Europe Compliance Carbon Credit Market Size - By End Use (Agriculture, Carbon Capture & Storage, Chemical Process, Energy Efficiency, Industrial & Commercial, Forestry & Land use, Renewable Energy, Transportation) & Forecast, 2024 – 2032

Europe Compliance Carbon Credit Market Size

Europe Compliance Carbon Credit Market size recorded a valuation of USD 80.7 billion in 2023 and is expected to grow at a CAGR of 14.1% from 2024 to 2032, driven by need to reduce greenhouse gas emissions and combat climate change. The EU ETS is central to region’s compliance market, setting emissions caps and enabling companies to trade allowances, which will incentivize investments in low-carbon technologies and drives cost-effective emission reductions, promoting sustainable development.
 

For instance, in December 2023, EU's expanded EU ETS to maritime transport and created separate ETS for buildings and road transport underscores its commitment to climate goals. This move emphasizes region’s fostering sustainable development and transition to low-carbon economy.
 

Europe Compliance Carbon Credit Market Trends

The market is experiencing a transformation owing to the rising need for effective climate action and sustainable development. Advancements in carbon trading platforms and technologies facilitate easier access to carbon credits, thereby driving market efficiency and transparency. Collaborative initiatives between governments, businesses, and environmental organizations foster innovation and investment in carbon reduction projects, further propelling market growth.
 

For instance, in February 2024, European Commission's proposal to certify carbon removals generated within Europe, aiming to encourage development of high-quality carbon removal projects and establish a robust market for carbon removal credits. By providing a certification system, it seeks to ensure integrity of compliance carbon market and support the region's climate goals playing an essential role in shaping the compliance carbon credit industry.
 

Europe Compliance Carbon Credit Market Analysis

Increasing demand for carbon credits along with growing interest in sustainable finance and environmental, social, and governance (ESG) investing will drive the indystry growth. The demand has been further fueled by the tightening of emission reduction targets by the European Union and the introduction of more ambitious climate policies. In addition, emergence of innovative financial instruments and carbon trading platforms, making easier for businesses to participate in carbon trading activities and manage their carbon footprint more effectively, will further aid in proliferating the market growth.
 

Based on end use, the compliance carbon credit market includes forestry & land use, chemical process, carbon capture & storage, agriculture, energy efficiency, industrial, renewable energy, transportation, & waste management. The renewable energy sector is anticipated to grow at a CAGR of over 14% through 2032, attributed to its carbon sequestration potential, policy support, and technological advancements. Growing Demand for Renewable Energy Certificates (RECs) along with integration of carbon neutrality goals will augment the business scenario within the region.
 

In addition, the adoption of standardized carbon accounting protocols and reporting frameworks, such as the Greenhouse Gas Protocol and the Task Force on Climate-related Financial Disclosures (TCFD), is facilitating transparency and comparability in carbon emissions reporting, thereby adding to the market growth.
 

UK holds significant compliance carbon credit market share which is estimated to soar over USD 30 billion by 2032. The country’s Emissions Trading Scheme, implemented post-Brexit, promotes emission reductions by enabling companies to trade allowances within a set cap. In addition, strong climate policy, including commitment to achieve net-zero emissions by 2050, further support development of compliance carbon market in the country.
 

For instance, in December 2023, UK and EU announced establishing a robust infrastructure for CO2 transport and storage, reflecting importance of such systems in achieving net-zero targets. Additionally, its leadership in climate action, evident through hosting events including COP26 summit, contributes to its significant market share and influence within the broader European compliance carbon targets over the expected timeline.
 

Europe Compliance Carbon Credit Company Market Share

Some notable participants include Bluesorece, BP, Total Energies, and CarbonClear, as well as financial institutions like Goldman Sachs, Barclays, and BNP Paribas. Additionally, various carbon trading platforms, such as ICE Endex and EEX, facilitate the exchange of carbon credits within the EU ETS, contributing to the overall market share distribution. These companies and institutions reflect the importance of compliance carbon market in Europe's efforts to reduce greenhouse gas emissions and combat climate change.
 

Europe Compliance Carbon Credit Market Companies

Some of the key market players operating across the industry are:

• ALLCOT
• Atmosfair
• BP p.l.c.
• Bluesource
• CarbonClear
• CDP
• Climate Impact Partners
• Climate Neutral Group
• 3 Degrees
• EcoAct
• Ecosecurities
• PwC
• Shell
• South Pole
• The Carbon Trust 
• TotalEnergies
   

Europe Compliance Carbon Credit Industry News

• In February 2024, Germany allowed underground carbon storage at offshore sites, advancing a technology that has been widely discussed in the context of reducing emissions. This development could influence the carbon credit market in Europe as more companies explore carbon capture and storage solutions.
   
• In December 2022, European Union negotiators reached an agreement to overhaul bloc's carbon market, aiming to cut emissions faster and impose new CO2 costs on polluting companies. This development is expected to strengthen the role of the compliance carbon market in Europe's climate efforts.
   

The Europe compliance carbon credit market research report includes an in–depth coverage of the industry with estimates & forecast in terms of revenue in USD Billion from 2019 to 2032, for the following segments:

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Market, By End Use

• Agriculture
• Carbon Capture
• Chemical Process
• Energy Efficiency
• Industrial
• Forestry & Land Use
• Renewable Energy
• Transportation
• Waste Management
• Others
   

The above information has been provided for the following countries across the region:

• Europe
  • Denmark
  • France
  • Germany
  • Norway
  • Poland
  • Switzerland
  • UK