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3. Carbon Offset/Carbon Credit Market Size & Share - Future Growth Expectations

The global carbon offset/carbon credit market size is projected to reach USD 1,602.7 billion by 2028 from an estimated USD 414.8 billion in 2023, at a CAGR of 31.0% during the forecast period. The major factors driving the growth of this market include the rising awareness for reducing carbon emissions and the urge of companies to reach their net zero targets.

The carbon offset/carbon credit market has been experiencing significant growth, fueled by several factors.

• Efforts to reduce climate change
• Regulatory Frameworks and Policy Support
• Corporate Sustainability Initiatives
• Voluntary Carbon Markets
• International Collaboration and Agreements
• Technological Innovation and Market Efficiency

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Efforts to reduce climate change:

• As people become more conscious of the phenomenon and its possible effects, there is an increasing focus on cutting greenhouse gas (GHG) emissions. In order to make up for inevitable emissions, there is a growing demand for carbon offset projects and carbon credits from governments, corporations, and people looking for methods to reduce their carbon footprint.

Regulatory Frameworks and Policy Support:

• Markets for carbon offset/carbon credit are flourishing because of the adoption of regulatory frameworks like emissions trading systems (ETS), cap-and-trade programs, and carbon pricing mechanisms. Globally, governments are implementing laws and establishing goals to reduce emissions, encouraging involvement in carbon offset programs.

Corporate Sustainability Initiatives:

• Driven by elements like stakeholder expectations, risk management, and reputational benefits, a growing number of businesses are incorporating environmental sustainability into their company plans and operations. Businesses can use carbon offsetting as a way to offset their emissions, show leadership in environmental issues, and support sustainable development objectives.

Voluntary Carbon Markets:

• With businesses and individuals choosing to voluntarily offset their emissions, the voluntary carbon market has experienced tremendous expansion. The demand for a variety of offset solutions, such as renewable energy projects, afforestation/reforestation, energy efficiency programs, and methane capture projects, is being driven by businesses', consumers', and institutions' growing willingness to engage in carbon offset/carbon credit projects.

International Collaboration and Agreements:

• Global cooperation on climate action has been sparked by international accords like the Paris Agreement, which encourage nations to commit to emission reduction targets and take part in carbon offsetting efforts. Cooperation among governments, organizations, and parties involved in the carbon market has made it easier to create standardized procedures, open accounting practices, and trustworthy certification processes, all of which have promoted market expansion.

Technological Innovation and Market Efficiency:

• The accuracy and transparency of carbon offset/carbon credit projects have increased because to developments in carbon measurement, monitoring, and verification technologies. This has decreased transaction costs and improved market efficiency. In particular, blockchain technology is being investigated to improve the traceability and integrity of carbon credits, which would further propel market expansion and buyer and seller confidence.

The carbon offset/carbon credit market is expected to expand more as attempts to mitigate climate change increase, legal frameworks change, and sustainability becomes a crucial consideration in company decisions. In the upcoming years, major factors that will propel market expansion include cross-sector collaboration, innovation in project planning and verification, and more transparency and accountability.

Carbon Offset/Carbon Credit Market Share - Global Industry Landscape

The carbon offset/carbon credit market is characterized by the presence of several key players competing for market share. Some of the leading companies in the carbon offset/carbon credit industry include:

• 3Degrees (US)
• South Pole Group (Switzerland)
• EKI Energy Services Ltd. (India)
• Finite Carbon (US)
• NativeEnergy (US)

These companies, along with other regional and niche players, compete in the global pad-mounted switchgear market by offering a variety of products, technologies, and solutions to meet the diverse needs of customers in different industries. Market share within the pad-mounted switchgear industry may evolve as companies innovate, expand their product portfolios, and explore new market opportunities.

3Degrees (US)

• 3Degrees (US) held the majority of the global carbon offset/carbon credit market share in 2022. The company has expanded partnerships to enhance grid reliability and began coordinating with the US federal government to make electric transportation safer and more efficient. For instance, in 2022, the company also acquired a 50% stake in the circuit breaker business of Jiangsu Huineng Electric Co., Ltd., a manufacturer of low-voltage circuit breakers in China. Eaton reported this investment in the Electrical Global business segment.

South Pole Group (Switzerland)

• South Pole Group operates as a carbon finance consultancy. It covers project and technology finance, data analysis, and advisory on sustainability risks and opportunities, as well as the development of carbon and renewable energy credits. The company helps public and private sector organizations develop climate-proven policies and strategies. The company’s areas of expertise cover every key sustainability-related area of climate change, including but not limited to forests & land use, water quality and conservation, sustainable cities & buildings, as well as renewable energy and energy efficiency. South Pole has worked with over 1,000 clients and is expected to soon develop 800 offset projects across 30 offices globally. South Pole Group operates in North America, Europe, Asia Pacific, and South Africa.

EKI Energy Services Ltd. (India)

• EKI Energy Services Ltd. (EKI) is a leading carbon credit developer & supplier across the world. It is 14+ years old and is a global market leader with deep expertise in the realm of climate change, carbon offset solutions, and carbon asset management. The company is currently present in 16+ countries and has 3000+ clients across 40+ countries worldwide. As of date, EKI has supplied over 180+ million offsets. The company has been passionately working toward rehabilitating the planet to a future of net-zero carbon emissions. It offers sustainable solutions for climate change and carbon offsets with global standards such as CDM, VCS, Gold Standard, GCC, IREC, TIGR, and others. The company also specializes in driving community-based projects such as green cooking for efficient cook stoves in rural homes and other nature-inspired solutions.

Related Reports:

Carbon Offset/Carbon Credit Market by Type (Voluntary Market, Compliance Market), Project Type (Avoidance/Reduction Projects, Removal/Sequestration Projects (Nature-based, Technology-based)), End-User and Region - Global Forecast to 2028