Carbon Credit (Compliance & Voluntary) Market Traded Value, Volume, Key Players, Size, Share and Forecasts to 2028

The global carbon credit market traded value was US$978.56 billion in 2022. The market is expected to reach US$2.68 trillion by 2028. On the other hand, the global carbon credit market traded volume reached 13.22 GtCO2e in 2022. The traded volume is expected to reach 19.57 GtCO2e by 2028. A carbon credit is a way to measure, value, and trade a verifiable and quantifiable amount of GHG emissions with one credit universally understood to mean one ton of carbon dioxide or equivalent (tCO2e). Article 6 of the Paris Agreement provides a framework for the use of carbon credits, which can increase demand for them. In addition, the Paris Agreement requires countries to regularly update and enhance their nationally determined contributions (NDCs), which can lead to increased demand for carbon credits as countries seek to meet more ambitious emissions reduction targets.

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The key initiatives/ Emission Trading Systems (ETS) of the global carbon credit market are:

EU ETS
California Cap-and-Trade Program
Regional Greenhouse Gas Initiative (RGGI)
Korea Emissions Trading System
UK ETS
China National ETS

Carbon credits are a type of tradable permit that allows the holder to emit a certain amount of greenhouse gases, such as carbon dioxide, into the atmosphere. The carbon credit market can be divided into two main categories: compliance and voluntary.

The compliance carbon credit market is driven by government policies and regulations aimed at reducing greenhouse gas emissions. Companies that exceed their emissions allowances can purchase carbon credits to offset their excess emissions and avoid penalties. These carbon credits are typically issued by government bodies and can be traded on exchanges such as the European Union Emissions Trading System (EU ETS) and the California Cap-and-Trade Program.

The voluntary carbon credit market, on the other hand, is driven by companies and individuals who voluntarily offset their carbon emissions. These credits are not subject to government regulations and can be purchased by anyone looking to reduce their carbon footprint. The voluntary market is often used by companies and individuals to demonstrate their commitment to sustainability and to meet their own internal sustainability targets.

The carbon credit market has grown significantly in recent years, with the voluntary market in particular experiencing strong growth. The demand for carbon credits is being driven by a growing awareness of climate change and the need to reduce greenhouse gas emissions.

However, the carbon credit market has faced some challenges, such as concerns around the effectiveness of carbon offsetting and the risk of fraud in the market. In addition, the value of carbon credits can be subject to market fluctuations, which can make it difficult for buyers and sellers to predict the future value of their investments.

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Overall, the carbon credit market is expected to continue to grow as governments and companies around the world increasingly prioritize sustainability and work towards reducing their carbon footprint.

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This release was published on openPR.