Carbon Offset/Carbon Credit Market

Carbon Offset/Carbon Credit Industry - Forthcoming Trends to Fuel the Global Growth

The global carbon offset/carbon credit market is projected to reach USD 1,602.7 billion by 2028 from an estimated USD 414.8 billion in 2023, at a CAGR of 31.0% during the forecast period. The major factors driving the growth of this market include the rising awareness for reducing carbon emissions and the urge of companies to reach their net zero targets.

The carbon offset/carbon credit industry play a crucial part in reducing climate change by encouraging sustainable practices and offering incentives for reducing emissions.

Emerging Trends in the Global Carbon Offset/Carbon Credit Market are:

  • Increased Demand for Carbon Offsets
  • Growth of Voluntary Carbon Markets
  • Carbon Pricing Initiatives
  • Corporate Commitments to Emissions Reduction
  • Innovation in Offset Project
  • Consolidation and Standardization of the Market
  • Integration with Environmental, Social, and Governance (ESG) Investing

The carbon offset/carbon credit industry industry is quickly changing in response to the opportunities and challenges posed by climate change. The need for premium carbon offsets and creative offset projects is anticipated to keep rising as stakeholders place a greater emphasis on sustainability and emissions reductions.

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Increased Demand for Carbon Offsets:

  • Growing Awareness of Climate Change and the Need to Reduce Greenhouse Gas Emissions: As people strive to meet carbon neutrality or net-zero emissions targets, there is a growing demand from individuals, businesses, and governments for carbon offset/carbon credit.

Growth of Voluntary Carbon Markets:

  • Companies that choose to buy carbon offset/carbon credit as a way to offset their emissions are seeing a notable increase in the voluntary carbon market. Corporate sustainability objectives, ambiguous regulations, and businesses' desire to set themselves apart as environmentally conscious are the main drivers of this rise.

Carbon Pricing Initiatives:

  • To encourage the reduction of emissions, governments worldwide are putting in place carbon pricing mechanisms including carbon taxes and cap-and-trade programs. In these systems, carbon credits are essential because they give businesses the flexibility they need to comply with regulations and because they provide financial incentives to reduce emissions.

Corporate Commitments to Emissions Reduction:

  • As part of their sustainability programs, several firms are utilizing carbon offsets to supplement their efforts toward setting aggressive emissions reduction targets. Investor expectations, consumer pressure, and the realization that there are business risks related to climate change are the main forces behind this trend.

Innovation in Offset Project:

  • New approaches to carbon offset project development include energy efficiency programs, renewable energy projects, methane capture from agriculture and landfills, and carbon removal technologies like enhanced weathering and direct air capture. More funding and technological developments are propelling the creation of new offset project types with better environmental integrity and scalability.

Consolidation and Standardization of the Market:

  • As larger players buy out smaller offset project developers and carbon credit issuers, the carbon offset/carbon credit market is becoming more standardized. In an effort to improve the carbon offset market's openness, liquidity, and trustworthiness, standardization initiatives are also being developed, including uniform procedures, certification standards, and registration systems.

Integration with Environmental, Social, and Governance (ESG) Investing:

  • Investors are becoming more aware of ESG investing, taking into account sustainability policies and a company's carbon footprint when making investment selections. Companies are finding that using carbon offset/carbon credit is a crucial way to control their carbon risk and show that they adhere to ESG standards.

Related Reports:

Carbon Offset/Carbon Credit Market by Type (Voluntary Market, Compliance Market), Project Type (Avoidance/Reduction Projects, Removal/Sequestration Projects (Nature-based, Technology-based)), End-User and Region - Global Forecast to 2028

Carbon Offset/Carbon Credit Market Size,  Share & Growth Report
Report Code
EP 8607
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