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 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

The global carbon offset/carbon credit market is estimated to grow from USD 414.8 Billion in 2023 to USD 1,602.7 Billion by 2028; it is expected to record a CAGR of 31.0% during the forecast period. Increasing investments in carbon capture technologies and solutions along with the rise in projects that are helping communities and creating social impact, is expected to drive the market.

“EU ETS: The largest segment of the carbon offset/carbon credit compliance market, by type “

Based on type, the carbon offset/carbon credit market has been categorized into the voluntary market and the compliance market. The compliance market, on the other hand, has been sub segmented into EU ETS (Emission Trading Scheme), California Cap and Trade, and others. The EU ETS is a cap-and-trade system i.e., organizations are only allowed to emit a certain amount of emissions, and they can trade allowances (EUAs), the ETS equivalent to carbon credits, with each other.

“Avoidance/Removal projects segment is expected to emerge as the largest segment based on project type”

Avoidance offset are generated from activities that reduce emissions by preventing their release into the atmosphere. Carbon avoidance via direct carbon reduction measures directly reduce carbon footprint. Carbon avoidance via carbon offsets and direct carbon reduction measures improves air quality, protects ecosystems, and aids in climate change mitigation. The effectiveness of carbon avoidance depends on the type of project and reliability to execute. Carbon avoidance via direct carbon reduction measures is effective because it cuts emissions at their source.

“By End-User, the Transportation segment is expected to be the fastest growing market during the forecast period.”

Based on end-user, the transportation segment is expected to be the fastest-growing segment during the forecast period. Reducing transport emissions is a priority for some of the governments worldwide. Motor vehicles accounted for a tremendously large share in the CO2 emissions from transportation. Personal vehicles and commercial trucks averaged more CO2 emissions per passenger mile or ton-mile than most other modes of transportation. Hence, the market is expected to grow significantly during the forecast period.

Europe is expected to be the second fastest-growing region in the carbon offset/carbon credit market

Europe is expected to be the second fastest region in the carbon offset/carbon credit market during the forecast period. The market growth in Europe can be attributed to the rising focus on decarbonization with the increased investments in green technologies in the region. Also, pledges such as carbon-free-world in countries such as Norway, Iceland, Ireland, Switzerland, Sweden, and Denmark act as a driving force for the European carbon offset/carbon credit market.

Breakdown of Primaries:

In-depth interviews have been conducted with various key industry participants, subject-matter experts, C-level executives of key market players, and industry consultants, among other experts, to obtain and verify critical qualitative and quantitative information, as well as to assess future market prospects. The distribution of primary interviews is as follows:

By Company Type: Tier 1- 40%, Tier 2- 35%, and Tier 3- 25%

By Designation: C-Level- 35%, Director Levels- 25%, and Others- 40%

By Region: North America- 10%, Asia Pacific- 60%, Europe- 15%, RoW- 15%

Note: Others include product engineers, product specialists, and engineering leads.

Note: The tiers of the companies are defined on the basis of their total revenues as of 2021. Tier 1: > USD 1 billion, Tier 2: From USD 500 million to USD 1 billion, and Tier 3: < USD 500 million

The carbon offset/carbon credit market is dominated by a few major players that have a wide regional presence. The leading players in the carbon offset/carbon credit market are South Pole Group (Switzerland), 3Degrees (US), Finite Carbon (US), EKI Energy Services Ltd. (India), and NativeEnergy (US).

Research Coverage:

The report defines, describes, and forecasts the global carbon offset/carbon credit market, by type, project type, end-user, and region. It also offers a detailed qualitative and quantitative analysis of the market. The report provides a comprehensive review of the major market drivers, restraints, opportunities, and challenges. It also covers various important aspects of the market. These include an analysis of the competitive landscape, market dynamics, market estimates, in terms of value, and future trends in the carbon offset/carbon credit market.

Key Benefits of Buying the Report

High rate of adoption of carbon emission reduction strategies and execution of decarbonization initiatives to tackle climate change is a major driver for the carbon offset/carbon credit market.

Product Development/ Innovation: New projects have been developed and the companies can now invest in a bundle of different projects apart from single projects as these projects help generate multiple climate, social, and biodiversity benefits.

Market Development: The demand for quality carbon offset is high throughout due to the strong willingness of businesses to act on climate change and reduce their carbon emission to achieve the net zero targets. Project developers create and monetize carbon credits from a variety of activities, mostly nature based solutions such as forest conservation and afforestation. There is growing interest in offset credits generated from removal technologies such as direct air capture (DAC), carbon capture and storage (CCS), and bioenergy with carbon capture and storage (BECCS).

Market Diversification: South Pole Group developed solutions to bring climate action which means to reduce the greenhouse emission of every business. The companies are working towards calculation, compensation, and understanding the reduction of carbon footprint.

Competitive Assessment: In-depth assessment of market shares, growth strategies, and service offerings of leading players like South Pole Group (Switzerland), 3Degrees (US), Finite Carbon (US), EKI Energy Services Ltd. (India), and NativeEnergy (US) among others in the carbon offset/carbon credit market.