The Global Carbon Credit Market is estimated to be valued at US$ 25.35 Bn in 2023 and is expected to exhibit a CAGR of 24.4% over the forecast period from 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
The Global Carbon Credit Market is driven by the increasing adoption of sustainable practices across various industries. Carbon credits are a key component of emissions trading schemes, which aim to reduce greenhouse gas emissions. These credits represent a reduction of one metric ton of carbon dioxide or its equivalent gases. They can be bought and sold in the international carbon market and are used by companies to offset their own emissions. The major players in the market include WGL Holdings, Inc., Enking International, Green Mountain Energy, Native Energy, Cool Effect, Inc., Clear Sky Climate Solutions, Sustainable Travel International, 3 Degrees, terrapass, and Sterling Planet, Inc.
The Global Carbon Credit Market is driven by two main factors. Firstly, there is a growing awareness among businesses and individuals about the impact of carbon emissions on the environment. Companies are taking proactive measures to reduce their carbon footprint and offset their emissions through the purchase of carbon credits. This is driving the demand for carbon credits in the market.
Additionally, governments around the world are implementing stricter regulations and policies to combat climate change and reduce emissions. This is creating a favorable regulatory environment for the carbon credit market, as companies are required to comply with emissions reduction targets. As a result, there is a growing demand for carbon credits from industries such as energy, manufacturing, transportation, and agriculture.
The global carbon credit market can be segmented based on type, application, and region.
In terms of type, the market can be divided into certified emission reductions (CER), verified emission reductions (VER), and others. Currently, the CER segment dominates the market. This is primarily due to the high demand for CERs from industries that need to comply with carbon reduction targets set by regulatory bodies. CERs offer a transparent and internationally recognized certification process, which makes them a preferred choice for carbon credit buyers. Additionally, CERs are widely accepted under various carbon trading schemes, further supporting their dominance in the market.
Political: The political landscape plays a significant role in the carbon credit market. Governments worldwide are implementing stricter regulations and targets to reduce greenhouse gas emissions. This encourages companies to invest in carbon credits to offset their carbon footprint and avoid penalties.
Economic: The economic factors influencing the carbon credit market include the cost of carbon credits, availability of funding for carbon projects, and the overall economic growth of countries. Increasing global awareness about climate change and sustainability is driving the demand for carbon credits, leading to market growth.
Social: Social factors such as consumer awareness and public perception of environmentally friendly practices influence the carbon credit market. Consumers are increasingly seeking out companies that demonstrate their commitment to reducing carbon emissions, which drives the demand for carbon credits.
Technological: Technological advancements play a crucial role in the carbon credit market. Innovations in monitoring and verification technologies make it easier to track and measure carbon emissions. These technologies improve the accuracy and transparency of carbon projects, boosting confidence among buyers and sellers in the market.
The Global Carbon Credit Market Demand is expected to witness high growth, exhibiting a CAGR of 24.4% from 2023 to 2030. This growth is primarily driven by increasing government regulations and targets to reduce greenhouse gas emissions. The market is also influenced by growing consumer awareness and demand for environmentally friendly practices.
In terms of regional analysis, North America is the fastest-growing and dominating region in the global carbon credit market. The region’s strong commitment to sustainability and stringent environmental regulations contribute to its market dominance. The United States, in particular, plays a significant role in the market due to the presence of key players and large-scale carbon reduction projects.
Key players operating in the carbon credit market include WGL Holdings, Inc., Enking International, Green Mountain Energy, Native Energy, Cool Effect, Inc., Clear Sky Climate Solutions, Sustainable Travel International, 3 Degrees, terrapass, and Sterling Planet, Inc. These companies are actively involved in carbon credit trading, project development, and consulting services, contributing to market growth and innovation.