Global Forestry Carbon Market Overview 2024

The carbon market for agriculture, forestry, and land use has seen rapid growth, increasing from $4.5b in 2023 to $5.8b in 2024, with a CAGR of 28.9%. The market is projected to reach $16.14b by 2028, growing at a CAGR of 29%.

Despite growing demand, significant policy and philosophical divisions impede progress: the debate between carbon removal and avoidance; preference for nature-based or technology-based projects; and the equitable distribution of benefits to local communities. Voluntary carbon markets and forest carbon credits faced criticism in 2023 when the public admitted that more than 90% of carbon credits from a set of forest conservation projects didn't have a real impact. Some companies rejected its plans for carbon initiatives.

Nevertheless, a decrease in the issuance of REDD+ credits, driven by increased scrutiny in the REDD+ space, overall issuance and retirement levels have remained generally stable in the first half of 2024. REDD+ still dominates the NBS market with more than 50%, while IFM and ARR are in second and third place. The Integrity Council of Voluntary Carbon Markets (ICVCM) and the Voluntary Carbon Markets Integrity Initiative (VCMI), to restore trust and transparency in carbon markets.

19 companies specializing in deforestation and afforestation related to carbon credit projects got investments from 1 January to 25 October 2024 from 11 countries. The large sum got Brazil VC Mombak for reforestation projects from the World Bank.

Top REDD+ project developers are American CarbonCo and Wildlife Works Carbon, and Indonesian company Rimba Makmur Utama. Top ARR project developers are Germany BaumInvest, UK Human Forest, Canadian Taking Roots, Indonesian PLN (Persero) and Chinese Sichuan Furong Group's Ltd. Indian EKI is a top developer of IFM projects, initiating REDD and ARR as well. Columbian CO2CERO implements both REDD+ and ARR projects.

Companies from the energy sector like Shell, Eni and Primax Colombia, Chevron, and Civitas Resources have retired the most credits in 2024, which aligns with the previous year. In 2024 a total of 275 major buyers are from 36 countries representing 19 verticals. The biggest number of companies are from the US (consumer goods, finance, software and technology, energy industries), the UK (consumer goods and services, finance, aviation and industrial), Germany (consumer goods and services, industrial and auto), and Sweden (consumer goods and finance).

The average carbon credit prices in the voluntary carbon markets have shown signs of stabilizing in the first half of 2024, after a clear downward trend that persisted through 2023. As of October 2024, the average price for REDD was $6.2, for IFM - $21.42, and for ARR - $14.14.