CHICAGO, April 6, 2023 /PRNewswire/ -- Carbon Offset/Carbon Credit Market is projected to reach USD 1,602.7 billion in 2028 from USD 414.8 billion in 2023 at a CAGR of 31.0% according to a new report by MarketsandMarkets™. The Carbon Offset/Carbon Credit Market growth has been attributed to the rising global warming and the need to remove the carbon from the atmosphere. The market is driven by factors such as growing compliance requirements and regulatory schemes across the regions.
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Browse in-depth TOC on "Carbon Offset/Carbon Credit Market"
145 - Tables
39 - Figures
191 - Pages
Carbon Offset/Carbon Credit Market Scope:
Report Coverage |
Details |
Market Size |
USD 1,602.7 billion in 2028 |
Growth Rate |
31.0% of CAGR |
Largest Market |
Europe |
Market Dynamics |
Drivers, Restraints, Opportunities & Challenges |
Forecast Period |
2023-2028 |
Forecast Units |
Value (USD Billion) |
Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
Segments Covered |
by type, project type, end-user, and region |
Geographies Covered |
Asia Pacific, North America, Europe, RoW |
Report Highlights |
Updated financial information / product portfolio of players |
Key Market Opportunities |
Rising financial support to local communities |
Key Market Drivers |
Rise in partial use of carbon credits by companies |
The forestry and land use in voluntary market, by type, is expected to grow at the highest CAGR during the forecast period.
Based on type, the Carbon Offset/Carbon Credit Market has been categorized into the voluntary market and the compliance market. The voluntary market has been further sub-segmented into forestry and land use, renewable energy, waste disposal, chemical processes/industrial manufacturing, energy efficiency/fuel switching, and others. Forestry and land use, includes afforestation, reforestation, revegetation, and forest management. Out of the total offset generated, forestry and land use occupy the maximum share. Forest projects are in widespread development today for use in carbon offset markets as nature-based solutions have broad societal and environmental co-benefits.
The technology-based segment in removal/sequestration projects, by project type, is expected to be the fastest segment during the forecast period
Removal/sequestration projects are segmented into nature-based and technology-based projects. In the coming decades, carbon removal is expected to gain significant importance as the companies get closer to their net-zero targets. Once net zero is achieved, all new residual emissions must be neutralized with carbon removals and hence is a driver for the market during the forecast period. Carbon dioxide removal technologies include direct air capture, bioenergy with carbon capture and storage, biochar, and others. Advancements in various carbon dioxide removal technologies through research and development and government policies are major drivers for this market. The support from businesses, landowners, and the general public to implement such technologies is expected to boost market growth during the forecast period.
Europe is expected to be the largest region in the Carbon Offset/Carbon Credit Market
Europe is expected to be the largest 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.
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Carbon Offset/Carbon Credit Market Dynamics:
Drivers:
- Growing need to reduce global warming and carbon emissions
- Rise in partial use of carbon credits by companies
- Increasing investments in carbon capture technologies
Restraints:
- Restoration of carbon emissions from one location to another
Opportunities:
- Increasing number of regulatory requirements and industry association standards
- Rising financial support to local communities
Challenges:
- Fluctuating prices of carbon credits
Key Market Players:
Some of the major 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) to boost their position in the carbon offset market. Companies operating in this market also focus on product launches, agreements, and contracts to increase their market shares and expand their geographic presence.
Recent Developments
- In November 2022, 3Degrees partnered with Merge Electric Fleet Solutions to provide actionable analysis and decades of expertise to existing and new fleet customers. 3Degrees will monetize Merge's charging in the clean fuels states (CA, OR, WA) and offset all EV charging with RECs.
- In August 2022, Johnson Controls collaborated with 3Degrees to accelerate the race to net zero. The collaboration fast-tracks net zero goals through carbon reduction services.
- In August 2022, Siemens Smart Infrastructure and South Pole partnered to offer a full range of solutions and financing models for companies to reduce energy-related emissions.
- In August 2021, South Pole partnered with Landcare NSW, to develop climate action projects across New South Wales, Australia. The partnership brings together South Pole's global and local expertise as a project developer with Landcare NSW's strong community network, creating opportunities for Landcare members across the whole state via the range of carbon and biodiversity project options available.
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