Carbon Credit Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Carbon Credit Market is projected to experience substantial growth, rising from a valuation of USD 7.96 Billion in 2025 to USD 19.99 Billion by 2031, reflecting a Compound Annual Growth Rate (CAGR) of 16.59%. This market operates as a trading system where entities acquire tradable certificates that signify the removal or avoidance of one metric ton of carbon dioxide equivalent, used to offset their specific emissions. The expansion of this sector is primarily driven by strict government regulations enforcing compliance and a growing strategic dedication among private corporations to meet Net Zero sustainability goals. Highlighting the significant financial scale of these instruments, the World Bank reported that global carbon pricing revenues hit a record USD 104 billion in 2024, demonstrating their widespread adoption within the global economy.

However, the market faces a major obstacle concerning the integrity and verification of credit quality. Widespread apprehension regarding greenwashing and the lack of a unified global standard for measuring additionality create uncertainty that deters institutional investment. This absence of standardized transparency complicates the validation process and frequently leads to price volatility, thereby hindering the broader acceptance of carbon credits as a dependable mechanism for climate mitigation.

Market Drivers

The accelerating momentum of corporate carbon neutrality and net-zero commitments is fundamentally transforming demand dynamics within the sector. Major conglomerates are increasingly embedding sustainability into their core operations to mitigate reputational risks and satisfy investor pressure, making the procurement of high-quality offsets a central component of their transition strategies. According to the Net Zero Tracker’s "Net Zero Stocktake 2024" from September 2024, the number of Forbes Global 2000 companies with net zero targets rose by 23 percent compared to the previous year. This surge in voluntary pledges compels companies to seek verified credits for residual emissions that cannot be immediately eliminated, thereby stabilizing demand against economic fluctuations and ensuring continuous capital flow into decarbonization projects.

Concurrently, the expansion of government-mandated cap-and-trade systems provides a regulated framework that enforces industrial compliance and facilitates price discovery. These compliance markets are evolving from isolated pilot programs into robust regional mechanisms that limit total emissions while allowing for the trading of allowances. The International Carbon Action Partnership noted in its April 2024 report, "Emissions Trading Worldwide: 2024 Status Report," that 36 emissions trading systems are currently in force, covering approximately 18 percent of global greenhouse gas emissions. The rigidity of these statutory requirements guarantees a baseline volume of trading activity that supports the voluntary sector, as evidenced by LSEG data indicating that the value of traded global carbon markets reached a record 881 billion Euros in the year preceding 2024.

Market Challenges

The lack of unified global standards and recurring issues regarding the verification of credit quality present a significant barrier to the expansion of the Global Carbon Credit Market. When buyers face uncertainty about the legitimacy of carbon removal or avoidance claims, they often delay or withdraw investment to avoid reputational risks associated with greenwashing. This absence of consistent validation protocols creates a volatile trading environment where accurate price discovery becomes difficult, thereby discouraging large-scale institutional participation.

Consequently, this lack of confidence directly reduces market liquidity and lowers trading volumes. According to Ecosystem Marketplace, the annual value of the voluntary carbon market contracted to USD 723 million in 2024 for the preceding year, a sharp decline attributed largely to buyer caution regarding project quality and methodology. This reduction in financial turnover illustrates that without transparent and standardized mechanisms to ensure additionality, the market remains vulnerable to skepticism. The inability to guarantee credit quality leads to hesitant buyer behavior, directly stalling the momentum necessary for the sector to mature.

Market Trends

A shift toward high-durability carbon removal credits is fundamentally altering product preferences within the market. Buyers are increasingly prioritizing projects that sequester carbon for centuries, such as direct air capture and biochar, to mitigate greenwashing risks and ensure long-term climate impact. This transition is evident in the surging demand for engineered solutions that offer verifiable permanence despite their higher price point. According to CDR.fyi’s "2024 Year in Review" from February 2025, the global purchased volume of high-durability carbon removal credits reached nearly 8 million tonnes in 2024, signifying a move away from low-quality avoidance schemes toward asset classes that provide definitive geological or biological storage.

Simultaneously, the operationalization of trading mechanisms under Article 6 of the Paris Agreement is establishing a robust framework for international compliance trading. This trend enables countries to exchange Internationally Transferred Mitigation Outcomes (ITMOs) to meet their Nationally Determined Contributions, creating a new layer of sovereign demand that complements voluntary corporate purchasing. The rigorous authorization processes required for these trades are setting higher benchmarks for credit integrity and transparency across the broader ecosystem. According to a September 2025 update by Latham & Watkins regarding Singapore's implementation agreements, the Singaporean government announced contracts for 2.175 million tonnes of Article 6-compliant credits, underscoring the emerging role of bilateral implementation agreements in driving cross-border liquidity.

Key Players Profiled in the Carbon Credit Market

• Indigo Ag Inc.
• Climetrek
• Carbon Credit Capital, LLC
• Terra Global Capital, LLC
• South Pole
• Cargill, Incorporated.
• Yara International ASA
• EcoSoul Partners
• Bayer AG
• 3Degrees

Report Scope

In this report, the Global Carbon Credit Market has been segmented into the following categories:

Carbon Credit Market, by Application:

• Removal Project
• Avoidance Project
• Combination Project

Carbon Credit Market, by Project Type:

• Forestry and Land Use
• Agriculture

Carbon Credit Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Carbon Credit Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

This product will be delivered within 1-3 business days.