Forestry and Land Use Carbon Credit Market - Global Industry Size, Share, Trends, Opportunity, and Forecast, Segmented By Project Type (Afforestation, Avoided Deforestation, Agroforestry, Soil Carbon Sequestration, Others), By Credit Type (Verified Carbon Units, Certified Emission Reductions, Gold Standard Credits, Others), By End-User (Energy & Utilities, Manufacturing, Transport & Logistics, Agriculture, Others), By Region, and By Competition, 2020-2030F

Market Overview

The Global Forestry and Land Use Carbon Credit Market was valued at USD 25.84 Billion in 2024 and is expected to reach USD 43.37 Billion by 2030 with a CAGR of 8.43% during the forecast period.

The global Forestry and Land Use Carbon Credit Market is experiencing significant growth, driven by the escalating need to address climate change, achieve net-zero emissions, and protect biodiversity. As nations and corporations face increasing pressure to meet sustainability targets, the demand for nature-based solutions such as forestry and land use carbon credits has intensified. These credits are generated through activities like afforestation, reforestation, avoided deforestation (REDD/REDD+), improved forest management, agroforestry, and soil carbon sequestration, all of which help capture or avoid the release of atmospheric carbon dioxide. The market plays a critical role in incentivizing sustainable land-use practices, enhancing carbon sinks, and offering financial value to conservation and restoration projects across the globe.

Geographically, regions like Latin America, Southeast Asia, and Sub-Saharan Africa are at the forefront of forestry-based projects, particularly REDD+ initiatives that aim to conserve tropical forests while supporting local communities. Meanwhile, developed regions such as North America and Europe are the major buyers of carbon credits, often using them to offset emissions from industrial operations or to fulfill voluntary corporate sustainability goals. Governments and regulatory bodies are increasingly incorporating forestry and land use offsets into compliance markets, which is expected to further boost demand. In addition, the evolution of voluntary carbon markets and the introduction of high-integrity standards by organizations like Verra, Gold Standard, and Plan Vivo have helped increase transparency, trust, and credibility in the market.

The market is witnessing robust participation from various stakeholders including NGOs, carbon project developers, tech startups, investment firms, and multinational corporations. Leading players such as South Pole, Wildlife Works, InfiniteEARTH, and GreenCollar have established strong portfolios of land use projects that are both commercially viable and environmentally impactful. Moreover, large buyers such as Microsoft, Shell, and Amazon are playing a crucial role in scaling demand through long-term commitments to high-quality carbon removal projects.

Despite its positive outlook, the market faces challenges related to verification, permanence, additionality, and the risk of greenwashing. However, advances in remote sensing, satellite monitoring, and blockchain technology are increasingly being adopted to improve the accuracy and accountability of credit issuance. As climate action becomes more urgent and investors seek sustainable solutions, the Forestry and Land Use Carbon Credit Market is poised for continued expansion, offering a unique convergence of environmental restoration and economic opportunity.

Key Market Drivers

Corporate Net-Zero Commitments and Sustainability Targets:

The growing wave of corporate net-zero commitments has emerged as a major force driving the Forestry and Land Use Carbon Credit Market. Over 70% of Fortune 500 companies have announced net-zero or carbon-neutral targets, creating a surge in demand for high-quality carbon offsets. On average, nature-based credits now account for 15–20% of total sustainability budgets among these corporations. The annual corporate demand for nature-based offsets has grown by nearly 30% year-over-year, indicating a strong upward trajectory. Furthermore, 65% of large enterprises report plans to purchase forestry or land-use credits by 2030. In terms of volume, corporations are purchasing an average of 500,000 tons of CO₂e offsets annually, while top-tier buyers, including technology and energy giants, surpass 2 million tons each year. These trends reflect a robust and maturing voluntary market that increasingly values high-integrity nature-based credits as part of comprehensive climate strategies.

Regulatory Integration and Compliance Mechanisms:

Government regulations and compliance frameworks are strengthening the role of forestry credits in formal carbon markets. By 2025, at least 12 national governments have integrated land-use offsets into their carbon trading systems. These jurisdictions now account for roughly 35% of all forestry-related carbon credit transactions globally. In regions like California and Québec, over 40% of all offset projects under compliance systems are based on forestry and land-use methodologies. Regulatory integration has led to a 45% increase in volume demand for forestry credits in those areas. Additionally, more than 60% of forestry carbon credits issued today meet the standards for both voluntary and compliance market eligibility, reflecting increased regulatory alignment and flexibility. The integration of such credits into national carbon policies signals growing institutional acceptance and is expected to further normalize land-based credits as a climate mitigation tool.

Advances in Measurement, Reporting, and Verification (MRV) Technologies:

Technological advancements in monitoring, reporting, and verification have significantly improved the credibility and scalability of forestry and land-use carbon credit projects. The adoption of satellite imagery and remote sensing technologies has helped reduce on-ground monitoring costs by 50–70%, making project implementation more financially feasible. Artificial Intelligence (AI)-based analytics now support 90% of large-scale REDD+ projects for accurate deforestation tracking. Moreover, blockchain technology is increasingly used, with 25% of carbon project developers adopting it to prevent double-counting and enhance transparency. MRV systems have improved their precision, reducing uncertainty margins from ±20% to as low as ±5%. The frequency of data reporting has also increased, with over 55% of projects now providing monthly or quarterly updates instead of annual assessments. These advancements are instrumental in strengthening the accountability and verification process, thereby boosting investor and buyer confidence in nature-based credits.

Biodiversity Co-benefits and Ecosystem Services Valuation:

The growing recognition of the ecological and socio-economic co-benefits associated with land-use carbon credits is further propelling market growth. Around 80% of active forestry carbon projects now include biodiversity monitoring as a mandatory feature. Projects offering multiple ecosystem services—such as habitat preservation, water purification, and flood control—often earn price premiums of up to 30% compared to carbon-only projects. Surveys show that 45% of carbon credit investors consider biodiversity and social impact metrics in their purchasing decisions. Payment for Ecosystem Services (PES) mechanisms now account for 25% of the total revenue generated by land-use projects. Furthermore, initiatives that integrate co-benefits have shown 15–20% higher levels of community participation and stakeholder engagement. These additional values not only increase the financial attractiveness of forestry credits but also appeal to impact-driven investors and ESG-conscious corporations.

Community Participation and Social Responsibility Mandates:

The integration of community involvement and social safeguards into carbon credit projects has become a defining characteristic of high-quality forestry initiatives. Today, 70% of land-use carbon projects require Free, Prior, and Informed Consent (FPIC) from local communities to meet certification standards. Revenue-sharing models ensure that communities receive 20–50% of the net proceeds from carbon credit sales, providing both financial incentive and long-term support. Reports indicate that forestry projects with strong social inclusion mechanisms retain community support at rates 60–80% higher than those without. Additionally, local employment plays a central role, with 85% of forestry projects employing community members for implementation and monitoring tasks. More than 40% of these projects also incorporate formal protections for land tenure and labor rights in their contractual frameworks. Such practices reduce the risk of project failure due to social conflict and ensure long-term sustainability by aligning environmental goals with local livelihoods.

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Key Market Challenges

Lack of Standardization and Fragmented Verification Practices:

One of the core challenges in the Forestry and Land Use Carbon Credit Market is the absence of globally standardized methodologies for project development, credit issuance, and monitoring. Despite the presence of leading frameworks like Verra and Gold Standard, the criteria, procedures, and verification rigor often vary significantly between standards. This inconsistency creates uncertainty among buyers, particularly institutional investors who demand reliability and uniformity. Projects developed under less rigorous standards risk being considered low quality, even if their actual environmental impact is significant. Moreover, different jurisdictions often enforce their own rules, which may not align with international practices, further fragmenting the market. For example, one country's registry system may not be interoperable with another’s, complicating cross-border transactions. This fragmentation also makes it difficult for third-party auditors and investors to evaluate project integrity, which can slow down due diligence processes and inflate administrative costs. Ultimately, the lack of standardization reduces scalability, hinders global market efficiency, and increases the risk of reputational damage for credit purchasers.

Uncertainty Around Permanence and Reversal Risk:

Permanence refers to the duration for which carbon remains sequestered in forests, and in the context of land-use credits, this is a critical and unresolved issue. Forestry projects are vulnerable to natural disturbances such as wildfires, droughts, pests, and disease, which can reverse years of carbon storage in a short time. In many regions, increasing climate volatility exacerbates these risks, making permanence difficult to guarantee. Additionally, human-induced threats like illegal logging or shifting land use can further compromise the long-term integrity of forest carbon stocks. While buffer pools and insurance mechanisms exist to mitigate these risks, they are often insufficient or inconsistently applied. The credibility of the market is further undermined when high-profile reversals occur, especially when no replacement credits are available to offset the loss. This uncertainty discourages long-term investments and limits the willingness of companies to rely on land-use credits for their emissions targets. It also presents accounting challenges, as purchasers may be required to reassess or retire additional credits to maintain carbon neutrality over time. Without robust guarantees of permanence, the legitimacy and financial value of forestry carbon credits remain under threat.

Additionality Concerns and Over-Crediting Risks:

Additionality—the principle that carbon credits should only be issued for emission reductions or removals that wouldn’t have occurred without the project—is fundamental to market integrity. However, proving additionality is especially challenging in forestry and land-use projects. Land-use dynamics are complex and often driven by multiple socio-economic and political factors, making it difficult to establish what would have happened in a project’s absence. For example, a reforestation project in a region with no prior deforestation risk may claim credit for planting trees that would have grown naturally or been planted anyway. Similarly, some REDD+ projects may claim avoided deforestation based on inflated or outdated baseline data, leading to over-crediting. The problem is further complicated by weak or outdated modeling techniques and incentives for project developers to maximize credit issuance. When credits are issued for non-additional or marginal activities, it undermines the environmental value of the market. This can lead to the artificial inflation of credit supply, distortion of prices, and erosion of buyer trust. For buyers focused on transparency and impact, such risks reduce the attractiveness of forestry offsets and shift preference toward engineered removal technologies, where additionality is easier to verify.

Limited Project Financing and High Upfront Costs:

Forestry and land-use carbon credit projects often involve high initial capital requirements, extended timelines, and substantial ongoing maintenance costs. Unlike technology-based offset projects such as direct air capture or renewable energy installations, forestry projects typically require upfront investment in land acquisition or lease, community engagement, ecological assessments, and planting or conservation efforts. Moreover, the timeline to credit issuance can span several years, during which no revenue is generated. These financial burdens are a significant deterrent for smaller developers or conservation NGOs. Access to concessional or patient capital is also limited, especially in emerging markets where forestry projects are most viable. Financial institutions are often reluctant to back such projects due to perceived risks like political instability, unclear land tenure rights, or fluctuating carbon prices. Additionally, there is often insufficient access to blended finance models that combine private investment with public or philanthropic funding to reduce risk. As a result, many high-potential projects remain unrealized or underfunded. Without scalable financing solutions, the global supply of credible forestry carbon credits may not meet surging demand, creating a market bottleneck and hampering long-term impact.

Social and Land Tenure Conflicts:

One of the most sensitive challenges in the Forestry and Land Use Carbon Credit Market is the potential for social conflicts arising from unclear or contested land tenure. Many carbon projects are developed in regions with indigenous populations, customary land rights, or limited legal documentation of ownership. In such cases, carbon project developers may face difficulties in securing free, prior, and informed consent (FPIC) from all affected stakeholders. If land rights are not clearly defined, there is a risk that communities may be excluded from project benefits or displaced, leading to reputational damage and legal challenges. Even well-intentioned projects can unintentionally disrupt traditional livelihoods, fuel resentment, or exacerbate local inequalities. Additionally, project benefits such as carbon revenue sharing or employment opportunities may not be equitably distributed, further aggravating tensions. When conflicts occur, they not only jeopardize project continuity but also compromise the credibility of the entire market. Investors and buyers are increasingly aware of these risks and may avoid projects without robust social safeguards. Therefore, resolving land tenure issues, ensuring inclusive governance, and embedding social equity into carbon credit frameworks are essential for long-term market resilience.

Key Market Trends

Shift Toward High-Integrity and Co-Benefit-Certified Projects:

There is a clear market trend favoring carbon credit projects that not only deliver measurable carbon sequestration but also offer certified co-benefits related to biodiversity, social equity, and sustainable development. Buyers are becoming increasingly selective, preferring credits from projects that adhere to high-integrity standards and third-party verification frameworks. Certifications such as Verra’s Climate, Community & Biodiversity (CCB) Standards and the Gold Standard are gaining traction as companies aim to align carbon offsetting with broader ESG and UN SDG (Sustainable Development Goals) compliance. The result is an emerging two-tier market: one for generic carbon offsets and another for premium, multi-benefit projects that can command higher prices due to their social and environmental value. This trend is also shaping project design, with developers intentionally integrating community engagement, indigenous rights, habitat conservation, and gender equity considerations into their proposals. Some institutional buyers now require independent assessments of a project’s biodiversity footprint before committing to purchases. As awareness of carbon market criticism grows, the emphasis on high-integrity projects is helping restore trust and reinforce the legitimacy of forestry-based credits. This shift is also enabling long-term partnerships between developers and buyers, based on transparency and shared values.

Emergence of Regional Carbon Trading Frameworks Incorporating Land Use:

The development of regional carbon trading systems that integrate land use and forestry offsets is becoming a defining trend. While voluntary markets have traditionally led the way, national and sub-national compliance markets are now beginning to incorporate nature-based credits into their regulatory frameworks. Countries such as Colombia, Indonesia, and New Zealand have already established systems that accept forestry credits, while the EU is actively exploring mechanisms to include land use, land-use change, and forestry (LULUCF) sectors in its post-2030 climate strategy. Subnational programs like California’s Cap-and-Trade and the Canadian Clean Fuel Regulations provide concrete examples of how land-use credits can be scaled under formal regulatory oversight. These regional frameworks are often more flexible than international mechanisms and allow for localized methodologies suited to specific ecosystems and legal contexts. They also offer a clearer pricing signal and regulatory certainty for developers, encouraging long-term investment in carbon forestry. Furthermore, these frameworks often include safeguards for additionality, permanence, and leakage—building greater confidence in the environmental integrity of credits. As more governments seek to meet their nationally determined contributions (NDCs) under the Paris Agreement, land-based offsets are poised to play a critical role in regional compliance systems and international trading platforms.

Growing Emphasis on Jurisdictional and Nested REDD+ Approaches:

Another major trend shaping the forestry carbon credit market is the shift toward jurisdictional and nested REDD+ models. These approaches scale carbon crediting from individual project sites to entire provinces or national territories, helping to align carbon finance with governmental climate strategies. Jurisdictional REDD+ ensures that emission reductions are not only measurable and verifiable, but also address leakage and permanence across broader landscapes. Under the nested approach, individual projects are “nested” within a larger regional accounting framework, allowing both project and jurisdictional actors to share credit issuance and benefit flows. This model improves policy coherence and helps integrate REDD+ into national carbon registries, making it more compatible with Article 6 mechanisms under the Paris Agreement. Countries like Costa Rica, Peru, and Indonesia are actively piloting jurisdictional REDD+ systems with international support. The appeal of such frameworks lies in their ability to mobilize large-scale climate finance while promoting forest governance, land tenure reform, and multi-stakeholder collaboration. These models also support the transition from donor-driven forest protection to self-sustaining carbon finance systems. As carbon buyers seek large volumes of high-integrity credits, jurisdictional REDD+ is emerging as a strategic pathway to address scale, accountability, and long-term impact.

Segmental Insights

Project Type Insights

Afforestation segment dominates in the Global Forestry and Land Use Carbon Credit market in 2024 due to its scalability, clarity of carbon accounting, and alignment with both corporate and governmental climate strategies. Afforestation involves planting trees on lands that were previously non-forested, allowing for a clearly measurable increase in carbon sequestration. Unlike REDD+ projects, which often struggle with proving additionality or preventing leakage, afforestation projects offer more straightforward baselines and verifiable carbon gains, making them more attractive to both voluntary and compliance carbon markets.

The simplicity of afforestation methodologies contributes to faster project registration and issuance of credits. As of 2024, over 35% of total land-use carbon credits issued globally are from afforestation projects, marking a significant lead over other segments. Moreover, these projects are often located in degraded lands or arid zones where forest expansion does not interfere with existing land tenure or agricultural use, minimizing social resistance and conflict.

Governments and corporations alike have prioritized afforestation as a cornerstone of net-zero goals. Several nations, including China, India, Brazil, and the United States, have launched large-scale afforestation campaigns under national climate action plans. In China alone, more than 2 million hectares of land have been planted with trees under carbon offset schemes in the last two years. Similarly, corporate buyers prefer afforestation credits for their high permanence potential and lower reputational risk.

Additionally, afforestation projects are increasingly bundled with biodiversity and ecosystem restoration benefits, which command premium prices in voluntary markets. These projects also offer more immediate visual and ecological benefits, enhancing their appeal in public-facing corporate sustainability reports. With strong policy backing, low implementation complexity, and high investor confidence, the afforestation segment has emerged as the most dominant and bankable segment in the Forestry and Land Use Carbon Credit Market in 2024.

Credit Type Insights

Verified Carbon Units segment dominated the Global Forestry and Land Use Carbon Credit market in 2024 due to its wide acceptance, high credibility, and rigorous validation under the Verra Verified Carbon Standard (VCS). VCUs are trusted by both voluntary and compliance buyers for their robust methodologies, strong monitoring and reporting protocols, and alignment with global carbon accounting norms. Over 70% of forestry-related carbon credits in the voluntary market were issued as VCUs in 2024, as corporate buyers increasingly prioritize transparency and environmental integrity. Their compatibility with co-benefit certifications further strengthened market demand and investor confidence.

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Regional Insights

Largest Region

North America dominates the Global Forestry and Land Use Carbon Credit market in 2024 due to a combination of mature regulatory frameworks, strong corporate participation, and technological advancements in project monitoring and verification. The region benefits from well-established compliance markets such as California’s Cap-and-Trade Program and the Regional Greenhouse Gas Initiative (RGGI), which have incorporated forest carbon offsets for over a decade. These programs have set precedents for the integration of land-based credits into policy mechanisms, encouraging the development of large-scale forest carbon projects, particularly in the United States and Canada.

Corporate demand is another key driver of North America’s dominance. A significant portion of global voluntary carbon offset purchases in 2024 originated from U.S.-based companies. Leading firms across sectors—particularly technology, finance, retail, and energy—have adopted aggressive net-zero commitments, with many prioritizing domestic forestry projects to meet internal ESG and stakeholder expectations. North America’s sophisticated investor base also favors land-use credits verified under high-integrity standards like Verra and American Carbon Registry, which are widely used across the region.

Technological infrastructure further enhances North America’s leadership. The region is a hub for advanced remote sensing, AI-based forest monitoring, and digital MRV (measurement, reporting, and verification) systems, which enable high-accuracy carbon accounting and reduce project risks. In Canada, extensive boreal forests and reforestation initiatives across British Columbia and Quebec have significantly expanded afforestation and improved forest management projects.

Moreover, North America benefits from stable governance, clear land tenure laws, and institutional support from NGOs and public agencies, all of which reduce the barriers to project development and long-term credit issuance. With strong policy support, active corporate engagement, and technological leadership, North America has firmly established itself as the most dominant regional market for forestry and land-use carbon credits in 2024.

Emerging Region

Europe is the emerging region in the Global Forestry and Land Use Carbon Credit market in the coming period due to increasing policy alignment with climate goals, expanding voluntary carbon market participation, and rising demand for nature-based solutions. The European Union’s climate strategy post-2030 emphasizes the integration of land use and forestry under the LULUCF regulation. Additionally, corporate buyers across Europe are actively seeking high-integrity, co-benefit carbon credits to meet ESG obligations. Countries like France, Germany, and the Netherlands are promoting domestic afforestation and rewilding initiatives, supported by public funding and private investment, positioning Europe as a rapidly growing contributor to global forestry credits.

Recent Developments

• In September 2024, Riverse, a leading carbon credit standard for industrial greentech decarbonization, has partnered with Oklima, a subsidiary of EDF Group specializing in climate and biodiversity-positive projects. This strategic collaboration aims to enhance transparency and innovation in the carbon credit market. By combining Riverse’s rigorous certification for greentech initiatives with Oklima’s commitment to accessible emissions reduction, the partnership seeks to strengthen the credibility and adoption of high-quality carbon credits across industrial sectors, advancing global decarbonization and sustainable development efforts.
• In March 2025, Kazakhstan’s Ministry of Ecology and Natural Resources, in collaboration with Zhasyl Damu JSC and supported by the World Bank, has launched the Partnership for Market Implementation (PMI) Project to advance the country’s carbon market. As Central Asia’s pioneer in carbon pricing, Kazakhstan aims to enhance the effectiveness and global alignment of its Emissions Trading System. Backed by a USD4.8 million PMI Trust Fund grant, the initiative will run through June 2028, supporting Kazakhstan’s transition toward resilient, low-carbon growth.
• In May 2025, Northern Trust has entered into a strategic agreement with the UK-based Ecosystem Certification Organisation (ECO) to support digital carbon credit management under the Natural Forest Standard (NFS). This partnership enhances transparency and security in the voluntary carbon market. Northern Trust will provide custodial, recordkeeping, and settlement services for NFS-certified credits, which represent verified emissions reductions and biodiversity benefits from large-scale forest conservation projects. The collaboration reflects growing demand for high-integrity, forest-based climate solutions among global investors and sustainability-focused stakeholders.
• In September 2024, Verra, a global leader in climate standards, has signed a Memorandum of Understanding with Türkiye’s energy exchange EPİAŞ to enable exchange-based trading of Verra-certified carbon credits. Announced during Climate Week NYC, this partnership marks a milestone in carbon market development, offering a regulated, efficient, and transparent platform for buyers and sellers. The initiative is expected to increase liquidity, price discovery, and market confidence for Verra credits, supporting emissions reduction goals and accelerating the global carbon trading ecosystem.

Key Market Players

• South Pole    
• The Nature Conservancy
• Wildlife Works
• BioCarbon Partners
• InfiniteEARTH
• Verra
• Climate Focus
• Terra Global Capital
• Finite Carbon
• GreenCollar       

Report Scope:

In this report, the Global Forestry and Land Use Carbon Credit Market has been segmented into the following categories, in addition to the industry trends which have also been detailed below:

•  Forestry and Land Use Carbon Credit Market, By Project Type:

o   Afforestation

o   Avoided Deforestation

o   Agroforestry

o   Soil Carbon Sequestration

o   Others

• Forestry and Land Use Carbon Credit Market, By Credit Type:

o   Verified Carbon Units

o   Certified Emission Reductions

o   Gold Standard Credits

o   Others

• Forestry and Land Use Carbon Credit Market, By End-User:

o   Energy & Utilities

o   Manufacturing

o   Transport & Logistics

o   Agriculture

o   Others

• Forestry and Land Use Carbon Credit Market, By Region:

o   North America

§  United States

§  Canada

§  Mexico

o   Europe

§  Germany

§  France

§  United Kingdom

§  Italy

§  Spain

o   South America

§  Brazil

§  Argentina

§  Colombia

o   Asia-Pacific

§  China

§  India

§  Japan

§  South Korea

§  Australia

o   Middle East & Africa

§  Saudi Arabia

§  UAE

§  South Africa

Competitive Landscape

Company Profiles: Detailed analysis of the major companies present in the Global Forestry and Land Use Carbon Credit Market.

Available Customizations:

Global Forestry and Land Use Carbon Credit Market report 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).

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