Voluntary Carbon Credit Trading Market Size, Share, Growth, And Industry Analysis By Type (REDD Carbon Offset, Renewable Energy, And Landfill Methane Projects) By Application (Industrial, Household, And Energy Industry) Regional Forecast to 2028

Updated On: 13 March 2023

Report Overview

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The global voluntary carbon credit trading market size was USD 355.44 million in 2021. The global COVID-19 pandemic has been unprecedented and staggering, with voluntary carbon credit trading market higher-than-anticipated demand across all regions compared to pre-pandemic levels. As per our research, the market is expected to reach USD 521.5 million in 2027, exhibiting a CAGR of 6.6% during the forecast period. The sudden rise in CAGR is attributable to the market's growth and demand returning to pre-pandemic levels once the pandemic is over. 

Trading in carbon credits aims to lower a company's overall carbon footprint. Governmental entities, enterprises, non-governmental organizations, and private investors engage in voluntary carbon credit trading. These groups buy carbon credits from others to offset their own carbon emissions. Private companies make up the majority of those that purchase carbon credits, and they typically do so to resell them or use them as investments. To offset their carbon footprint and further reduce carbon emissions, many businesses worldwide that cannot reduce their carbon footprint can purchase these carbon offsets or carbon credits from reputable vendors. By funding the carbon reduction project, the carbon credit acquired and the money it generated are subsequently used to lower carbon emissions.

One of the main factors influencing the growth of market for voluntary carbon credit trading is the existence of greenhouse gases and their impact on the environment. The development of the market for voluntary carbon credit trading has also been aided by governments all over the world acting to reduce environmental pollution and impose regulations on different businesses. The market for voluntary carbon credit trading will substantially benefit from the introduction of fresh ideas and technologies as well as the expansion of green technology initiatives. The market for voluntary carbon credit trading will continue to grow tremendously in the future due to the health dangers associated with carbon emissions.

COVID-19 Impact: The Market Saw Downfall Due To Low Carbon Emission During Pandemic

The market for voluntary carbon credit trading saw negative repercussions from COVID-19, such as other markets worldwide that sustained losses due to the global supply chain disruption, a scarcity of manpower, and a shortage of raw materials. Due to the low carbon emissions during the COVID-19 outbreak, the market for voluntary carbon credit trading was hampered. Due to the pandemic's impacts, strict regulations prohibiting people from leaving their homes were implemented, greatly reducing the amount of carbon dioxide that many automobiles created. The market for voluntary carbon credit trading showed little to no profit as a result of decreased pollution.

Latest Trends

"Newer Additions In The Market To Propel The Growth"

As a result of more recent and cutting-edge additions to the sector, the market for voluntary carbon credits could experience tremendous expansion. By incorporating the computerized processing of carbon credits, the market might advance. Although the market's access to new technologies is limited, it is constantly looking for ways to improve its trading efficiency. In the interim, the market for voluntary carbon credit trading has been digitally recording purchases so buyers and sellers may follow their transaction using either the serial number given to the buyer or their digitally created receipts.

Segmentation

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• By Type Analysis

According to type, the market can be segmented into REDD carbon offset, renewable energy, and landfill methane projects. REDD carbon offset is expected to be the top segment during the forecast period.

• By Application Analysis

Based on application, the market can be divided into industrial, household, and energy industry. Industrial segment is anticipated to lead the market during the forecasted 2021-2027 market years.

Driving Factors

"Rising Threat Of Global Warming Facilitates Market Development"

Due to the rising global warming and the potentially catastrophic impacts, it can have, the market for voluntary carbon credit trading is experiencing a boom in growth. It is now more important than ever to reduce carbon footprint to protect the environment due to the number of pollutants released by numerous businesses has raised the threat of global warming. Governments worldwide have pushed the market for voluntary carbon credit trading forward due to this aspect by acquiring carbon credits and making every effort to cut carbon emissions as feasible.

"Partial Use Of Carbon Offset Augments Market Expansion"

The entire economy will need to undergo a significant transformation since the globe is heading toward the net zero goals for the carbon emission put out by several businesses and to stop the maximum pumping out of pollutants. Investors in the voluntary carbon credit trading market are managing various opportunities and dangers thanks to recent market innovations. Since carbon credits are a valuable financial tool for many markets, industries, and governmental and non-governmental organizations, many businesses are using them only partially to maximize their benefits, driving the market for voluntary carbon credit trading ahead.

Restraining Factors

"High Cost Of Initial Investments Impedes Market Growth"

Although the market for voluntary carbon credit trading benefits the environment and government operations, the market expansion is being hampered by the high cost of the initial investment in the market for voluntary carbon credit trading. Due to their lack of market understanding, many organizations also choose not to participate. Due to the possibility of a radical change in the economy brought on by trading carbon credits, some potential investors are also choosing not to participate in the market. As mentioned earlier, the factors hamper the voluntary carbon credit trading market growth.

Regional Insights

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"North America Leads The Market Due To Government Initiative"

The majority of market shares are held by North America, which is also anticipated to increase significantly over the projection years. North America is also the region with the greatest geographical competition. As governments become more aware of the advantages the market for voluntary carbon credit trading offers, the region is witnessing growth in the industry. The governments in the North American region are leading the way by encouraging the carbon credits market, which keeps the region at the top by allowing for a large reduction in carbon emissions.

In the European region, which includes nations such as Germany, France, the United Kingdom, Italy, Turkey, and Russia, the product is consumed and used to the region's advantage. Due to a growing awareness of the need to protect the environment from the many pollutants that a vast number of businesses in the region are spewing into the atmosphere, the European region retains the majority of the voluntary carbon credit trading market share after North America. For their financial gain and the benefit of the environment, governments throughout the region are also making substantial efforts to enter the market and cut carbon emissions. The significant demand for carbon offsets in the area also drives the European industry.

Key Industry Players

"Key Players Focus on Partnerships to Gain a Competitive Advantage "

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolios.

List of Market Players Profiled

• South Pole Group (Switzerland)
• Terrapass (U.S.)
• NativeEnergy (U.S.)
• 3Degrees (U.S.)
• Forest Carbon (U.S.)
• CBEEX (China)
• WayCarbon (Brazil)
• Guangzhou Greenstone (China)
• Carbon Credit Capital (U.S.)
• Bioassets (Philippines)
• Aera Group (France)
• Carbon Clear (United Kingdom)
• Biofílica (Brazil)
• GreenTrees (U.S.)
• Allcot Group (Spain)

Report Coverage

This research profiles a report with extensive studies that take into description the firms that exist in the market affecting the forecasting period. With detailed studies done, it also offers a comprehensive analysis by inspecting the factors such as segmentation, opportunities, industrial developments, trends, growth, size, share, and restraints. This analysis is subject to alteration if the key players and probable analysis of market dynamics change.