The Canada carbon credit market is gaining traction owing to the growing demand from oil and gas industry to mitigate its carbon emissions. Carbon credits allow industries to offset their carbon emissions by funding activities like tree plantation, renewable energy projects etc. The carbon offset from such projects can be traded as carbon credits.
Carbon credits are increasingly being used by industries in Canada to reduce their carbon footprint and meet their voluntary or compliance-based emissions targets. The oil and gas sector accounted for 26% of the national greenhouse gas emissions in Canada in 2018. Stringent regulations and investor pressure are driving companies in the oil and gas industry to lower their carbon footprint through the use of carbon offset programs.
The Global Canada carbon credit market is estimated to be valued at US$ 1,797.7 Mn in 2024 and is expected to exhibit a CAGR of 11% over the forecast period 2024-2031.
Key Takeaways
Key players operating in the Canada carbon credit market are WGL Holdings, Inc., Enking International, Green Mountain Energy, Native Energy, Cool Effect, Inc., Sustainable Travel International, 3 Degrees, Terrapass, and Sterling Planet, Inc. These companies offer carbon offset programs and connect buyers with projects that reduce or remove carbon from the atmosphere.
The demand for carbon credits is growing in Canada due to the evolving regulatory landscape. Both the federal and provincial governments are implementing policies and regulations such as the federal Output-Based Pricing System (OBPS) to curb industrial emissions. This is increasing compliance requirements for companies.
Technological advancements are also supporting the growth of the carbon credit market. Blockchain and distributed ledger technologies are being leveraged to create digital carbon credits and ensure the integrity and traceability of transactions. This makes carbon credit projects more transparent and helps build trust among voluntary buyers.
Market Trends
Transition to net-zero economy - Major economies including Canada have committed to achieving net-zero emissions by 2050. This is driving participation in the carbon credit market from various industries as they offset residual emissions.
Voluntary carbon market growth - While the compliance carbon market deals with compliance-based regulations, the voluntary carbon market is growing rapidly with companies and individuals looking to reduce their carbon footprint voluntarily.
Market Opportunities
Nature-based solutions - Reforestation, avoided deforestation and soil carbon projects offer significant potential to sequester carbon and generate carbon credits. These nature-based solutions can offset 15-37% of Canada's emissions.
SME participation - With evolving policies, even small and medium enterprises are recognizing their role. Carbon credit programs provide them an affordable way to lower emissions. This can drive higher SME participation in future.
Impact Of Covid-19 On Canada Carbon Credit Market
The COVID-19 pandemic negatively impacted the Canada carbon credit market in the short term. With lockdowns and restrictions imposed across the country, industrial and commercial activities slowed down significantly. This reduced emissions from these sectors and lowered the demand for carbon credits initially. However, post pandemic there is scope for market rebound as businesses resume operations and aim to meet emission regulations through carbon offsets. The pandemic led to increased awareness about climate change and sustainable development. This may boost demand for credits to achieve long term carbon neutrality goals. While lockdowns reduced emissions temporarily, lasting lifestyle and consumption pattern changes are needed. Companies can prioritize investing in renewable energy and improving efficiency to curb emissions permanently in the post COVID world.
Geographical Concentration
In terms of value, the province of Alberta accounts for over 40% share of the Canada carbon credit market. This is due to abundant oil and gas reserves in the region which are major emission sources. industries based here largely depend on credits for compliance. Alberta has a provincial carbon pricing policy which drives credit demand. Other key provinces include Ontario and Quebec which are industrial hubs. Together with Alberta, they account for over 75% of national carbon credit transactions by value due to concentration of heavy industries and emission intensive sectors here.
Fastest Growing Region
The Atlantic provinces in Canada especially Nova Scotia and New Brunswick are emerging as fastest growing regions for carbon credits. Though their current market share is lower than other provinces, growth rate is high. These regions have committed to phasing out coal power plants. To meet renewable energy targets, carbon offsetting through credits is expected to rise sharply. Industries in these regions are also increasing investments in green projects qualifying for credit generation. Their carbon pricing policies also incentivize offset usage. Overall, Atlantic Canada is witnessing strong political and corporate support for low carbon transition signaling robust long term credit demand growth potential.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
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What Are The Key Data Covered In This Canada Carbon Credit Market Report?
:- Market CAGR throughout the predicted period
:- Comprehensive information on the aspects that will drive the Canada Carbon Credit 's growth between 2024 and 2031.
:- Accurate calculation of the size of the Canada Carbon Credit and its contribution to the market, with emphasis on the parent market
:- Realistic forecasts of future trends and changes in consumer behaviour
:- Canada Carbon Credit Industry Growth in North America, APAC, Europe, South America, the Middle East, and Africa
:- A complete examination of the market's competitive landscape, as well as extensive information on vendors
:- Detailed examination of the factors that will impede the expansion of Canada Carbon Credit vendors
FAQ’s
Q.1 What are the main factors influencing the Canada Carbon Credit ?
Q.2 Which companies are the major sources in this industry?
Q.3 What are the market’s opportunities, risks, and general structure?
Q.4 Which of the top Canada Carbon Credit companies compare in terms of sales, revenue, and prices?
Q.5 Which businesses serve as the Canada Carbon Credit ’s distributors, traders, and dealers?
Q.6 How are market types and applications and deals, revenue, and value explored?
Q.7 What does a business area’s assessment of agreements, income, and value implicate?
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