Compliance Carbon Credit Market Size

Compliance Carbon Credit Market Size

Compliance Carbon Credit Market was valued at USD 101.4 billion in 2023 and is set to grow at a 14.7% CAGR between 2024 and 2032, owing to the expansion of carbon pricing mechanisms and the growing demand for corporate sustainability initiatives, supported by favorable government policies. For instance, in October 2023, Government of India announced that the country has 1,451 projects registered or under various stages of consideration at the world’s two leading carbon registries, which will complement the industry scenario.

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The increasing demand for nature-based solutions such as reforestation, afforestation, and sustainable land management projects is gaining recognition within the carbon credit market. These projects effectively capture carbon and provide additional benefits like safeguarding biodiversity and restoring ecosystems. In addition, technological advancements, especially in data analytics and blockchain, are elevating transparency and traceability in the trading of carbon credits. Blockchain is employed to establish unchangeable records of carbon credits, mitigating the risks of duplicate counting or fraudulent activities, thereby bolstering the prospects of the industry.

The increasing social and environmental significance, coupled with the growth of government policies and regulations, is expected to drive compliance carbon credit market expansion. This is primarily due to the growing emphasis placed by investors and consumers on the social and environmental impact of carbon credit projects. Projects that yield broader environmental and social advantages are gaining more recognition and investment. Furthermore, government policies, incentives, and regulatory measures continue to shape the carbon credit market. The introduction of new policies and regulatory frameworks can significantly influence the dynamics of supply and demand.