Carbon Offset Market - Global Industry Size, Share, Trends, Opportunities, and Forecast, 2018-2028, Segmented By Type (Carbon Compliance Market, Voluntary Carbon Market), By Project Type (Natural Offsets, Technological Offsets), By End-User (Power, Energy, Aviation, Transportation, Industrial, Buildings, and Others), By Region and Competition
Published Date: December - 2024 | Publisher: MIR | No of Pages: 320 | Industry: Power | Format: Report available in PDF / Excel Format
View Details Buy Now 2890 Download Sample Ask for Discount Request CustomizationCarbon Offset Market - Global Industry Size, Share, Trends, Opportunities, and Forecast, 2018-2028, Segmented By Type (Carbon Compliance Market, Voluntary Carbon Market), By Project Type (Natural Offsets, Technological Offsets), By End-User (Power, Energy, Aviation, Transportation, Industrial, Buildings, and Others), By Region and Competition
Carbon offset market is expected to grow at a robust rate during the forecast period. The carbon-offsets market has evolved rapidly, inducing high interest from investors and corporates. The rapidly rising CO2 emissions have surged the need for carbon offsets. CO2 emissions impacts human health, climate, human respiratory system, and the environment negatively. These negative impacts have surged the need for carbon offsets to compensate for the emission of greenhouse gases, such as carbon dioxide, methane, nitrous oxide, hydrochlorofluorocarbons (HCFCs), hydrofluorocarbons (HFCs), and ozone. The supportive government initiatives, such as the Carbon Farming Initiative (CFI) will further aid to surge the demand for voluntary carbon offsets. All this will further fuel the market growth during the forecast period.
There is no distinction between the phrases, carbon offset and carbon offset credit. In general, a carbon offset refers to a decrease in GHG emissions or an increase in carbon storage (such as through land restoration or tree planting), that is used to make up for emissions that happen somewhere else. A carbon offset credit is a transferable asset that has been verified by governments or independent certifying organisations to reflect a decrease in emissions equal to one metric tonne of CO2 or another GHG.
Carbon Offset MarketDrivers & Trends
Shifting from Reduction and Avoidance to Removal
Now, programs that seek to avoid or reduce atmospheric carbon dioxide emissions account for 82% of the market for offsets.
From Nature to Technology
The main goal of nature-based carbon offset initiatives is to lower emissions caused by deforestation and forest degradation. Although it is difficult to gauge their effectiveness, they serve as an important stopgap measure until there is no more land found at for reforestation or until nations enact laws that are more aggressive in protecting existing forests and natural systems. But after 2030, technological approaches to carbon removal are more likely to prevail over those based on the environment. In fact, after 2030, most well-known net-zero models will rely on technology-based removal, with upwards of 5 gigatons of carbon dioxide removed annually by 2050. The implementation of new renewable technologies, stopping or capturing methane leakage from the production of fossil fuels, mining, landfills, or livestock, replacing wood-burning stoves with clean cookstoves, capturing carbon dioxide directly from the air, and storing captured carbon from emission sources and permanently storing it underground are just a few examples of tech-based offset projects.
Increasing CO2 Emissions
The tremendous growth in CO2 emissions, which have harmed both the environment and human health, has increased the need for voluntary carbon offsets. Voluntary carbon offsets are the go-to strategy to reduce greenhouse gas emissions since the resulting climate change and air, water, and soil pollution have caused an increase in respiratory ailments. Furthermore, the encouraging government initiatives to cut greenhouse gas emissions are anticipated to increase demand for voluntary carbon offsets and fuel market expansion over the course of the forecast period. However, the adoption of verified emission reductions (VERs) and compliance emission reductions (CERs) as alternatives to voluntary carbon offsets may slow the market's expansion.
Increasing Environmental Concerns and Focus on Reducing Carbon Footprints
- Businesses are attempting to adapt their business
models to be more sustainable, and they are becoming more and more
concerned with lowering their carbon footprints. For instance, in August
2019, the Business Roundtable, a group made up of CEOs from major US
corporations, vowed to update the definition of a corporation and
challenge the conventional wisdom that says a company's goal is to
maximize profits for its owners or shareholders. The executives also
concurred that businesses must protect the environment "by embracing
sustainable practices."
- Owing to this, major enterprises are increasingly
focusing on reducing their environmental impact. Similarly, major
enterprises are looking to adopt sustainable solutions across the world
are positively impacting the market.
- Companies are putting sustainability at the heart
of their business model and scrutinize its future viability.
- Promoting environmentally friendly methods by
enterprises as part of the business is proven to attract new customers who
want to buy products and services from an environmentally friendly
business. Apart from this, various government regulations are forcing
businesses to manage their carbon footprints, thus positively impacting
the market demand for carbon offsets.
Carbon Offset MarketChallenges
Fluctuating Prices of Carbon Credits
The demand for carbon credits is expected to grow significantly in the coming decades. The voluntary offset market offers an opportunity to achieve global greenhouse emission reductions while addressing the development needs of developing countries. Involving developing nations in climate protection allows them to achieve carbon emission reduction and avoidance while earning revenues from selling their offsets. They can then use the money to pay for development initiatives for their nation's underprivileged neighborhoods. By protecting and restoring forests, grasslands, and other ecosystems, carbon projects aim to maximize nature's ability to combat climate change. The increased carbon storage can be measured and converted into carbon credits that top businesses and individuals can purchase to assist them in achieving their environmental objectives. The objective is to create bankable carbon programs that demonstrate their ability to offer conservation, community, and financial benefits to inspire others to adopt the strategy and, together, accomplish significant victories for the climate, biodiversity, and human way of life on a global scale.
Recent Developments
- In January 2022, UN Climate Change collaborated
with AirCarbon Exchange (ACX), the first completely digital carbon
exchange in the world, to promote carbon offsetting through emission
reductions that have been verified by the UNFCCC secretariat. Through the
partnership, clients of ACX from 30 different nations will be able to buy
and sell "Certified Emission Reductions" (CERs), which are
emission credits used for carbon offsetting. The UNFCCC Clean Development
Mechanism (CDM) registry that stores and tracks CERs, including their
retirement, will be the second exchange in the world and the first in Asia
to list CERs.
- Air Canada announced a collaboration with CHOOOSE
as the carrier's new supplier of a carbon programme in September 2022. The
airline's Canadian and US booking websites now seamlessly includes the
choice to buy verified carbon offsets.
- In accordance with Article 6 of the Paris
Agreement, the United Nations Development Programme (UNDP) and the
foundation for climate protection and carbon offset, KliK collaborated on
climate protection initiatives as of December 2022. In November 2022, a
Memorandum of Understanding (MOU) was signed that laid the groundwork for
obtaining ITMOs (Internationally Transferred reduction Outcomes) from GHG
reduction schemes created by UNDP in several partner nations. Compliant
with, the MOU, UNDP and the KliK Foundation are adhering to Article 6.2 of
the Paris Agreement to make sure the ITMO projects are supplementary to
assist the sustainable development of the host countries.
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Market Segments
Global carbon offset market is segmented into type, project type, end-user, and region. Based on type, the market is segmented into carbon compliance market and voluntary carbon market. Based on project type, the market is segmented into natural offsets and technological offsets. Based on end-user, the market is segmented into power, energy, aviation, transportation, industrial, buildings, and others. Based on region, the market is segmented into North America, Asia-Pacific, Europe, South America, and Middle East & Africa.
Market Players
Some of the major market players in the global carbon offset market are NativeEnergy, Inc., 3Degrees Group, Inc., Terrapass, EKI Energy Services Ltd., Ecologi, Climeworks AG, Climate Vault, Inc., Watershed Technology, Inc., ClearCompany, Inc., and Carbonfund.
|
Attribute |
Details |
|
Base Year |
2022 |
|
Historic Data |
2018 –
2022 |
|
Estimated Year |
2023 |
|
Forecast Period |
2024
– 2028 |
|
Quantitative Units |
Revenue in USD Million, and CAGR for 2018-2022 and 2023-2028 |
|
Report coverage |
Revenue
forecast, company share, growth factors, and trends |
|
Segments covered |
Type Project Type End-user Region |
|
Regional Scope |
North
America, Asia-Pacific, Europe, South America, Middle East & Africa |
|
Country Scope |
United States, Canada, Mexico, China, India, Japan, Indonesia,
South Korea, Germany, Italy, Poland, United Kingdom, France, UAE, Saudi
Arabia, South Africa, Brazil, Argentina, Chile |
|
Key Companies Profiled |
NativeEnergy, Inc., 3Degrees Group, Inc., Terrapass, EKI Energy
Services Ltd., Ecologi, Climeworks AG, Climate Vault, Inc., Watershed
Technology, Inc., ClearCompany, Inc., Carbonfund |
|
Customization Scope |
10% free report
customization with purchase. Addition or alteration to country, regional
& segment scope. |
|
Pricing and Purchase Options |
Avail
customized purchase options to meet your exact research needs. |
|
Delivery Format |
PDF and Excel through Email (We can also provide the editable
version of the report in PPT/Word format on special request) |
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