Carbon Credits Market Set to Transform with US$ 4,983.7 Billion Valuation by 2035 | Astute Analytica
The carbon credit market is fundamentally propelled by a combination of rising global carbon emissions, urgent climate action imperatives, and the widespread adoption of carbon pricing mechanisms. As industries and nations grapple with escalating greenhouse gas emissions, the demand for effective tools to mitigate climate impact has intensified. Following Europe, North America, and the Asia Pacific represent critical and rapidly growing segments of the carbon credit market. North America benefits from advancing regulatory initiatives, such as California’s Cap-and-Trade Program and emerging federal policies.
Chicago, Jan. 15, 2026 (GLOBE NEWSWIRE) — According to recent data from Astute Analytica, the global carbon credit market was valued at US$ 1,142.40 billion in 2024 and is projected to hit the market valuation of US$ 4,983.7 billion by 2035 at a CAGR of 18% during the forecast period 2025–2035.
The carbon credit market is on the cusp of unprecedented growth, largely propelled by robust corporate demand. In 2023 alone, companies retired an impressive 161 million carbon credits, reflecting a strong and sustained commitment to climate action. This momentum is further bolstered by over 5,200 firms that have adopted Science Based Targets (SBTs), aligning their emissions reduction strategies with the latest climate science. These companies represent a diverse cross-section of industries, all actively driving demand for carbon credits as part of their sustainability commitments, making corporate action a primary engine behind the market’s rapid expansion.
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This surge in demand is creating a distinct bifurcation within the carbon credit market, separating credits by type, quality, and price. On one end of the spectrum, low-cost renewable energy credits are trading at modest prices, often as low as $1 to $2 per ton. These credits represent emissions reductions from renewable power projects and serve as accessible entry points for companies with basic offsetting needs. On the other end, premium nature-based credits—originating from projects like forest conservation and reforestation—command prices exceeding $12 per ton. These projects offer additional environmental and social co-benefits, contributing to their higher valuation.
Elevating Carbon Credits: From Offsets to Financial Assets
The carbon credit market is evolving far beyond its original role as a straightforward mechanism for offsetting emissions. Today, it is rapidly transforming into a sophisticated financial ecosystem where carbon credits are recognized as valuable financial assets. This formalization marks a pivotal trend that is reshaping the market’s growth trajectory.
A cornerstone of this financial evolution is the emergence of exchange-traded futures contracts for carbon credits. Platforms such as CME’s N-GEO futures have introduced standardized contracts that allow investors to buy and sell carbon credits on regulated exchanges. These futures contracts provide a level of price discovery, risk management, and market transparency that was previously elusive in the carbon market.
In parallel with futures trading, the launch of over 15 specialized carbon investment funds in 2023 signals a growing institutional appetite for carbon assets. These funds pool capital from institutional investors eager to gain exposure to the carbon market’s growth potential while supporting climate action. By offering professionally managed portfolios focused exclusively on carbon credits and related projects, these funds provide an efficient entry point into this emerging asset class.
Investment Flows and Compliance Markets Strengthen Supply Foundations: Global Carbon Credit Supply
The global carbon credit supply landscape is undergoing a significant transformation, fueled by targeted investment and the emergence of expansive compliance frameworks. Over the past decade, capital has increasingly gravitated towards regions that combine robust regulatory environments with abundant nature-based carbon sequestration potential. Between 2013 and 2023, nearly $42 billion was funneled into the development of carbon projects worldwide, underscoring the mounting financial commitment to climate solutions.
The momentum in investment shows no signs of slowing. In fact, 2024 is poised to become a record-breaking year for carbon credit fundraising, with $14 billion already committed or raised by the third quarter alone. This surge reflects heightened investor confidence and expanding interest among institutional players, corporations, and governments eager to participate in the carbon market.
Large-scale compliance markets are playing a pivotal role in reshaping the supply side of the carbon credit ecosystem. These regulatory frameworks establish mandatory emission reduction targets and create strong demand for verified carbon offsets, thereby incentivizing the development of high-quality projects. Regions with established compliance systems attract disproportionate investment and project activity, as market participants seek the certainty and legitimacy these frameworks provide.
Tech-Based Carbon Credits: Rising to Market Prominence
Technology-based carbon credits have rapidly ascended to a dominant position in the carbon credit market, capturing an impressive 46.9% share. This surge reflects a growing preference among buyers for solutions that provide permanent, reliable, and verifiable carbon removal. As climate goals become more ambitious and regulatory scrutiny intensifies, the demand for carbon credits backed by cutting-edge technologies has skyrocketed.
A key driver behind the popularity of tech-based carbon credits is their ability to deliver permanent removal of CO2 from the atmosphere. Unlike nature-based solutions, which are susceptible to risks such as forest fires, disease, or land-use changes that can release stored carbon back into the environment, technologies like Direct Air Capture (DAC) and Carbon Capture and Storage (CCS) provide a more secure and lasting solution.
Direct Air Capture (DAC) and Carbon Capture and Storage (CCS) technologies stand at the forefront of the tech-based carbon credit market. DAC systems actively extract CO2 directly from ambient air, concentrating it for storage or utilization, while CCS captures emissions at their source and safely stores them underground. Both methods offer scalability and measurable results, making them attractive solutions as industries strive to offset hard-to-abate emissions.
Carbon Removal Projects: The New Market Vanguard
Carbon removal projects have surged to dominate the market, commanding a remarkable 75.3% share that reflects a profound shift in global climate strategy. The focus has evolved from merely preventing future emissions to actively extracting existing carbon dioxide from the atmosphere. This pivot underscores the urgency of addressing legacy carbon, which accumulates from decades of industrial activity.
A significant portion of carbon removal projects leverages nature-based solutions, which utilize natural processes to capture and store carbon. A striking example from 2024 is an Amazon rainforest reforestation initiative that planted 10 million trees, with a projected CO2 removal potential of 2 million tonnes. These projects not only sequester carbon but also provide co-benefits such as biodiversity preservation, enhanced ecosystem resilience, and improved local livelihoods.
Alongside nature-based efforts, technological carbon removal solutions are rapidly advancing, contributing to the market’s dominant share. These include direct air capture, bioenergy with carbon capture and storage (BECCS), and mineralization techniques designed to extract and securely store CO2. Technological removals offer the advantage of scalability and permanence, often complementing nature-based projects.
Europe’s Commanding Lead in the Carbon Credit Market
Europe firmly holds a dominant position in the global carbon credit market, commanding over 51.10% of the market share. This leadership is rooted in the region’s well-established and mature compliance frameworks, which provide a robust regulatory foundation that drives both mandatory and voluntary carbon offsetting activities. Europe’s pioneering approach to carbon management has set a global benchmark, particularly through its emphasis on high-permanence carbon removals that ensure long-term environmental impact.
At the heart of Europe’s carbon credit market strength is the EU Emissions Trading System (ETS), which remains the world’s largest and most advanced carbon pricing mechanism. In 2024, allowances within the ETS consistently traded above €70 per tonne of CO2, reflecting the region’s intense regulatory pressure to reduce greenhouse gas emissions. This high carbon price creates a compelling financial incentive for industries to lower their emissions and invest in offset projects, accelerating the transition to a low-carbon economy.
The stringent regulatory environment in Europe also fuels vibrant activity in the voluntary carbon credit market. In the past year alone, European companies retired over 52 million carbon credits, demonstrating a strong corporate commitment to carbon neutrality and sustainability goals. Leading energy giants such as Shell and Eni have spearheaded this movement, establishing significant offtake agreements that drive demand for high-quality carbon credits.
Top Players in Carbon Credit Market
- 3Degrees
- Atmosfair
- Climate Impact Partners
- ClimeCo LLC
- EKI Energy Services Ltd.
- Finite Carbon
- Moss.earth
- NativeEnergy
- NATUREOFFICE
- Pachama, Inc.
- South Pole Group
- Tasman Environmental Markets
- Terrapass
- Verra Carbon
- Xpansiv
- Other Prominent Players
Market Segmentation Overview:
By Type
- Voluntary Markets
- Compliance Markets
By Source
- Technology Based
- Biomass
- Forest Based
- Sewage Treatment Plants
- Wastewater Treatment Plants
By Project Type
- Carbon Avoidance Projects
- Carbon Removal projects
-
- Nature Based
-
- Technology Based
By Selling Platform
- Direct Contact
- Climate Exchange Platforms
By Business Size
- Small and Micro Enterprises
- Medium and Large Businesses
By Industry
- Power Generation
-
- Biomass
-
- Geothermal
-
- Hydrogen
-
- Solar
-
- Others
- Waste Treatment Plant
-
- Sewage Treatment
-
- Commercial Waste Treatment
-
- Industrial Waste Treatment
-
- Municipal Solid Waste
-
- Others Waster Treatment
- Cement
- Oil & Gas
- Iron & Steel
- Chemical & Petrochemical
- Other Industries
By Region
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- South America
For more information about this report visit: https://www.astuteanalytica.com/industry-report/carbon-credit-market
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CONTACT: Contact Us: Astute Analytica Phone: +1-888 429 6757 (US Toll Free); +91-0120- 4483891 (Rest of the World) For Sales Enquiries: [email protected] Website: https://www.astuteanalytica.com/
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