Carbon Credits Global Market Report 2024

The carbon credits market size has grown exponentially in recent years. It will grow from $26.78 billion in 2023 to $33.8 billion in 2024 at a compound annual growth rate (CAGR) of 26.2%. The growth observed in the historical period can be attributed to the implementation of the Kyoto Protocol, the utilization of the Clean Development Mechanism (CDM), voluntary carbon offset programs, the promotion of renewable energy projects, and the emphasis on Corporate Social Responsibility (CSR) initiatives.

The carbon credits market size is expected to see exponential growth in the next few years. It will grow to $79.28 billion in 2028 at a compound annual growth rate (CAGR) of 23.8%. The anticipated growth in the forecast period can be attributed to commitments under the Paris Agreement, the implementation of carbon pricing mechanisms, global sustainability initiatives, the promotion of natural climate solutions, and the expansion of the voluntary carbon market. Major trends expected in the forecast period include the integration of blockchain technology, advancements in technology, the standardization of carbon credits, increased corporate participation, and technological innovations in monitoring processes.

The rise in global warming is anticipated to drive the expansion of the carbon credit market in the foreseeable future. Global warming refers to the prolonged increase in the Earth's surface temperature caused by human activities, predominantly the emission of carbon dioxide (CO2) and other greenhouse gases into the atmosphere. The escalating global warming issue is tackled through the utilization of carbon credits, which encourage and endorse endeavors aimed at reducing carbon dioxide and other greenhouse gas emissions. For instance, as of August 2023, Copernicus EU, a European provider of Earth observation data, reported that 2023 stands as the third warmest year to date, with a temperature 0.43 ºC above the recent average and a global average temperature in July exceeding preindustrial levels by 1.5 ºC. Moreover, in January 2022, the US National Oceanic and Atmospheric Administration (NOAA) revealed that Africa experienced a temperature increase of 1.33°C (2.39°F) in 2021 compared to the continent's average, with West and North Africa encountering an exceptionally warm year. Consequently, the surge in global warming is propelling the expansion of the carbon credit market.

The growing prominence of carbon capture and storage is poised to stimulate the carbon credit market's growth in the coming years. Carbon capture and storage (CCS) involve absorbing and transporting carbon dioxide (CO2) emissions from industrial sources before storing them in suitable subterranean locations. CCS enhances carbon credit production by capturing and storing carbon dioxide emissions from industrial sources, enabling the exchange of credits at a higher price. This contributes to the overall market value and fosters investment in CCS technology. For example, the Global CCS Institute reported in September 2022 that CCS projects in development had a combined capacity of 244 million metric tons per year (Mtpa) of CO2, representing a 44% increase from the previous year. Therefore, the growing adoption of carbon capture and storage is propelling the carbon credit market.

Fluctuations in carbon credit prices are anticipated to impede the growth of the carbon credit market. Price fluctuations in carbon credits impact the economic feasibility of emission-reduction programs. The volatility in prices affects investor confidence, project viability, and the overall attractiveness of carbon credits as a tool for carbon reduction. As per 8 Billion Trees in March 2023, carbon credit prices showed frequent changes, fluctuating by around 10% annually. Price variations are influenced by demand and availability, typically ranging between $40 and $80 per metric ton. Consequently, the fluctuations in carbon credit prices are hindering the growth of the carbon credit market.

Leading companies in the carbon credit market are concentrating on developing innovative technological solutions, such as the multi-activity carbon credit SaaS platform, to aid the world in achieving its decarbonization goals. A multi-activity carbon credit SaaS platform is a software solution generating high-quality carbon offsets from various mitigation activities using diverse data sources and technologies. For instance, in September 2023, CERO Technologies, an India-based software company, launched the digital Measurement, Reporting, and Verification (dMRV) platform, addressing market constraints, inefficiencies, and credibility issues. The platform accelerates carbon credit calculation and verification by interfacing with high-quality data, generating real-time high-quality carbon credits.

In December 2021, Freedom Holdings Corp., an investment banking company based in Kazakhstan, acquired Carbon Zero Asset Management Inc. for an undisclosed sum. This acquisition enables Freedom Holdings Corp. to fulfill its acquisition plans and add fintech companies to its portfolio, focusing on clean energy. It aims to offer ESG-driven technologies and carbon credit solutions in a multi-disciplinary approach. Carbon Zero Asset Management Inc. is a US-based carbon credit fintech company.

Major companies operating in the carbon credits market report are NRG Energy Inc., Atos SE, WGL Holdings Inc., AltaGas Ltd., Aker Carbon Capture AS, South Pole Group AG, ClimatePartner Gmbh, Bluesource LLC, 3 Degrees Inc., EKI Energy Services Limited, Sustainable Travel International Inc., Cool Effect Inc., NativeEnergy Inc., ClimeCo Corporation, Tasman Environmental Markets Pty Ltd., Carbon Care Asia Limited, Carbon Credit Capital LLC, Carbonbetter Inc., Carbonfund.org Foundation Inc., Clearsky Climate Solutions LLC, Climate Impact Partners LLC, ClimateTrade Inc., Climetrek Ltd., Base Carbon Inc., Finite Carbon Corporation, Forest Carbon Ltd., Moss Earth LLC, NatureOffice Gmbh, Sterling Planet Inc., Terrapass Inc.

Europe was the largest region in the carbon credits market in 2023. Asia-Pacific is expected to be the fastest-growing region in the forecast period. The regions covered in the carbon credits market report are Asia-Pacific, Western Europe, Eastern Europe, North America, South America, Middle East, Africa. The countries covered in the carbon credits market report are Australia, Brazil, China, France, Germany, India, Indonesia, Japan, Russia, South Korea, UK, USA, Canada, Italy, Spain.

Carbon credits, also known as carbon allowances, are permits that represent 1 ton of CO2e (carbon dioxide equivalent) that an organization is allowed to emit. These credits can be utilized by individuals or companies to offset their greenhouse gas emissions. The concept of carbon credits was developed to encourage the reduction of greenhouse gas emissions, providing a financial incentive for companies to minimize their carbon footprint.

The primary types of carbon credits are regulatory and voluntary. Regulatory carbon credits are issued under mandatory (compliance) schemes or voluntary programs. These schemes can include cap-and-trade systems and baseline-and-credit programs. Carbon credits are utilized across various sectors, including power, energy, aviation, transportation, industrial, buildings, and other industries.

The carbon credit market research report is one of a series of new reports that provides carbon credit market statistics, including carbon credit industry global market size, regional shares, competitors with a carbon credit market share, detailed carbon credit market segments, market trends and opportunities, and any further data you may need to thrive in the carbon credit industry. This carbon credit market research report delivers a complete perspective of everything you need, with an in-depth analysis of the current and future scenario of the industry.

The carbon credits market includes revenues earned by entities by ensuring the credibility and accuracy of emission reductions, voluntary emissions reduction credits, and additional environmental and social benefits. The market value includes the value of related goods sold by the service provider or included within the service offering. Only goods and services traded between entities or sold to end consumers are included.

The market value is defined as the revenues that enterprises gain from the sale of goods and/or services within the specified market and geography through sales, grants, or donations in terms of the currency (in USD unless otherwise specified).

The revenues for a specified geography are consumption values that are revenues generated by organizations in the specified geography within the market, irrespective of where they are produced. It does not include revenues from resales along the supply chain, either further along the supply chain or as part of other products.


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