Carbon offsets are verified reductions of greenhouse gas emissions used to compensate for emissions made elsewhere, such as those from fossil fuel use, in attempt to reduce the net emissions of carbon dioxide or other greenhouse gases into the atmosphere. Carbon offsets are measured in metric tons of carbon dioxide-equivalent (CO2e) and may represent reductions from energy efficiency projects, fuel switching, destruction of industrial pollutants or greenhouse gases, or land use practices like reforestation. They provide a way for governments and companies to invest in emission-reduction projects, like renewable energy, to meet international climate targets and recognize other environmental benefits. There are many advantages associated with carbon offset market, such as, reduction of greenhouse gases emission, avoidance of emission tax penalty, positive public relations impact, etc.
The global Carbon Offset Market is estimated to be valued at US$ 477.85 Mn in 2024 and is expected to exhibit a CAGR of 8.6% over the forecast period 2024 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends:
One of the key trends driving the growth of carbon offset market is increasing focus of companies and governments on achieving net zero carbon emission targets. Many governments have announced net-zero emission targets by 2050 and mid-century to limit global temperature rise below 1.5°C compared to pre-industrial levels. For instance, in 2021, US government announced its commitment to achieve net-zero greenhouse gas emissions by 2050. Similarly, EU has set target of reducing at least 55% emissions by 2030 from 1990 levels and achieving climate neutrality by 2050. Growing interest of companies towards achieving net zero emission is further accentuating the market growth. As companies are investing significantly in carbon offset projects to balance out carbon footprint of their operations.
Segment Analysis
The global carbon offset market is dominated by voluntary offsets, which accounts for around 80% of the total carbon offset market. Voluntary offsets allow companies and individuals to neutralize their carbon footprint voluntarily, over and above any compliance requirements. They are much more flexible compared to compliance offsets and also allow branding opportunities to organizations.
Key Takeaways
The global Carbon Offset Market Demand is expected to witness high growth over the forecast period of 2024 to 2030. The market size is projected to increase from US$ 477.85 Mn in 2024 to US$ 822.81 Mn by 2030, growing at a CAGR of 8.6% during the forecast period.
Regional analysis: North America currently dominates the global carbon offset market, accounting for around 35% of the total market share in 2024. Stringent regulations regarding carbon emissions and presence of early adopters are major factors driving the growth of the carbon offset market in the region. Europe is the second largest market and is expected to witness strong growth going forward, supported by the EU Emissions Trading System and commitments to reduce emissions. Asia Pacific is expected to be the fastest growing regional market due to the rising awareness about sustainability and carbon neutral programs of large corporations in countries like China and India.
Key players operating in the carbon offset market are AptarGroup, Weener Plastics Group, Bormioli Rocco Pharma, Pacific Packaging Components, PCC Exol, SHL Group, O.Berk Company, Winfield Laboratories, O.Berk, Comar, RPC Group, Alpha Packaging, Pretium Packaging, Silgan Holdings, Origin Pharma Packaging, Vidchem pty ltd, Mold-Rite Plastics, Berry Global, Amcor, Gerresheimer. The market is fragmented with the presence of many regional and global players. Market leaders are focusing on strategic partnerships and collaborations to expand their geographic presence and service offerings.
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