What Has Been the Progress and Growth of the Voluntary Carbon Credit Market in Recent Years?
The voluntary carbon credit market has seen considerable growth due to a variety of factors.
• The dimension of the voluntary carbon credit market has seen a massive expansion lately. Its size is predicted to leap from $1.55 billion in 2024 to $1.89 billion in 2025, marking a compound annual growth rate (CAGR) of 21.9%.
Factors like corporate social responsibility drives, preliminary regulatory systems, global climate accords, investor demands for sustainability, and carbon pricing plans have fueled growth during the previous years.
What Can Be Expected from the Voluntary Carbon Credit Market Size?
The voluntary carbon credit market is expected to maintain its strong growth trajectory in upcoming years.
• Expectations are high for the voluntary carbon credit market as predictions indicate a significant boom in the coming years. By 2029, it is anticipated to reach $4.13 billion, boasting a compound annual growth rate (CAGR) of 21.6%.
This projected growth during the forecast period is due to several factors, including the imposition of stringent carbon neutrality targets, mandatory climate disclosure laws, an escalating demand for eco-friendly products among consumers, increased corporate goals toward achieving net zero, and the involvement of carbon credits in investment portfolios. As we look to the forecast period, a few noteworthy trends are expected, including the inclusion of carbon credits in supply chains, a rise in involvement from developing economies, premium pricing for high-quality carbon credits, collaboration with indigenous communities, and the use of automated tools for carbon offset verification.
What Are the Critical Driver Fuelling The Voluntary Carbon Credit Market's Growth?
Expansion in the voluntary carbon credit market is expected due to an increasing demand for clean energy. Clean energy describes power derived from sources producing minimal environmental impact and almost zero greenhouse gases. Factors like environmental preservation, public health benefits, energy security, independence, and favorable policies and regulations are driving the demand for clean energy. This growing demand encourages investment in renewable energy sources resulting in carbon credit generation through reduced emissions. These credits enable businesses to balance their environmental impact, thereby enhancing the carbon market and encouraging the growth of green energy. For instance, according to the American Clean Power Association's Clean Power Annual Market Report issued in March 2024, 33.8 gigawatts (GW) of new utility-scale clean energy projects were installed in 2022, a 12.5% increase from a record set in 2021 in the US. Therefore, the increasing demand for clean energy is fueling the expansion of the voluntary carbon credit market.
How Is The Voluntary Carbon Credit Market segmented?
The voluntary carbon credit market covered in this report is segmented –
1) By Type: Forestry, Renewable Energy, Waste Disposal, Other Types
2) By Project Type: Removal Or Sequestration Projects, Avoidance Or Reduction Projects
3) By Application: Industrial, Household Devices, Energy, Agriculture, Other Applications
4) By End Use: Government Agencies, Non-Governmental Organizations (NGOs), Private Companies, Individuals
Subsegments:
1) By Forestry: Afforestation, Reforestation, Avoided Deforestation, Forest Management
2) By Renewable Energy: Wind Energy Projects, Solar Energy Projects, Hydropower Projects, Biomass Energy Projects, Geothermal Energy Projects
3) By Waste Disposal: Methane Capture From Landfills, Waste-To-Energy Projects, Composting Projects, Recycling And Circular Economy Initiatives
4) By Other Types: Blue Coastal and Marine Ecosystem Restoration (Carbon), Soil Carbon Sequestration, Carbon Capture and Storage (CCS), Biochar Projects
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Which Emerging Market Trends Are Altering The Voluntary Carbon Credit Industry?
Major companies operating in the voluntary carbon credit market are focusing on developing advanced solutions such as digital carbon credit sourcing to streamline carbon credit access, supporting companies' sustainability and emissions reduction efforts. Digital carbon credit sourcing refers to using online platforms and technologies to identify, purchase, and trade carbon credits, streamlining access to certified carbon offset projects. For instance, in September 2024, the ERM International Group Limited, a UK-based sustainability consultancy, launched the ERM Carbon Credit Portal designed to facilitate client access to the voluntary carbon market. This initiative aims to streamline the selection and purchasing process for carbon credits, enabling organizations to complement their greenhouse gas emissions reduction strategies effectively. The portal features pre-screened projects that allow users to evaluate climate benefits and associated risks, enhancing transparency and trust in the carbon credit procurement process. This launch is part of ERM's broader strategy to support corporate decarbonization efforts.
Who Are the Key Players In The Voluntary Carbon Credit Market?
Major companies operating in the voluntary carbon credit market are:
• Ambipar Group
• Rubicon Carbon
• South Pole
• EKI Energy Services Ltd.
• The Carbon Trust
• 3Degrees
• Climate Impact Partners
• Allcot Group
• Green Mountain Energy
• First Climate
• ClimeCo LLC
• Aera Group
• Forliance
• ComBio Energia
• BioCarbon Partners
• CarbonBetter
• Atmosfair
• NativeEnergy
• NatureOffice GmbH
• Carbon Credit Capital LLC
• Finite Carbon
• GreenTrees LLC
• Puro.earth
• Tasman Environmental Markets
• TerraPass
• CarbonClear
• BURN
What Is The Most Dominant Region In The Voluntary Carbon Credit Market?
North America was the largest region in the voluntary carbon credit market in 2024. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the voluntary carbon credit market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa.
