Voluntary Carbon Credit Market Size - By End Use (Agriculture, Carbon Capture & Storage, Chemical Process, Household & Community, Industrial & Commercial, Forestry & Land Use, Renewable Energy, Transportation, Waste Management) & Forecast, 2024 - 2032

Voluntary Carbon Credit Market Size

Voluntary Carbon Credit Market was valued at USD 2.4 billion in 2023 and is set to grow at a rate of over 27% through 2032. Expanding carbon pricing mechanism coupled with increasing demand for corporate sustainability initiatives backed by favorable government policies the major driving factors of business growth. 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.
 

Rising Demand for Nature-Based Solutions including reforestation, afforestation, and sustainable land management projects, are gaining prominence in the market. These projects sequester carbon and offer co-benefits like biodiversity conservation and ecosystem restoration. In addition, advancements in technology, particularly in data analytics and blockchain, are enhancing transparency and traceability in carbon credit trading. Blockchain, in particular, is being used to create immutable records of carbon credits, reducing the risk of double-counting or fraud, thereby fostering the business outlook.
 

Rising social & environmental impact along with increasing government policies & regulations will proliferate the business expansion over the coming years owing to investors and consumers placement of a premium on the social and environmental impact of carbon credit projects. Projects that deliver broader environmental and social benefits are attracting greater attention and investment. In addition, government policies, incentives, and regulations continue to shape the voluntary carbon credit market. The introduction of new policies and regulatory frameworks can have a profound impact on supply and demand dynamics.
 

COVID- 19 Impact

The COVID-19 pandemic created both challenges and opportunities for the voluntary carbon credit industry. While supply-side disruptions affected the generation and verification of carbon credits, demand-side dynamics were influenced by changing corporate priorities and heightened sustainability awareness. The long-term impact on the market depends on how organizations and consumers navigate the post-pandemic landscape and whether sustainability remains a central focus in recovery efforts.
 

Voluntary Carbon Credit Market Trends

The voluntary carbon credit industry is undergoing significant transformation, shaped by a range of dynamic trends. Corporations are making substantial sustainability commitments, driving increased demand for carbon credits to offset emissions. Nature-based solutions, including afforestation and reforestation, are gaining prominence, offering both carbon sequestration and ecological benefits. High-quality standards, such as the Verified Carbon Standard, are becoming essential, ensuring rigorous measurement and verification criteria.
 

Digitalization, particularly through blockchain technology, is enhancing transparency in the marketplace. Carbon credits are increasingly viewed as impact investments, attracting interest from environmentally-conscious investors. Financial institutions are integrating carbon credits into green finance and investment products.
 

Voluntary Carbon Credit Market Analysis

Based on end use, the forestry and land-use end use segment is set to grow at a CAGR of over 27.9% through 2032. The projects are emerging as pivotal players, where they are leading a paradigm shift in climate mitigation strategies. Afforestation and reforestation efforts are gaining prominence as they effectively sequester carbon while fostering biodiversity and ecosystem restoration. These projects, often referred to as "natural climate solutions," blend carbon sequestration with sustainable land practices and co-benefits, encompassing biodiversity conservation and community engagement. To ensure their quality, they adhere to stringent certification and verification standards such as the Verified Carbon Standard (VCS) and the Climate, Community & Biodiversity Standard (CCB).
 

Growing climate awareness among consumers and investors coupled with rising green initiatives across the globe will augment the industry landscape. Forestry and land-use projects that offer tangible climate and social benefits are attracting significant interest. In addition, their multifaceted approach, combining carbon sequestration with biodiversity conservation, community engagement, and sustainable land practices, makes them pivotal trends in the market.
 

Asia Pacific voluntary carbon credit market is estimated to expand at 31.5% CAGR between 2023 and 2032, driven by the region's growing role in climate mitigation and sustainability initiatives. Surge in renewable energy investments, particularly in solar and wind projects, leading to increased demand for renewable energy-based carbon credits. Afforestation and reforestation projects are gaining prominence as countries prioritize efforts to combat deforestation and restore ecosystems, generating carbon credits while aligning with global forest restoration goals.
 

Online platforms and marketplaces for voluntary carbon credits are gaining traction, making it easier for businesses and individuals to access and purchase credits. Evolving government policies related to carbon pricing and emissions reductions may further boost the demand for carbon credits. Collaborative projects involving multiple countries are demonstrating cross-border efforts to address climate change collectively, generating cross-border carbon credits.
 

Voluntary Carbon Credit Market Share

Eminent players across the industry are focusing on various strategic assets comprising innovative system range, merger & acquisition, robust research & development activities as a part of their strategic initiatives. Prominent industry players operating across municipal sludge dewatering equipment market include:

• The Carbon Trust
• Climate Impact Partners
• South Pole
• 3Degrees
• VERRA
• TerraPass
• CarbonClear
• Shell
• Microsoft
• PwC
• EcoAct
• ClimeCo LLC.
• Ecosecurities
• ALLCOT
• Atmosfair
• The Carbon Collective Company

Stakeholders in the voluntary carbon credit market often focus on other performance indicators, such as the number of certified projects, the volume of credits issued, the impact of projects on emissions reductions, and the adoption of high-quality standards like the Verified Carbon Standard (VCS) and the Gold Standard. In addition, market participants, including project developers and brokers, may have their own estimates of their share of the market based on the projects they manage and the volume of credits they transact.

Voluntary Carbon Credit Industry News

• In October 2023, Dubai-based company, Blue Carbon, and Zimbabwe join forces for a venture and environmentally impactful partnership through carbon credit partnership. The memorandum of understanding (MoU), valued at USD1.5 billion, represented a commitment to fund extensive forest protection and rehabilitation projects across Zimbabwe. It serves as a testament to the growing recognition of the carbon credit as a powerful tool in mitigating the impacts of climate change while fostering economic and ecological resilience.
   
• In October 2023, First Abu Dhabi Bank came into a strategic agreement with Masdar and Blue Carbon to supply carbon credits, a move that will boost the trading of emissions permits in the UAE. This strategic move is in alignment with the UAE's recently reinforced carbon emissions reduction targets for the current decade and its overarching objective of achieving climate neutrality by the year 2050. By facilitating the trading of emissions permits and actively participating in carbon credit initiatives, the UAE is making a strong commitment to address climate change on both a national and international scale.
   

This voluntary carbon credit market research report includes in-depth coverage of the industry with estimates & forecast in terms of ‘USD Million’ from 2019 to 2032, for the following segments:

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By End Use

• Agriculture
• Carbon Capture & Storage
• Chemical Process
• Household & Community
• Industrial & Commercial
• Forestry & Land Use
• Renewable Energy
• Transportation
• Waste Management

The above information has been provided for the following regions across the regions.

• North America
  • U.S.
  • Canada
  • Mexico
• Europe
  • France
  • Germany
  • Netherlands
  • Switzerland
• Asia Pacific
  • China
  • Taiwan
  • India
  • Bangladesh
  • Nepal
  • Indonesia
  • Thailand
• Middle East & Africa
  • Turkey
  • Kenya
  • Nigeria
  • South Africa
• Latin America
  • Brazil
  • Chile
  • Peru