Carbon Credit Global Market Opportunities and Strategies to 2034

This report describes and explains the carbon credit market and covers 2019-2024, termed the historic period, and 2024-2029, 2034F termed the forecast period. The report evaluates the market across each region and for the major economies within each region.

The global carbon credit market reached a value of nearly $526.31 billion in 2024, having grown at a compound annual growth rate (CAGR) of 23.80% since 2019. The market is expected to grow from $526.31 billion in 2024 to $1.44 trillion in 2029 at a rate of 22.32%. The market is then expected to grow at a CAGR of 21.05% from 2029 and reach $3.74 trillion in 2034.

Growth in the historic period resulted from increasing public awareness of climate change, regulatory frameworks and policy reforms, rising industrial emissions boosting carbon credit demand, and rising conservation of nature-based solutions (NBS). Factors that negatively affected growth in the historic period were the risk of greenwashing and litigation and unequal carbon prices.

Going forward, growing need to reduce carbon emissions, increasing investment by government, expansion of emissions trading schemes (ETS) and corporate net-zero and ESG commitments will drive growth. Factors that could hinder the growth of the carbon credit market in the future include impact of trade war and tariff, fraud and lack of integrity in offset projects and lack of standardization and coherence in credit quality.

Western Europe was the largest region in the carbon credit market, accounting for 39.07% or $205.62 billion of the total in 2024. It was followed by North America, Asia-Pacific and then the other regions. Going forward, the fastest-growing regions in the carbon credit market will be Asia-Pacific and Africa where growth will be at CAGRs of 27.68% and 25.91% respectively. These will be followed by Middle East and South America where the markets are expected to grow at CAGRs of 25.35% and 23.77% respectively.

The global carbon credit market is highly fragmented, with a large number of small players operating in the market. The top 10 competitors in the market made up 0.08% of the total market in 2024. Anthesis Group Ltd was the largest competitor with a 0.0141% share of the market, followed by ERM International Group with 0.0131%, South Pole with 0.0118%, Indigo Ag, with 0.0100%, BP p.l.c., with 0.0093%, Climate Impact Partners LLC with 0.0045%, 3Degrees Group inc. with 0.0044%, ClimatePartner Gmbh with 0.0044%, EKI Energy Services Ltd (EKI) with 0.0043% and ClimeCo LLC with 0.0041%.

The carbon credit market is segmented by type into compliance and voluntary. The compliance market was the largest segment of the carbon credit market segmented by type, accounting for 97.64% or $513.92 billion of the total in 2024. Going forward, the voluntary segment is expected to be the fastest growing segment in the carbon credit market segmented by type, at a CAGR of 50.23% during 2024-2029.

The carbon credit market is segmented by project type into avoidance or reduction projects and removal or sequestration projects. The avoidance or reduction projects market was the largest segment of the carbon credit market segmented by project type, accounting for 72.12% or $379.56 billion of the total in 2024. Going forward, the removal or sequestration projects segment is expected to be the fastest growing segment in the carbon credit market segmented by project type, at a CAGR of 29.25% during 2024-2029.

The carbon credit market is segmented by end-use into power, energy, aviation, transportation, buildings, industrial and other end-uses. The power market was the largest segment of the carbon credit market segmented by end-use, accounting for 32.36% or $170.32 billion of the total in 2024. Going forward, the industrial segment is expected to be the fastest growing segment in the carbon credit market segmented by end-use, at a CAGR of 24.89% during 2024-2029.

The top opportunities in the carbon credit market segmented by type will arise in the compliance segment, which will gain $832.2 billion of global annual sales by 2029. The top opportunities in the carbon credit market segmented by project type will arise in the avoidance or reduction projects segment, which will gain $532.1 billion of global annual sales by 2029. The top opportunities in the carbon credit market segmented by end-use will arise in the power segment, which will gain $282.38 billion of global annual sales by 2029. The carbon credit market size will gain the most in China at $151.51 billion.

Market-trend-based strategies for the carbon credit market include advanced analytics tools for enhanced carbon credit procurement, incentivizing sustainable commuting through carbon credit programs, integration of digital platforms for streamlined carbon credit procurement, integration of blockchain technology for real-time carbon credit trading, corporate integration of carbon credits to support net-zero commitments, scaling direct air capture (DAC) technology to achieve gigaton-scale carbon removal.

Player-adopted strategies in the carbon credit market include focus on expanding their business capabilities through new launches, to enhance their market presence and strategic investments to support its growth to develop ethanol assets in new regions.

To take advantage of the opportunities, the analyst recommends the carbon credit market companies to focus on linking carbon credits to measurable everyday behavior, focus on data-driven procurement and commuter engagement models, focus on digital platform integration to enhance access and transparency, focus on blockchain-enabled trading platforms, focus on integrating high-integrity carbon credits into corporate decarbonization plans, focus on scaling direct air capture partnerships and project deployment, focus on voluntary carbon credit segment, focus on removal or sequestration projects to accelerate long-term growth, expand in emerging markets, focus on distribution network expansion through strategic partnerships and digital platforms, focus on transparent and value-driven pricing to build trust and scale demand, strengthen market presence through education and credibility, expand digital outreach and tailored engagement and focus on aviation segment for accelerated growth.