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Carbon Credit Market Trends

Report ID: GMI7048
Published Date: Oct 2023
Report Format: PDF

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Carbon Credit Market Trends

The growing need for carbon offsets, propelled by the increasing expectations placed on companies and governments to mitigate their carbon emissions, will enhance the industry's dynamics. This upsurge in demand enables organizations to offset emissions they are unable to internally reduce, thereby advancing their sustainability objectives. Nature-based solutions have gained prominence, with reforestation, afforestation, and sustainable land management projects assuming a prominent role. These initiatives not only sequester carbon but also provide additional benefits, including biodiversity conservation and ecosystem restoration.

Technological progress, notably in data analytics and blockchain, has improved the transparency and traceability of carbon credit trading. Blockchain technology is harnessed to establish unalterable records of carbon credits, reducing the potential for double-counting and fraudulent activities. The standards and certification programs for carbon credits, such as the Verified Carbon Standard (VCS) and the Gold Standard, are in a continuous state of development to preserve the quality and trustworthiness of these credits. Inter-industry collaborations are on the ascent, with companies from various sectors coming together to fund and advance carbon offset projects, nurturing partnerships aimed at collectively addressing emissions.

Authors: Ankit Gupta, Shashank Sisodia

Frequently Asked Questions (FAQ) :

The market valuation of carbon credit was surpassed USD 103.8 billion in 2023 and is expected to expand at over 14.8% CAGR from 2024 to 2032, driven by the expansion of carbon pricing mechanisms and the growing need for corporate sustainability initiatives, supported by favorable government policies.

Compliance carbon credit or carbon offset market is poised to expand at over 13.5% CAGR from 2023 to 2032, owing to the rising commitment of organizations to carbon neutrality along with voluntary pledges and mandatory compliance mandates.

Europe held over 76.1% share of the carbon credit industry in 2022 and is expected to grow at notable CAGR from 2023 to 2032, driven by the combination of regulatory measures, corporate commitment, and public pressure to promote carbon neutrality in the region.

Some leading carbon credit firms are The Carbon Trust, Climate Impact Partners, South Pole, 3Degrees, VERRA, TerraPass, CarbonClear, PwC, EcoAct, ClimeCo LLC., Ecosecurities, ALLCOT, The Carbon Collective Company, Sterling Planet Inc., WGL Holdings, Inc., and Green Mountain Energy Company.