PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1290810
PUBLISHER: AnalystView Market Insights | PRODUCT CODE: 1290810
Carbon Offset/ Carbon Credit Market size was valued at USD 408,100.3 million in 2022, expanding at a CAGR of 28.7% from 2023 to 2030.
While carbon offsets can represent the removal of greenhouse gases, carbon credits typically represent a reduction in greenhouse gas emissions. Typically, cap-and-trade systems, in which governments cap the amount of carbon emissions that particular companies are allowed to emit, are associated with carbon credits. Companies who go over their allotments must purchase more credits to raise their cap. On the other hand, carbon offsets are exchanged on the voluntary market and consist of projects that reduce greenhouse gas emissions, such as renewable energy and carbon sequestering.
Companies are investing a lot of time and money on decolonization as the globe advances towards net zero targets. A comprehensive economic transition is typically necessary to address climate change. The companies' focus on net zero aims and efforts to cut carbon emissions will cause a large increase in the market for carbon credits in the ensuing decades. The authorization to emit greenhouse gases equal to one tone of carbon dioxide is represented by a carbon credit. Now that many companies are embracing this strategy of only partially using carbon credits, it is greatly helping them. They are participating in initiatives and actions that are assisting them in producing offsets.
With the potential demand for carbon credits that could result from efforts to reduce greenhouse gas emissions on a worldwide scale, it is clear that the world needs a big, open, verifiable, and environmentally sound voluntary carbon market.
The Global Carbon Offset/ Carbon Credit Market is segmented based on type, project, end-user, and Region.
Based on the project, the removal/sequestration projects segment is expected to dominate the market during the forecast period. Projects for removal and sequestration are divided into those based on nature and those based on technology. As businesses move closer to their net-zero goals, carbon removal is anticipated to become increasingly important over the next few decades. All new residual emissions after net zero must be offset by carbon removals, which will drive the market during the forecast period. Technologies for removing carbon dioxide include direct air capture, biochar, and bioenergy with carbon capture and storage, among others. Government policies and research and development advancements in various carbon dioxide removal technologies are the main market drivers. During the forecast period, market growth is anticipated to be boosted by support for such technologies from businesses, landowners, and the general public.
Europe is expected to capture the significant market share during the forecast period. The increased emphasis on decarbonization along with increased expenditures in green technology in the region is responsible for the market expansion in Europe. For instance, according to the EEA, the EU's net emissions were 34% lower in 2020 than they were in 1990. Implementing the energy and climate policies and initiatives now planned at the national level might result in a net emissions reduction of 41% by 2030, according to the most recent national predictions. To attain the 55% net reduction objective, the additional policies suggested in the European Commission's "Fit for 55" climate package have not yet been taken into account in these predictions. Therefore, more emission cuts are required, which could push the EU closer to the 55% goal by 2030 and to climate neutrality by 2050. Thus, this is expected to drive the growth of the market in the region.
In May 2022, a Nature-Based Solutions carbon credit futures contract (the "NBS future") has been introduced, according to Intercontinental Exchange, Inc., a major provider of data, technology, and market infrastructure worldwide.
The scope of this report covers the market by its major segments, which include as follows: