32 billion in 2024 to $694.62 billion in 2025, growing at a compound annual growth rate (CAGR) of 32.0%.
Such robust growth in the historic period can be ascribed to global climate pacts, corporate social responsibility (CSR) initiatives related to renewable energy, forest conservation efforts, reforestation, and projects for reducing emissions.
How Does the Forecast Look for the Carbon Credit Market?
The carbon credit market is expected to maintain its strong growth trajectory in upcoming years.
• The size of the carbon credit market is projected to witness substantial growth in the coming years, with the expectation to reach $1891.27 billion by 2029, at a compound annual growth rate (CAGR) of 28.5%.
The projected increase during the forecast period is attributed to the investments in climate finance, the extension of cap-and-trade systems, universal carbon pricing initiatives, and the decrease in supply chain emissions. Key trends expected to shape the forecast period include carbon credit offset schemes, investment inflows into carbon market projects, integration with corporate strategies, the use of blockchain technology for transparency, and nature-based solutions.
What Are The Leading Drivers Of Growth In The Carbon Credit Market?
The escalation in the need to mitigate global carbon emissions is anticipated to be a thrust for the growth trajectory of the carbon credit market. Carbon emissions, which are releases of carbon dioxide and other gases containing carbon into the atmosphere, trap heat from the sun, causing earth warming. They allow monetary incentives for corporate bodies to lessen their emissions through the creation of carbon credits for carbon emissions. This aids the environment by deducting carbon from the atmosphere, promoting a straightforward structure to curtail emissions, and strengthens economies through sustainable activity investments. For instance, an October 2022 report from the United Nations Framework Convention on Climate Change, a US-based global entity, suggests that CO2 emissions need to be reduced by about 45% by 2030, aiming to limit the global temperature increase to 1.5 degrees Celsius by this century's end. The suggested emission reductions would need to be roughly tenfold, from 1 to 2 billion tons annually. Hence, the burgeoning need to lessen global carbon emissions is anticipated to boost the carbon credit market's growth.
Carbon Credit Market Driver: A surge in Transport Pollution Propelling the Carbon Credit Market
How Are The Segments Defined Within The Global Carbon Credit Market?
The carbon credit market covered in this report is segmented –
1) By Type: Compliance, Voluntary
2) By Project Type: Avoidance Or Reduction Projects, Removal Or Sequestration Projects
3) By End-Use: Power, Energy, Aviation, Transportation, Buildings, Industrial, Other End-Uses
Subsegments:
1) By Compliance: Regulated Carbon markets, Cap-And-Trade Programs
2) By Voluntary: Voluntary Carbon markets, Project-Based Offsets
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How Are Emerging Trends Reshaping The Dynamics Of The Carbon Credit Market?
Leading companies in the carbon credit market are working on novel approaches like blockchain-driven solutions to enhance their customer service delivery. One such blockchain-integrated solution is a system designed to address specific issues or upgrade existing procedures using blockchain technology. For example, Ernst & Young Global Limited, a company based in the UK offering professional services, introduced EY OpsChain ESG in May 2023. It is a blockchain-integrated solution aimed at enabling transparency in emissions and carbon credit tracking via tokenization. Built on the Ethereum platform, it offers a concrete perspective on CO2 emissions which is beneficial for companies striving to precisely trace and monitor their carbon footprint. This solution promotes transparency for customers, business peers, and regulating authorities, leading to more informed decisions on environmental, social, and corporate governance (ESG). Adhering to the InterWork Alliance for Carbon Emissions Tokens standard, EY OpsChain ESG allows businesses to validate the legitimacy of the carbon offsets they employ to decrease their environmental damage. EY OpsChain ESG was initiated based on the idea that blockchains could potentially act as a link connecting corporate functions and global ecosystems beyond organizational boundaries.
Who Are the Key Players In The Carbon Credit Market?
Major companies operating in the carbon credit market report are:
• NRG Energy Inc.
• Atos SE
• WGL Holdings Inc.
• Sterling Planet Inc.
• AltaGas Ltd.
• EKI Energy Services Limited
• Aker Carbon Capture AS
• South Pole Group AG
• Base Carbon Inc.
• ClimatePartner Gmbh
• Bluesource LLC
• 3 Degrees Inc.
• Carbon Care Asia Limited
• Sustainable Travel International Inc.
• Cool Effect Inc.
• NativeEnergy Inc.
• Carbonbetter Inc.
• ClimeCo Corporation
• Tasman Environmental Markets Pty Ltd.
• Carbon Credit Capital LLC
• Carbonfund.org Foundation Inc.
• Clearsky Climate Solutions LLC
• Climate Impact Partners LLC
• ClimateTrade Inc.
• Climetrek Ltd.
• Finite Carbon Corporation
• Forest Carbon Ltd.
• Moss Earth LLC
• NatureOffice Gmbh
• Terrapass Inc.
What Is The Most Dominant Region In The Carbon Credit Market?
North America was the largest region in the carbon credit market in 2024. The regions covered in the carbon credit market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa
