February 25, 2024

Carbon Offset Market Growth Driven By Rising Environmental Awareness

The global Carbon Offset Market Is estimated to be valued at US$ 414.80 Billion in 2023 and is expected to exhibit a CAGR Of 31.7% over the forecast period 2023 To 2030, as highlighted in a new report published by Coherent Market Insights.

Market Overview:

The carbon offset market deals with credits generated from projects that reduce greenhouse gas emissions. These credits can be purchased by individuals and organizations to offset their own emissions, such as from electricity use, commuting by air, and other carbon-generating activities. The benefits of carbon offsetting include helping organizations achieve carbon neutrality targets, reducing emissions at low costs compared to internal abatement programs, and supporting verified emissions reduction projects across the globe. The need for carbon offsetting is driven by rising environmental awareness and regulations such as carbon pricing programs that enforce mandatory emissions cuts.

Market key trends:

The increasing adoption of carbon neutral programs by corporations is a major trend in the carbon offset market. Large companies in sectors like technology, consumer goods, and energy are committing to carbon neutral goals through 2030-2050 in response to investor and public pressure. This is creating strong demand for high-quality carbon offsets that can help organizations transition to low-carbon business models. Another key trend is the growth of carbon offset financing for forestry projects, such as those that prevent deforestation or support reforestation activities. Forestry projects provide one of the most cost-effective means of carbon sequestration and are becoming increasingly popular compliance offset programs.

Porter’s Analysis

Threat of new entrants: Low barriers to entry due to availability of low-cost solutions. However, established brands dominate the market.

Bargaining power of buyers: Buyers have moderate to high bargaining power due to the availability of substitutes and competitive market.

Bargaining power of suppliers: Suppliers have low bargaining power as they depend on global brands for generating revenue.

Threat of new substitutes: Moderate threat due to availability of substitutes like renewable energy, energy efficiency programs.

Competitive rivalry: High competition due to the presence of global brands and low product differentiation. Players focus on expanding their portfolio and customer base.

Key Takeaways

The global Carbon Offset Market is expected to witness high growth, exhibiting CAGR of 31.7% over the forecast period, due to increasing awareness about carbon neutrality and government initiatives to cut emissions.

The market size was valued at US$ 414.80 billion in 2023. Regionally, North America dominated the market with over 25% share in 2023 due to stringent environmental regulations. Asia Pacific is expected to witness the fastest growth during the forecast period supported by energy transition in major economies like China and India.

Key players operating in the carbon offset market are 3Degrees Inc., NativeEnergy, ClimatePartner, Carbon Credit Capital, Terrapass, Renewable Choice Energy, Gold Standard, Offsetters, South Pole Group, Veridium, Cool Effect, ClimateCare, MyClimate, Forest Carbon, Verified Carbon Standard. Players focus on expanding their global footprint and offering customized solutions to enterprises and individuals to achieve carbon neutrality commitments.

*Note:

  1. Source: Coherent Market Insights, Public sources, Desk research
  2. We have leveraged AI tools to mine information and compile it