Market Summary
Global Carbon Offset/Carbon Credit Market Overview
As per MRFR analysis, the Carbon Offset/Carbon Credit Market Size was estimated at 944.57 (USD Billion) in 2024. The Carbon Offset/Carbon Credit Market Industry is expected to grow from 1,247.03 (USD Billion) in 2025 to 15,192.88 (USD Billion) till 2034, at a CAGR (growth rate) is expected to be around 32.20% during the forecast period (2025 - 2034). Increased global awareness and commitment to combat climate change and regulatory and policy support are the key market drivers enhancing growth of the market.
Source: The Secondary Research, Primary Research, MRFR Database and Analyst Review
June 2024: WGL Holdings announced a partnership with a renewable energy project to enhance their carbon offset portfolio. The initiative aims to invest in wind and solar energy projects to offset the carbon footprint of their operations.
Carbon Offset/Carbon Credit Market Trends
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Growing global awareness and commitment to combat climate change is driving the market growth
Market CAGR for carbon offset/carbon credit is being driven by the rising global awareness and commitment to combat climate change. As concerns about the environmental impacts of carbon emissions and the urgency of mitigating climate change grow, governments, businesses, and individuals are increasingly recognizing the importance of reducing their carbon footprints. This heightened awareness is driving demand for carbon offsets and carbon credits as a means to offset or compensate for emissions that are challenging to eliminate entirely.
Many countries and regions have made commitments under international agreements like the Paris Agreement to reduce their greenhouse gas emissions. These commitments often include ambitious targets to limit global temperature rise. To meet these targets, governments and organizations must take concrete actions to reduce emissions. While efforts are made to reduce emissions through energy efficiency, renewable energy adoption, and sustainable practices, it's often challenging to eliminate all emissions completely.
Some sectors, like aviation or certain industrial processes, may have emissions that are difficult to eliminate with current technology. Carbon offsets and carbon credits provide a mechanism to address emissions that are challenging to reduce directly. These instruments allow entities to invest in projects that either capture or reduce an equivalent amount of greenhouse gases elsewhere. This can include reforestation projects, renewable energy development, methane capture from landfills, and more.
The surging awareness of the need to address climate change has led to grown demand for carbon offsets and credits. Governments, corporations, and individuals are willing to purchase these instruments as a way to take responsibility for their emissions and contribute to global climate goals. Many businesses see carbon offsetting as part of their corporate social responsibility initiatives.
They may voluntarily purchase carbon credits to demonstrate their commitment to sustainability and climate action. Some governments have introduced regulations or incentives to encourage the use of carbon offsets and credits. This can include carbon pricing mechanisms, tax incentives, or emissions trading schemes that drive market growth. The Carbon Offset/Carbon Credit industry offers investment opportunities in sustainable projects. This can attract financial institutions and investors seeking both financial returns and positive environmental impact. Thus driving the market revenue.
Carbon Offset/Carbon Credit Market Segment Insights
Carbon Offset/Carbon Credit Type Insights
The Carbon Offset/Carbon Credit Market segmentation, based on type, includes the Compliance Market and the Voluntary Market. The voluntary market segment dominates the market, accounting for the largest market revenue, and allows a wide range of organizations and individuals to participate voluntarily in carbon offsetting, making it highly inclusive. Moreover, many individuals and companies choose to voluntarily offset their emissions as the part of their sustainability and corporate social responsibility (CSR) initiatives. The voluntary market often encourages innovation in carbon offset projects. It fosters a variety of projects beyond regulatory compliance, and the market is not confined by regional or national regulations, allowing for global participation.
Figure 1: Carbon Offset/Carbon Credit Market, by Type, 2024 & 2032 (USD Billion)
Source: The Secondary Research, Primary Research, MRFR Database and Analyst Review
Carbon Offset/Carbon Credit Project Type Insights
The Carbon Offset/Carbon Credit Market segmentation, based on project type, includes Avoidance/Reduction Projects and Removal/Sequestration Projects. The removal/sequestration projects category dominates the market as they are highly effective at capturing and storing carbon dioxide (CO2) from the atmosphere. Removal/Sequestration Projects offer a tangible way to remove more CO2 from atmosphere than they emit, making them attractive for offsetting emissions. Companies and investors are increasingly focusing on sustainability and environmental, social, and governance (ESG) factors.
Investing in Removal/Sequestration Projects aligns with these goals, as it demonstrates a commitment to mitigating climate change and protecting biodiversity. Carbon credits generated from Removal/Sequestration Projects are versatile and can be utilized by a wide range of industries and organizations to offset emissions.
Carbon Offset/Carbon Credit End User Insights
The Carbon Offset/Carbon Credit Market segmentation, based on end user, includes Power, Energy, Aviation, Transportation, Industrial, Buildings and Others. The industrial category dominates the market. They often invest in carbon offset projects to compensate for their emissions. These projects could include initiatives like methane capture from landfills, energy-efficient industrial processes, or reforestation efforts. The industrial sector's emissions can be substantial, making it a significant contributor to the demand for carbon offsets and credits. Further, the power segment is anticipated to be the second-largest, where electricity generation is a major source of emissions, and utilities purchase carbon credits to offset these emissions.
Carbon Offset/Carbon Credit Regional Insights
By region, the study givees market insights into the North America, Europe, Asia-Pacific and the Rest of the World. The North American Carbon Offset/Carbon Credit market area dominates this market, owing to a combination of supportive regulatory frameworks, corporate commitment to sustainability, a wide range of offset project options, and a growing awareness of climate change and environmental responsibility. These factors have collectively contributed to the region's leadership in the market.
Further, the main countries studied in the market report are The US, Canada, Germany, France, the UK, Italy, Spain, Japan, China, India, Australia, South Korea, and Brazil.
Figure 2: Carbon Offset/Carbon Credit Market Share By Region 2022 (USD Billion)
Source: The Secondary Research, Primary Research, MRFR Database and Analyst Review
Europe's Carbon Offset/Carbon Credit market accounts for the second-largest market share due to the European Union Emissions Trading System (EU ETS), which is one of the world's largest and most comprehensive cap-and-trade programs, mandating emissions reductions and creating a robust demand for carbon credits within the region. Further, the German Carbon Offset/Carbon Credit market held the largest market revenue, and the UK Carbon Offset/Carbon Credit market was the fastest-growing market in the European region.
The Asia-Pacific Carbon Offset/Carbon Credit Market is expected to grow at the rapid CAGR from 2025 to 2034. This is due to the rapid economic growth, increasing industrialization, and the urbanization in the region, and governments seek ways to mitigate the associated rise in greenhouse gas emissions and comply with international climate goals. Moreover, China’s Carbon Offset/Carbon Credit market held the largest market share, and the Indian Carbon Offset/Carbon Credit market was the fastest-growing market in the Asia-Pacific region.
Carbon Offset/Carbon Credit Key Market Players & Competitive Insights
Leading market players are investing heavily in the research and development in order to expand their product lines, which will help the Carbon Offset/Carbon Credit market grow even more. Market players are also undertaking a variety of strategic activities to spread their global footprint, with important market developments including contractual agreements, new product launches, mergers and acquisitions, higher investments, and collaboration with other organizations. To spread and survive in a more competitive and rising market climate, the Carbon Offset/Carbon Credit industry must offer cost-effective items.
Manufacturing locally to minimize the operational costs is one of the key business tactics used by teh manufacturers in the global Carbon Offset/Carbon Credit industry to benefit the clients and increase the market sector. In recent years, this industry has offered some of the most significant advantages to the environment. Major participants in the Carbon Offset/Carbon Credit market, including WGL Holdings, Inc., Enking International, Green Mountain Energy, Native Energy, Cool Effect, Inc., Clear Sky Climate Solutions, Sustainable Travel International, 3 Degrees, Terrapass, Sterling Planet, Inc., and others, are attempting to increase market demand by investing in the research and development operations.
AXA Investment Managers (AXA IM) is a global asset management firm and a subsidiary of the AXA Group, one of the world's largest insurance and financial services companies. The company provides a wide range of asset management services, including investment solutions across various asset classes such as equities, fixed income, multi-asset, real assets, and alternative investments. AXA IM caters to a diverse set of clients, including pension funds, insurance companies, sovereign wealth funds, and individual investors.
In September 2023, AXA IM, the asset management arm of AXA Group, acquired ClimateSeed, a carbon offsetting platform that connects businesses with carbon reduction projects. ClimateSeed has a portfolio of 36 projects in 24 countries, with a total capacity of over 4 million verified carbon credits. The acquisition will allow AXA IM to offer its clients a more comprehensive range of sustainability solutions.
3Degrees is a company that specializes in environmental sustainability and renewable energy solutions. 3Degrees is a renewable energy and sustainability services company headquartered in San Francisco, California. The company was founded in 2007 with a mission to help organizations and individuals take action on climate change and minimize their environmental impact. In November 2023, 3Degrees, a sustainability consulting firm, partnered with Merge Electric Fleet Solutions, a provider of electric vehicle (EV) charging infrastructure.
The partnership will provide Merge's fleet customers with access to actionable analysis and decades of expertise in carbon reduction and renewable energy. 3Degrees will also monetize Merge's charging in the clean fuels states of California, Oregon, and Washington and offset all EV charging with renewable energy credits (RECs)
Key Companies in the Carbon Offset/Carbon Credit market include
- Enking International
- Green Mountain Energy
- Native Energy
- Cool Effect, Inc.
- Clear Sky Climate Solutions
- Sustainable Travel International
- 3 Degrees
- Terrapass
- Sterling Planet, Inc.
Carbon Offset/Carbon Credit Industry Developments
October 2023: ClimateSeed and Microsoft partnered to launch a new platform that will help businesses purchase carbon credits to offset their carbon emissions. The platform will provide businesses with access to a wide range of carbon offset projects, including renewable energy, forestry, and energy efficiency projects.
August 2022: Johnson Controls, a global leader in building technologies and solutions, has collaborated with 3Degrees to accelerate its race to net zero. The collaboration will fast-track Johnson Controls' net zero goals through carbon reduction services, including carbon offsetting.
May 2023: JPMorgan Chase acquired OpenInvest, a sustainable investing platform. OpenInvest provides individuals and businesses with access to a variety of sustainable investment options, including Carbon offset funds.
January 2025
BeZero Carbon Enhances Transparency in Carbon Credit Ratings
BeZero carbon implements an independent carbon credit rating system on a scale of AAA-D based on the determined CO2 removal or avoidance of a project. The company was founded in 2022 by Tommy Ricketts and Sebastien Cross, has maintained robust venture capital funding, most recently from GenZero, which has invested $32 million. BeZero Carbon currently works with over 150 clients, including many major tech companies in the US and global financial organizations. In addition, BeZero seeks to tackle integrity concerns within the carbon credit market through their detailed assessments that aid investors in understanding the market better.
November 2024
Shell Leads Global Carbon Credit Market Amid Industry Shifts
In 2024, Shell became the leader in dominating the $1.4 billion carbon credits market from 2024, where they retired 14.9 million credits which is almost double that of Italian energy producer Enis and almost triple that of Microsoft. This behavior allows oil and gas companies to offset their climate goals without having to directly invest in clean energy. This emerging trend suggests that these companies have begun adopting a more relaxed approach toward direct investments in clean energy. As for the voluntary carbon market, there are still concerns such as fraud or double counting which have made some companies reconsider their level of engagement in the market.
Crédit Agricole CIB Moves Focus Toward Carbon Trading
In a notable development, one of the major listed banks of France, namely Crédit Agricole, shares that from 2025, it will switch its focus from trading on precious metals to operating on regulated carbon markets, specifically, the EU Emissions Trading System (ETS). The strategic enactment is consistent with the bank’s green policies and takes advantage of the increasing value of the ETS that comprised 87% of the global carbon market value in 2023. The choice also demonstrates a growing trend on the part of financial services companies to enter into sustainable investments.
Carbon Offset/Carbon Credit Market Segmentation
Carbon Offset/Carbon Credit Type Outlook
- Compliance Market
- Voluntary Market
Carbon Offset/Carbon Credit Project Type Outlook
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
Carbon Offset/Carbon Credit End User Outlook
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
Carbon Offset/Carbon Credit Regional Outlook
- North America
- US
- Canada
- Europe
- Germany
- France
- UK
- Italy
- Spain
- Rest of Europe
- Asia-Pacific
- China
- Japan
- India
- Australia
- South Korea
- Australia
- Rest of Asia-Pacific
- Rest of the World
- Middle East
- Africa
- Latin America
Market Size & Forecast
| Report Attribute/Metric | Details |
|
Market Size 2024 |
944.57 (USD Billion) |
|
Market Size 2025 |
1,247.03 (USD Billion) |
|
Market Size 2034 |
15,192.88 (USD Billion) |
|
Compound Annual Growth Rate (CAGR) |
32.20% (2025 - 2034) |
|
Report Coverage |
Revenue Forecast, Competitive Landscape, Growth Factors, and Trends |
|
Base Year |
2024 |
|
Market Forecast Period |
2025 - 2034 |
|
Historical Data |
2019 - 2023 |
| Report Coverage | Revenue Forecast, The Market Competitive Landscape, Growth Factors, and Trends |
| Segments Covered | Type, Project Type, End User and Region |
| Geographies Covered | North America, Europe, Asia Pacific, and the Rest of the World |
| Countries Covered | The US, Canada, Germany, France, UK, Italy, Spain, Japan, China, India, Australia, South Korea, and Brazil |
| Key Companies Profiled | WGL Holdings, Inc., Enking International, Green Mountain Energy, Native Energy, Cool Effect, Inc., Clear Sky Climate Solutions, Sustainable Travel International, 3 Degrees, Terrapass, and Sterling Planet, Inc. |
| Key Market Opportunities | The increasing adoption of carbon offset programs. |
| Key Market Dynamics | Increased global awareness and commitment to combat climate change and regulatory and policy support. |
Major Players
Carbon Offset/Carbon Credit Market Segmentation
Carbon Offset/Carbon Credit Type Outlook (USD Billion, 2018-2032)
- Compliance Market
- Voluntary Market
Carbon Offset/Carbon Credit Project Type Outlook (USD Billion, 2018-2032)
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
Carbon Offset/Carbon Credit End User Outlook (USD Billion, 2018-2032)
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
Carbon Offset/Carbon Credit Regional Outlook (USD Billion, 2018-2032)
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North America Outlook (USD Billion, 2018-2032)
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North America Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
North America Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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North America Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- US Outlook (USD Billion, 2018-2032)
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US Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
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US Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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US Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- CANADA Outlook (USD Billion, 2018-2032)
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CANADA Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
CANADA Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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CANADA Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
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Europe Outlook (USD Billion, 2018-2032)
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Europe Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
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Europe Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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Europe Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Germany Outlook (USD Billion, 2018-2032)
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Germany Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
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Germany Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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Germany Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- France Outlook (USD Billion, 2018-2032)
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France Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
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France Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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France Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- UK Outlook (USD Billion, 2018-2032)
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UK Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
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UK Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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UK Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- ITALY Outlook (USD Billion, 2018-2032)
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ITALY Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
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ITALY Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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ITALY Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- SPAIN Outlook (USD Billion, 2018-2032)
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Spain Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
Spain Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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Spain Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Rest Of Europe Outlook (USD Billion, 2018-2032)
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Rest Of Europe Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
REST OF EUROPE Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
-
REST OF EUROPE Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
-
Asia-Pacific Outlook (USD Billion, 2018-2032)
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Asia-Pacific Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
Asia-Pacific Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
-
Asia-Pacific Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- China Outlook (USD Billion, 2018-2032)
-
China Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
China Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
-
China Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Japan Outlook (USD Billion, 2018-2032)
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Japan Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
Japan Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
-
Japan Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- India Outlook (USD Billion, 2018-2032)
-
India Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
India Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
-
India Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Australia Outlook (USD Billion, 2018-2032)
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Australia Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
Australia Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
-
Australia Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Rest of Asia-Pacific Outlook (USD Billion, 2018-2032)
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Rest of Asia-Pacific Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
Rest of Asia-Pacific Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
-
Rest of Asia-Pacific Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
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Rest of the World Outlook (USD Billion, 2018-2032)
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Rest of the World Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
Rest of the World Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
-
Rest of the World Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Middle East Outlook (USD Billion, 2018-2032)
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Middle East Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
Middle East Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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Middle East Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Africa Outlook (USD Billion, 2018-2032)
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Africa Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
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Africa Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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Africa Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
- Latin America Outlook (USD Billion, 2018-2032)
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Latin America Carbon Offset/Carbon Credit By Type
- Compliance Market
- Voluntary Market
-
Latin America Carbon Offset/Carbon Credit By Project Type
- Avoidance/Reduction Projects
- Removal/Sequestration Projects
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Latin America Carbon Offset/Carbon Credit By End User
- Power
- Energy
- Aviation
- Transportation
- Industrial
- Buildings
- Others
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Rest of the World Carbon Offset/Carbon Credit By Type
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Asia-Pacific Carbon Offset/Carbon Credit By Type
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Europe Carbon Offset/Carbon Credit By Type
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North America Carbon Offset/Carbon Credit By Type
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