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The global carbon credit market was valued at US$ 211.5 Billion in 2019 and is expected to surpass US$ 2,407.8 Billion by 2027, registering a CAGR of 30.7% during the forecast period (2020-2027), according to the Global Carbon Credit Market Report, By Sector (Energy, Transportation, Residential and Commercial Buildings, Industry, Agriculture, Forestry, and Water and Wastewater), and by Region (North America, Europe, Asia Pacific, Latin America, and Middle East & Africa), published by Coherent Market Insights.

Global warming is a major concern across the globe. Greenhouse gases emitted by various industries is one of the reasons behind increasing global warming. Thus, in order to tackle the increasing global warming issue, the carbon credit method is being adopted worldwide. A carbon credit is a certificate or tradable permit that allows a company or an individual (or certificate holders) to emit certain amount of greenhouse gases such as carbon dioxide, methane, nitrous oxide, and others into the atmosphere. One credit means the company or an individual holding the certificate can emit mass equal to one ton of carbon dioxide. In other words, governments or regulatory authorities decide on a certain cap limit on the greenhouse emissions by the company. Some companies may find it hard to implement this carbon cap immediately, thus they purchase certain carbon credits from companies which are already carbon offsets, which further helps to subsidize the ongoing green projects for carbon credits selling company. The primary objective of this carbon credit system is to reduce the overall carbon emissions, globally.

Many companies are purchasing carbon credits in order to reduce the carbon emissions. For instance, on February 5, 2021, Microsoft Corporation purchased US$ 20/ ton credit for carbon sequestered in the soil from Truterra LLC, a subsidiary of U.S.-based Land O'Lakes, Inc., an agriculture corporation.

The rapid outbreak of COVID-19 across the globe has significantly affected all the industries globally. The situation caused significant deterioration in economic conditions and government had to shut down commercial as well as educational sectors for a specific period.

Strict containment measures have resulted in a drop of economic activities, the business environment of many organizations has changed. For instance, the ongoing and planned projects of construction, mining, and other industries have been delayed, or cancelled. Also, the carbon market prices in the EU under the EU Emissions Trading System (EU-ETS) are plunging as a consequence of the economic shutdown.

To know the latest trends and insights prevalent in this market, click the link below:

Browse 60 market data tables* and 40 figures* on “Global Carbon Credit Market- Global forecast to 2027”

Key Trends and Analysis of the Global Carbon Credit Market:

  • Europe held dominant position in the global carbon credit market in 2019 and is expected to retain its dominance throughout the forecast period. With presence of strict government regulations and various environmental initiatives in Europe such as becoming climate-neutral EU by 2050, European countries such as UK, Germany, and others are considered as important market players in the carbon credit market. For instance, on December 20, 2019, the Fuel Emissions Trading Act came into effect in Germany, establishing a national ETS for the heat and road transport sectors- which are currently not covered by the EU ETS- by putting a price on fuel suppliers starting in January 1, 2021. This is part of a wider national climate package adopted to help meet Germany’s 2030 climate targets and its 2050 carbon neutrality target.
  • Asia Pacific is expected to show significant growth over the forecast period. The emerging economies such as China, India, and others are considered as global suppliers for carbon credit market. For instance, on September 30, 2019, the government of China released a plan for allocating emissions allowances to the power sector to encourage generation from the most efficient fossil fuel power plant.
  • Among sector, the energy segment held a dominant position in the market in 2019 and is expected to retain its dominance during the forecast period. The segment was valued at US$ 53.3 Bn in 2019, and is expected to generate a revenue of US$ 621.2 Bn by 2027. This segment is expected to exhibit a CAGR of 31.0% over the forecast period (2020 to 2027).
  • Major players operating in the global carbon credit market include WGL Holdings, Inc., Enking International, Green Mountain Energy, Native Energy, Cool Effect, Inc., ClearSky Climate Solutions, Sustainable Travel International, 3 Degrees, terrapass, and Sterling Planet, Inc.
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