Carbon Offset Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, 2021-2031

The Global Carbon Offset Market is projected to expand from a valuation of USD 600.83 Billion in 2025 to USD 2.39 trillion by 2031, reflecting a CAGR of 25.96%. These tradeable instruments, which represent the reduction or removal of one metric ton of carbon dioxide equivalent, are utilized by organizations to counterbalance emissions that cannot be eliminated internally. The market is fundamentally propelled by the rise in corporate net-zero pledges and the broadening of government-mandated pricing schemes, both of which generate sustained demand for mitigation credits. Reflecting this regulatory expansion, the World Bank noted in 2024 that carbon pricing instruments had grown to cover approximately 24% of global greenhouse gas emissions.

Despite this growth, the sector faces significant hurdles regarding the verification and integrity of issued credits, which has sparked "greenwashing" concerns and eroded buyer confidence. This scrutiny over project quality has led to a measurable decrease in trading activity as stakeholders pause to await stronger governance standards. Consequently, Ecosystem Marketplace reported in 2024 that the total transaction value of the voluntary carbon market fell by 29% to $535 million, a decline directly attributed to these persistent market challenges.

Market Drivers

The enforcement of strict government environmental regulations and net-zero policies acts as a primary structural driver for the Global Carbon Offset Market. As nations operationalize their climate commitments, they are establishing compliance mechanisms that mandate emission reductions, thereby generating significant revenue and creating a baseline of demand for mitigation credits. This regulatory pressure compels high-emitting sectors to incorporate carbon pricing into their financial models, shifting the market from voluntary participation to legally binding obligations. In its 'State and Trends of Carbon Pricing 2024' report from May 2024, the World Bank highlighted that global revenues from carbon taxes and emissions trading systems hit a record USD 104 billion in 2023, confirming that carbon markets are becoming essential tools for regulatory adherence.

Concurrently, the increasing corporate adoption of ESG and sustainability frameworks is boosting demand for high-quality offsets to meet stakeholder expectations. Organizations are aggressively aligning with scientific decarbonization pathways, necessitating credits to compensate for residual emissions that internal abatement measures cannot yet resolve. According to the Science Based Targets initiative's 'SBTi Monitoring Report 2023' released in March 2024, the number of corporations with validated science-based targets rose by 102% in 2023. This surge in commitment drives physical demand for credits despite market valuation corrections; MSCI reported in 2024 that the volume of carbon credits retired in the voluntary market increased by 6% throughout 2023, underscoring the critical role of offsets in corporate strategies.

Market Challenges

The challenge surrounding the verification and integrity of issued credits is directly impeding the growth of the Global Carbon Offset Market by eroding the trust essential for trade. As scrutiny regarding "greenwashing" intensifies, corporate buyers have become increasingly risk-averse, often pausing procurement to avoid the reputational damage associated with low-quality projects. This hesitation has stalled market momentum as stakeholders pivot their focus entirely toward "high-integrity" credits; however, these assets are currently in extremely short supply, effectively freezing liquidity for the broader market that fails to meet these elevated expectations.

This supply-side bottleneck is clearly quantified by the scarcity of credits that qualify under new, stringent global standards. According to the Integrity Council for the Voluntary Carbon Market (ICVCM), the volume of credits approved under its Core Carbon Principles (CCPs) reached 51 million in 2025, representing only about 4% of the total issued market volume from 2024. This statistic indicates that the vast majority of existing inventory does not yet carry the high-integrity label buyers now demand, directly explaining the contraction in trading activity as corporations wait for a larger pool of verified and trustworthy credits to become available.

Market Trends

The operationalization of Article 6 trading mechanisms under the Paris Agreement is transforming market dynamics by creating a sovereign-backed compliance layer that integrates with voluntary activities. This trend is guiding the sector toward a cohesive global trading architecture where countries authorize credit transfers to meet Nationally Determined Contributions, thereby mitigating double-counting risks and enhancing asset validity. This regulatory clarity is accelerating government-to-government partnerships and establishing a new asset class of "correspondingly adjusted" credits that command higher confidence. According to the Florence School of Regulation's October 2025 report, 'Carbon Markets under Article 6 of the Paris Agreement', 97 bilateral agreements between 59 countries were adopted by March 2025, with 155 pilot projects recorded under Article 6.2.

Simultaneously, there is a strategic shift from spot market purchases to long-term offtake agreements, allowing buyers to hedge against price volatility and secure scarce high-quality inventory. Unlike the historic reliance on readily available spot credits, this procurement model involves multi-year forward contracts that finance project development upfront, particularly for capital-intensive engineered removal technologies. This structural evolution separates immediate liquidity from future supply security, enabling buyers to lock in prices for credits to be delivered years later. CDR.fyi reported in February 2025, in its '2024 Year in Review', that the total volume of durable carbon removal purchased grew by 78% to nearly 8 million tonnes in 2024 due to these forward commitments, while actual physical deliveries remained significantly lower at approximately 318,000 tonnes.

Key Players Profiled in the Carbon Offset Market

• NativeEnergy, Inc.
• 3Degrees Group, Inc.
• Terrapass
• EKI Energy Services Ltd.
• Ecologi Action Ltd.
• Climeworks AG
• Climate Vault, Inc.
• Watershed Technology, Inc.
• ClearCompany, Inc.
• Carbonfund

Report Scope

In this report, the Global Carbon Offset Market has been segmented into the following categories:

Carbon Offset Market, by Type:

• Carbon Compliance Market
• Voluntary Carbon Market

Carbon Offset Market, by Project Type:

• Natural Offsets
• Technological Offsets

Carbon Offset Market, by End-User:

• Power
• Energy
• Aviation
• Transportation
• Industrial
• Buildings
• Others

Carbon Offset Market, by Region:

• North America
• Europe
• Asia-Pacific
• South America
• Middle East & Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Carbon Offset Market.

Available Customization

The analyst offers customization according to your specific needs. The following customization options are available for the report:

• Detailed analysis and profiling of additional market players (up to five).

This product will be delivered within 1-3 business days.