Carbon offset market is expected to grow at a robust
rate during the forecast period. The carbon-offsets market has evolved rapidly,
inducing high interest from investors and corporates. The rapidly rising CO2
emissions have surged the need for carbon offsets. CO2 emissions impacts human
health, climate, human respiratory system, and the environment negatively.
These negative impacts have surged the need for carbon offsets to compensate
for the emission of greenhouse gases, such as carbon dioxide, methane, nitrous
oxide, hydrochlorofluorocarbons (HCFCs), hydrofluorocarbons (HFCs), and ozone.
The supportive government initiatives, such as the Carbon Farming Initiative
(CFI) will further aid to surge the demand for voluntary carbon offsets. All
this will further fuel the market growth during the forecast period.
There is no distinction between the phrases, carbon
offset and carbon offset credit. In general, a carbon offset refers to a
decrease in GHG emissions or an increase in carbon storage (such as through
land restoration or tree planting), that is used to make up for emissions that
happen somewhere else. A carbon offset credit is a transferable asset that has
been verified by governments or independent certifying organisations to reflect
a decrease in emissions equal to one metric tonne of CO2 or another GHG.
Carbon Offset Market: Drivers & Trends
Shifting from Reduction and Avoidance to Removal:
Now, programs that seek to avoid or reduce atmospheric
carbon dioxide emissions account for 82% of the market for offsets. Buyers of this
type of offset are credited with lowering future emissions by, for example,
selecting renewable energy over fossil fuels or preserving forests. On the
other hand, removal credits mitigate the consequences of earlier emissions. For
example, planting trees to store carbon or using technology-based techniques to
directly capture carbon from production processes and fossil-fuel powered power
plants are examples of initiatives that directly removes carbon dioxide from
the atmosphere and are the basis for removal credits, which accounts for 5% of
the market. The remaining 13% of offsets are a combination of schemes for
elimination and avoidance/reduction. The long-term relevance of removal
initiatives is projected to increase, but the supply is now constrained by
scalability and cost issues. Credits for avoidance and reduction will keep
filling up the gaps until the transition is finished. Buyers should produce
enough carbon offset credits to meet businesses' net-zero targets. When they
start projects that remove carbon dioxide from the atmosphere demonstrably and
permanently over the course of the next ten years, it can lead to an expansion
of the global carbon offset market.
From Nature to Technology:
The main goal of nature-based carbon offset
initiatives is to lower emissions caused by deforestation and forest
degradation. Although it is difficult to gauge their effectiveness, they serve
as an important stopgap measure until there is no more land available for
reforestation or until nations enact laws that are more aggressive in
protecting existing forests and natural systems. But after 2030, technological
approaches to carbon removal are more likely to prevail over those based on the
environment. In fact, after 2030, most well-known net-zero models will rely on
technology-based removal, with upwards of 5 gigatons of carbon dioxide removed
annually by 2050. The implementation of new renewable technologies, stopping or
capturing methane leakage from the production of fossil fuels, mining,
landfills, or livestock, replacing wood-burning stoves with clean cookstoves,
capturing carbon dioxide directly from the air, and storing captured carbon
from emission sources and permanently storing it underground are just a few
examples of tech-based offset projects.
Increasing CO2 Emissions:
The tremendous growth in CO2 emissions, which have
harmed both the environment and human health, has increased the need for
voluntary carbon offsets. Voluntary carbon offsets are the go-to strategy to
reduce greenhouse gas emissions since the resulting climate change and air,
water, and soil pollution have caused an increase in respiratory ailments.
Furthermore, the encouraging government initiatives to cut greenhouse gas
emissions are anticipated to increase demand for voluntary carbon offsets and
fuel market expansion over the course of the forecast period. However, the
adoption of verified emission reductions (VERs) and compliance emission
reductions (CERs) as alternatives to voluntary carbon offsets may slow the
market's expansion.
Increasing Environmental Concerns and Focus on
Reducing Carbon Footprints:
- Businesses are attempting to adapt their business
models to be more sustainable, and they are becoming more and more
concerned with lowering their carbon footprints. For instance, in August
2019, the Business Roundtable, a group made up of CEOs from major US
corporations, vowed to update the definition of a corporation and
challenge the conventional wisdom that says a company's goal is to
maximize profits for its owners or shareholders. The executives also
concurred that businesses must protect the environment "by embracing
sustainable practices."
- Owing to this, major enterprises are increasingly
focusing on reducing their environmental impact. Similarly, major
enterprises are looking to adopt sustainable solutions across the world
are positively impacting the market.
- Companies are putting sustainability at the heart
of their business model and scrutinize its future viability.
- Promoting environmentally friendly methods by
enterprises as part of the business is proven to attract new customers who
want to buy products and services from an environmentally friendly
business. Apart from this, various government regulations are forcing
businesses to manage their carbon footprints, thus positively impacting
the market demand for carbon offsets.
Carbon Offset Market: Challenges
Fluctuating Prices of Carbon Credits:
The demand for carbon credits is expected to grow
significantly in the coming decades. The voluntary offset market offers an
opportunity to achieve global greenhouse emission reductions while addressing
the development needs of developing countries. Involving developing nations in
climate protection allows them to achieve carbon emission reduction and
avoidance while earning revenues from selling their offsets. They can then use
the money to pay for development initiatives for their nation's underprivileged
neighborhoods. By protecting and restoring forests, grasslands, and other
ecosystems, carbon projects aim to maximize nature's ability to combat climate
change. The increased carbon storage can be measured and converted into carbon
credits that top businesses and individuals can purchase to assist them in
achieving their environmental objectives. The objective is to create bankable
carbon programs that demonstrate their ability to offer conservation,
community, and financial benefits to inspire others to adopt the strategy and,
together, accomplish significant victories for the climate, biodiversity, and
human way of life on a global scale.
Recent Developments
- In January 2022, UN Climate Change collaborated
with AirCarbon Exchange (ACX), the first completely digital carbon
exchange in the world, to promote carbon offsetting through emission
reductions that have been verified by the UNFCCC secretariat. Through the
partnership, clients of ACX from 30 different nations will be able to buy
and sell "Certified Emission Reductions" (CERs), which are
emission credits used for carbon offsetting. The UNFCCC Clean Development
Mechanism (CDM) registry that stores and tracks CERs, including their
retirement, will be the second exchange in the world and the first in Asia
to list CERs.
- Air Canada announced a collaboration with CHOOOSE
as the carrier's new supplier of a carbon programme in September 2022. The
airline's Canadian and US booking websites now seamlessly includes the
choice to buy verified carbon offsets.
- In accordance with Article 6 of the Paris
Agreement, the United Nations Development Programme (UNDP) and the
foundation for climate protection and carbon offset, KliK collaborated on
climate protection initiatives as of December 2022. In November 2022, a
Memorandum of Understanding (MOU) was signed that laid the groundwork for
obtaining ITMOs (Internationally Transferred reduction Outcomes) from GHG
reduction schemes created by UNDP in several partner nations. Compliant
with, the MOU, UNDP and the KliK Foundation are adhering to Article 6.2 of
the Paris Agreement to make sure the ITMO projects are supplementary to
assist the sustainable development of the host countries.
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Market Segments
Global carbon offset market is segmented into type,
project type, end-user, and region. Based on type, the market is segmented into
carbon compliance market and voluntary carbon market. Based on project type,
the market is segmented into natural offsets and technological offsets. Based
on end-user, the market is segmented into power, energy, aviation,
transportation, industrial, buildings, and others. Based on region, the market
is segmented into North America, Asia-Pacific, Europe, South America, and
Middle East & Africa.
Market Players
Some of the major market players in the global carbon
offset market are NativeEnergy, Inc., 3Degrees Group, Inc., Terrapass, EKI
Energy Services Ltd., Ecologi, Climeworks AG, Climate Vault, Inc., Watershed
Technology, Inc., ClearCompany, Inc., and Carbonfund.
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Attribute
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Details
|
|
Base Year
|
2022
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Historic Data
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2018 –
2022
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Estimated Year
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2023
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Forecast Period
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2024
– 2028
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Quantitative Units
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Revenue in USD Million, and CAGR for 2018-2022 and 2023-2028
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Report coverage
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Revenue
forecast, company share, growth factors, and trends
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Segments covered
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Type
Project Type
End-user
Region
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|
Regional Scope
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North
America, Asia-Pacific, Europe, South America, Middle East & Africa
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|
Country Scope
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United States, Canada, Mexico, China, India, Japan, Indonesia,
South Korea, Germany, Italy, Poland, United Kingdom, France, UAE, Saudi
Arabia, South Africa, Brazil, Argentina, Chile
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|
Key Companies Profiled
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NativeEnergy, Inc., 3Degrees Group, Inc., Terrapass, EKI Energy
Services Ltd., Ecologi, Climeworks AG, Climate Vault, Inc., Watershed
Technology, Inc., ClearCompany, Inc., Carbonfund
|
|
Customization Scope
|
10% free report
customization with purchase. Addition or alteration to country, regional
& segment scope.
|
|
Pricing and Purchase Options
|
Avail
customized purchase options to meet your exact research needs.
|
|
Delivery Format
|
PDF and Excel through Email (We can also provide the editable
version of the report in PPT/Word format on special request)
|
Report Scope:
In this report, global carbon offset market has been segmented into
following categories, in addition to the industry trends which have also been
detailed below:
- Carbon
Offset Market, By Type:
- Carbon
Compliance Market
- Voluntary
Carbon Market
- Carbon
Offset Market, By Project Type:
- Natural
Offsets
- Technological
Offsets
- Carbon
Offset Market, By End-User:
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Carbon
Offset Market, By Region:
o
North America
§
United States
§
Canada
§
Mexico
o
Europe
§
Germany
§
Italy
§
Poland
§
United Kingdom
§
France
o
Asia pacific
§
China
§
India
§
Japan
§
Indonesia
§
South Korea
o
Middle East & Africa
§
South Africa
§
Saudi Arabia
§
UAE
o
South America
§
Brazil
§
Argentina
§
Chile
Competitive Landscape
Company Profiles: Detailed analysis of the major companies present
in the global carbon offset market.
Available Customizations:
Global carbon offset market with the given market data, Tech Sci
Research offers customizations according to a company’s specific needs. The
following customization options are available for the report:
Company Information
- Detailed
analysis and profiling of additional market players (up to five).
Global carbon offset market is an upcoming report to be released soon.
If you wish an early delivery of this report or want to confirm the date of
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