Carbon Credit Market Analysis

Carbon Credit Market Analysis

The compliance carbon credit industry is expected to exceed USD 458 billion by 2034. The growing inter-linkages between carbon credit markets and other environmental markets including renewable energy certificates and biodiversity credits are setting the stage for cross-market sustainability solutions across the globe. In addition, the efforts to scale compliance carbon markets and the science-based targets initiative is aligning with more than a hundred project pursued to accelerate the integration of the development of common standards and methods, thus contributing to the industry growth.
 

The forestry & land use market will grow at a rate of over 15% by 2034. Increased buying or selling carbon credits are able to take advantage of afforestation and reforestation projects which are becoming an integral part of the carbon credit market, and this is transforming the climate change mitigation process. Moreover, they are getting increasing acceptance for their potential to generate carbon credits and for their effectiveness in restoring ecosystems knows as ‘natural climate solutions, these projects combine land use and carbon sequestration while also bringing benefits of sustained diversity and community participation.
 

The U.S. carbon credit market is set to exceed USD 30 billion 2034, owing to the incorporation of corporate goals concerning sustainability and obligations increasing voluntarily. Corporates across the globe are utilizing carbon offset mechanisms to rapidly reach net-zero carbon emission goals which has resulted in increasing pressure and demand for obtaining high quality validated credits. In addition, enhanced efficiency and transparency achieved through the integrating new technologies such as AI and blockchain for better trading is benefitting the market. There is also a changing preference for investment in co-benefits associated with community growth and conservation of biodiversity, this in turn contributes to the development of the market at country level.
 

In Europe, the carbon credit market has expanded owing to strict climatic policies and the growth of the EU Emissions Trading Scheme, ETS. Various companies are generating and using carbon credits to lower their emissions, in particular to attain specific targets which further enhances the demand for set allowances and offsets. As a result, pushing of carbon neutral certification and science-based targets, businesses have altered their purchasing strategies, thereby augmenting the demand scenario for carbon credit business. There is robust growth in investments for business solutions and carbon capture technologies with long term credit while at the same time looking for advanced options impacting the market on a positive note.