Global Voluntary Carbon Credit Trading Market Size By Product (Energy industry, Household, Industrial), By Application (REDD Carbon Offset, Renewable Energy, Energy Efficiency), By End-User (Government Agencies, Private Companies), By Geographic Scope And Forecast

Voluntary Carbon Credit Trading Market Size And Forecast

Voluntary Carbon Credit Trading Market size was valued at USD 2.97 Billion in 2024 and is projected to reach USD 31.81 Billion by 2031, growing at a CAGR of 34.5% from 2024 to 2031.

• Voluntary carbon credit trading is a market mechanism in which organizations, businesses, and people can acquire carbon credits to offset their greenhouse gas emissions voluntarily. Each carbon credit reflects the decrease or removal of one metric ton of carbon dioxide (CO2) or its equivalent in other greenhouse gases from our atmosphere. This trading mechanism operates outside of government mandates, allowing participants to take proactive efforts to combat climate change while also improving their sustainability profiles. Voluntary carbon markets play an important role in promoting projects such as reforestation, renewable energy, and energy efficiency, among others.
• Voluntary carbon credit trading seems promising, owing to increased awareness of climate change and the need for sustainable activities. As more firms commit to net-zero goals, the market for carbon credits is projected to increase dramatically. Technological developments in monitoring, reporting, and verification (MRV) are projected to increase the openness and efficiency of carbon markets, resulting in greater participation.
• Regulatory advancements may result in more uniform processes and robust frameworks, thereby increasing the credibility of voluntary carbon trading. As businesses and governments seek innovative ways to fulfill climate targets, the voluntary carbon market will evolve and expand, creating new opportunities for investment and collaboration.

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Global Voluntary Carbon Credit Trading Market Dynamics

The key market dynamics that are shaping the global voluntary carbon credit trading market include:

Key Market Drivers:

• Corporate Net-Zero Commitments: According to the Science Based Targets Initiative (SBTi), over 4,200 enterprises from 95 countries have pledged to achieve net-zero emissions by 2023. According to McKinsey & Company, this surge is predicted to produce a 15-fold increase in demand for carbon credits by 2030, potentially valuing the market at USD 50 Billion.
• ESG Investment Pressure: The growing emphasis on Environmental, Social, and Governance (ESG) factors among investors has fueled the growth of carbon credit trading, with Bloomberg Intelligence reporting that global ESG assets surpassed USD 35 Trillion in 2020 and are expected to exceed USD 50 Trillion by 2025, accounting for more than one-third of total global assets under management. This increased focus led to a 40% increase in voluntary carbon credit retirements in 2022 over the previous year.
• Regulatory Support and Carbon Pricing: Government policies that favor carbon pricing mechanisms have bolstered the voluntary carbon market, as highlighted in the World Bank’s State and Trends of Carbon Pricing 2023 report, which reveals that 70 carbon pricing initiatives were implemented worldwide, accounting for approximately 23% of global greenhouse gas emissions. As a result, the average price of voluntary carbon credits increased from $3 per ton in 2020 to more than $4 per ton by 2022.

Key Challenges:

• Lack of Standardization: The absence of consistent standards and methods for measuring, reporting, and certifying carbon credits causes quality variations. Without standards, buyers may struggle to trust the legitimacy of carbon credits, impeding market expansion. This uncertainty may make corporations hesitant to invest in carbon credits, limiting the market’s growth.
• Transparency Issues: Limited openness in carbon credit projects might lead to buyer uncertainty about the true impact of their purchase. When the mechanisms behind carbon credits are unclear, it raises the possibility of fraud or greenwashing, which may destroy market confidence. This lack of trust may discourage potential investors, reducing the total demand for carbon credits.
• Dependence on Voluntary Participation: Carbon credit trading is voluntary; therefore, market growth is primarily contingent on a firm commitment to sustainability. If economic conditions change or corporations prioritize short-term financial advantages above long-term environmental goals, demand for carbon credits may fall. This reliance leaves the market sensitive to shifts in business priorities, potentially impeding its growth.

Key Trends:

• Increased Corporate Commitments: As more corporations commit to net-zero emissions targets, demand for carbon credits rises as organizations attempt to offset unavoidable emissions. This trend is being driven by stakeholder pressure and regulatory requirements, leading firms to invest in carbon credits to improve their sustainability credentials and meet climate goals. The urgency of climate action continues to drive firms to rapidly participate in voluntary carbon markets.
• Growing Interest in Nature-Based Solutions: Nature-based solutions (NbS), such as reforestation and afforestation projects, are gaining popularity as carbon offsets. These projects not only trap carbon, but they also have other ecological benefits, such as biodiversity conservation and habitat restoration. As consumers and investors appreciate the importance of sustainable land management methods, they are more prone to support NbS projects, increasing demand for carbon credits.
• Collaboration and Partnerships: Partnerships between corporations, non-governmental organizations (NGOs), and governments to promote carbon credit initiatives are becoming increasingly prevalent. Collaborative endeavors can result in the development of large-scale projects, increasing efficiency and lowering costs. These collaborations not only promote information sharing but also encourage investment in carbon credit projects, resulting in increased market activity and growth.

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Global Voluntary Carbon Credit Trading Market Regional Analysis

Here is a more detailed regional analysis of the global voluntary carbon credit trading market:

Europe:

• Europe has consistently been a dominant player in the voluntary carbon credit trading market. The EU’s comprehensive regulatory structure has produced tremendous market momentum. The EU Emissions Trading System (ETS) presently covers 40% of the EU’s greenhouse gas emissions, bringing carbon prices to between €80-90 per ton in 2023, with the European Climate Foundation projecting a rise to €120-150 per ton by 2030. This price increase causes a spillover effect, increasing demand for voluntary carbon credits.
• Europe’s violent climate ambitions have stimulated market growth, with the EU aiming for a 55% reduction in emissions from 1990 levels by 2030. In 2022, European corporations accounted for 47% of global voluntary carbon credit purchases, totaling €2.8 billion. The Climate Action Network Europe predicts that demand for carbon credits will triple by 2025 as businesses align their plans with the EU Green Deal objectives.
• The early adoption of carbon trading in Europe has resulted in a robust trading infrastructure, as indicated by a 235% rise in trading volumes from 120 million ton to 402 million ton of CO2 equivalent between 2020 and 2023. Bloomberg New Energy Finance predicts that the European voluntary carbon market value will reach €7.5 billion by 2027, owing to increased corporate net-zero commitments and regulatory requirements.

Asia Pacific:

• The Asia-Pacific region is emerging as the fastest-growing voluntary carbon credit trading market, owing to three important drivers. Sustained economic growth has resulted in significant demand for carbon offsets, with the Asian Development Bank estimating that the region’s carbon credit trade volume will reach 323 million tons of CO2 equivalent in 2022, up 175% from 2020. Commercial environmental consciousness has driven market growth. The Carbon Credit Trading Association of Asia (CCTA) reports a stunning 280% increase in business participation in voluntary carbon markets between 2020 and 2023, with more than 1,500 significant companies actively trading carbon credits. According to McKinsey research, demand for voluntary carbon credits among Asian enterprises is likely to quintuple by 2030, driven by net-zero promises from more than 800 significant corporations in the region.
• Supportive government policies are propelling market development, with 12 Asia-Pacific countries implementing or planning carbon pricing initiatives totaling approximately 3.4 gigatons of CO2 equivalent, with China aiming to establish the world’s largest carbon market by 2025, with an annual trading volume of 1 billion ton of CO2 equivalent.

Global Voluntary Carbon Credit Trading Market: Segmentation Analysis

The Global Voluntary Carbon Credit Trading Market is Segmented on the basis of Product, Application, End-User, And Geography.

Voluntary Carbon Credit Trading Market, By Product

• Energy industry
• Household
• Industrial
• Agriculture

Based on Product, the market is bifurcated into the Energy industry, Household, Industrial, and Agriculture. The energy industry is currently the dominant segment, owing to its high greenhouse gas emissions and continuous shift to renewable energy sources. This sector accounts for a sizable share of carbon credit trades, as businesses seek to offset their emissions and comply with regulatory frameworks. The agriculture industry is the fastest-growing segment, owing to increased knowledge of sustainable practices and the need to reduce emissions from agricultural activities. As more agricultural firms embrace carbon farming practices and participate in carbon credit trading, this market is likely to increase fast, reflecting a growing awareness of agriculture’s role in climate change mitigation.

Voluntary Carbon Credit Trading Market, By Application

• REDD Carbon Offset
• Renewable Energy
• Landfill Methane Projects
• Energy Efficiency

Based on Application, the market is segmented into REDD Carbon Offset, Renewable Energy, Landfill Methane Projects, and Energy Efficiency. Renewable energy is the leading component, as it provides a major source of carbon credits as the world transitions from fossil fuels to cleaner energy sources. Wind, solar, and hydroelectric power projects cut greenhouse gas emissions while also producing trading carbon credits, drawing significant investment. The fastest-growing sector  is REDD (Reducing Emissions from Deforestation and Forest Degradation) programs, which are being driven by increased global awareness of the necessity of forest protection and sustainable land management. As governments and organizations increasingly acknowledge the crucial role trees play in carbon sequestration and biodiversity, involvement in REDD programs is projected to rapidly increase.

Voluntary Carbon Credit Trading Market, By End-User

• Government Agencies
• Non-Governmental Organizations (NGOs)
• Private Companies

Based on End-User, the market is segmented Government Agencies, Non-Governmental Organizations (NGOs), and Private Companies. Private companies dominate the market, owing to an increase in corporate net-zero commitments and sustainability activities. These corporations actively participate in carbon offset programs to reduce emissions and improve their corporate social responsibility profiles, creating a considerable market for carbon credits. Non-Governmental Organizations (NGOs) are the fastest-growing segment, as they play an important role in coordinating and promoting carbon offset programs, notably reforestation and community-based activities. As public awareness of climate change increases and the need for good environmental stewardship grows more urgent, NGOs are extending their engagement in the voluntary carbon market.

Voluntary Carbon Credit Trading Market, By Geography

• North America
• Europe
• Asia Pacific
• Rest of the World

On the basis of Geography, the Global Voluntary Carbon Credit Trading Market is classified into North America, Europe, Asia Pacific, and the Rest of the World. Europe has long been a leader in the voluntary carbon credit trading market, due to its robust legislative framework, ambitious climate goals, and early adoption of carbon markets. Asia-Pacific is the fastest growing area, due to economic prosperity, increased awareness of climate change, and supportive government policies.

Key Players

The “Global Voluntary Carbon Credit Trading Market” study report will provide valuable insight with an emphasis on the global market. The major players in the market are Ecosecurities, BioCarbon Partners, Combio Energia, Carbon Clear, CBEEX, Bioassets, South Pole Group, Aera Group, Green Trees, WayCarbon, Carbon Credit Capital, Allcot Group, and Forest Carbon. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Our market analysis also entails a section solely dedicated to such major players wherein our analysts provide an insight into the financial statements of all the major players, along with product benchmarking and SWOT analysis. The competitive landscape section also includes key development strategies, market share, and market ranking analysis of the above-mentioned players globally.

Voluntary Carbon Credit Trading Market Recent Developments

• In February 2024, Microsoft signed an agreement with BTG Pactual Timberland Investment Group (TIG) to commit 8 million carbon reduction credits. The company has agreed to buy 40,000 agricultural soil carbon credits from Indigo AG.
• In June 2023, RVCMC announced that it had successfully sold over 2.2 million tons of carbon credits at the largest-ever voluntary carbon credit auction event in Nairobi, Kenya.

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