The global carbon credit market plays a vital role in minimizing the carbon footprint generated from various industrial activities through allowing carbon offset projects like renewable energy generation, forestation and clean cooking. Carbon credits are financial instruments that represent the right to emit one tonne of carbon dioxide or its equivalent greenhouse gases. Carbon credits find application in sectors like power, oil & gas, manufacturing, transportation among others for compliance with regulations on carbon emissions.
The global carbon credit market is estimated to be valued at US$ 31.54 billion in 2024 and is expected to exhibit a CAGR of 3.0% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the major trends in the global carbon credit market is the increasing emphasis on net-zero emissions targets by various nations worldwide. As greenhouse gas emissions from human activity continue to rise globally, more countries are setting deadline to achieve net-zero emissions. For example, the European Union has set a net-zero target year of 2050, while the UK aims to hit the target by 2050 as well. Reaching net-zero emissions involves balancing the amount of greenhouse gases emitted with the amount removed from the atmosphere. Carbon credits play a key role in achieving such ambitious net-zero targets by facilitating investments in various offset projects. Another notable trend is the adoption of internal carbon pricing initiatives by corporates to mitigate emissions from their operations. Leading companies across industries are valuing their greenhouse gas emissions at escalating carbon costs to factor climate costs in their financial decisions and shift to cleaner production. This is expected to boost demand for quality carbon credits in the coming years.
Porter’s Analysis
Threat of new entrants: The threat of new entrants in the global carbon credit market is low. Significant capital requirements and existing stringent government regulations set barriers for new players to enter the market easily.
Bargaining power of buyers: The bargaining power of buyers is high given the presence of many global players providing carbon credits. Buyers can negotiate for better prices and demand other favorable terms.
Bargaining power of suppliers: The bargaining power of suppliers is moderate as supply is concentrated among a few large players and governments. Suppliers have influence over pricing and carbon credit availability.
Threat of new substitutes: There is no close substitute available for carbon credits currently. Alternatives like self-regulatory actions by companies have limited impact.
Competitive rivalry: Competition in the market is high among existing major players. Players compete based on pricing strategies, credit types, regional presence, and reliability of offset projects.
Key Takeaways
The Global Carbon Credit Market Share is expected to witness high growth over the forecast period. The global carbon credit market is estimated to be valued at US$ 31.54 billion in 2024 and is expected to exhibit a CAGR of 3.0% over the forecast period 2023 to 2030.
Regional analysis: The Europe region currently dominates the global carbon credit market and is expected to retain its position over 2023-2030. Stringent carbon regulations and availability of many offset projects drive the European market. Asia Pacific is poised to be the fastest growing regional market led by China, India, and other developing nations.
Key players: Key players operating in the global carbon credit market are Carbon Credit Capital, 3Degrees, NativeEnergy, GreenTrees, South Pole Group, Aera Group, Allcot Group, Carbon Clear, Forest Carbon, and Bioassets. NativeEnergy and South Pole Group have a wide geographic presence and offer diversified credit types to buyers. GreenTrees is growing fast in project developments across Southeast Asia and Africa.
For more details on the report, Read- https://www.insightprobing.com/global-carbon-credit-market-demand-share-analysis/
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