Global Carbon Credit Market: Type, Sources, Project Type, Industry, Waste Treatment Plant, Region - Market Size, Industry Dynamics, Opportunity Analysis And Forecast For 2025-2035

The carbon credit market is one marked by explosive growth and increasing complexity, reflecting its rising importance in the global effort to combat climate change. Valued at an impressive US$1,142.40 billion in 2024, the market is on track for extraordinary expansion, with projections estimating it will reach nearly US$4,983.7 billion by 2035. This growth corresponds to a compound annual growth rate (CAGR) of 18% over the forecast period from 2025 to 2035, underscoring the accelerating momentum behind carbon trading as a critical tool for emissions reduction.

This projected surge is not merely a result of market speculation but is deeply rooted in tangible demand dynamics, particularly from the corporate sector. In 2023 alone, companies retired an estimated 161 million carbon credits, demonstrating a strong and growing commitment to offsetting their emissions. This widespread corporate engagement is further bolstered by the increasing adoption of Science-Based Targets (SBTs), with more than 5,200 firms globally aligning their climate strategies with scientifically grounded goals.

Noteworthy Market Developments

Emerging economies and companies are increasingly demonstrating a strong interest in participating in carbon credit trading, signaling a broadening and deepening of the market on a global scale. A notable example is DBS China's recent signing of a memorandum of understanding with China-Singapore Suzhou Industrial Park Green Development Company (CSSGD), a subsidiary of China-Singapore Suzhou Industrial Park Development Group (CSSD), along with Climate Impact X (CIX). This partnership aims to advance carbon credit trading within China and extend its reach beyond national borders.

Meanwhile, corporate players are entering the carbon credit market with new services designed to facilitate access to high-quality credits. In March 2025, Amazon launched its carbon credit service aimed at qualified companies. This service provides streamlined access to verified and credible carbon credits, enabling businesses to offset their emissions more effectively and transparently. Amazon's entry into this space reflects the growing corporate demand for credible climate solutions. This illustrates how private sector innovation is complementing government and multilateral efforts to scale carbon markets globally.

Core Growth Drivers

Increasingly stringent government regulations and ambitious national climate targets are key drivers behind the rapid growth of the carbon credit market. Around the world, governments are recognizing the critical role that carbon credits play in achieving their climate goals and are consequently implementing more rigorous policies and regulatory frameworks to support their use. These enhanced regulations are designed to ensure that carbon credits are credible, verifiable, and effective in reducing greenhouse gas emissions.

Emerging Opportunity Trends

The development of digital Measurement, Reporting, and Verification (MRV) systems represents a major transformative trend driving growth and innovation within the carbon market. These digital MRV solutions are vital advancements that significantly enhance the operations and overall effectiveness of carbon trading by improving transparency and ensuring the integrity of carbon credits. As the carbon market expands and becomes increasingly complex, the need for reliable, real-time, and accurate monitoring of emissions and carbon removal activities has become more critical than ever. Digital MRV systems address this need by leveraging cutting-edge technologies to automate and streamline the processes involved in tracking carbon reductions.

Barriers to Optimization

Concerns over greenwashing and the integrity of offset project claims present significant challenges that could hamper the growth of the carbon credit market. As the demand for carbon offsets increases, so too does scrutiny over the authenticity and effectiveness of various projects claiming to reduce or remove greenhouse gas emissions. Greenwashing-the practice of presenting misleading or exaggerated environmental benefits-undermines trust in the market and raises doubts about whether carbon credits truly represent genuine climate action. This skepticism can deter potential buyers, investors, and regulators, slowing market expansion and reducing overall confidence.

Detailed Market Segmentation

By Type, the compliance segment's overwhelming 99.6% share of the carbon credit market highlights its absolute dominance and fundamental influence over the entire landscape. This dominance is not a coincidence but rather a structural reality shaped by legally binding government mandates and international agreements designed to curb greenhouse gas emissions. Central to this framework are cap-and-trade systems, which establish limits on emissions and create a regulated marketplace for trading carbon credits. Among these, the European Union's Emissions Trading System (EU ETS) stands out as the world's largest and most influential.

By Source, technology-based carbon credits have firmly established their dominance in the market, capturing a substantial 46.9% share. This growing prominence reflects an increasing demand for carbon removal solutions that are not only effective but also permanent and highly verifiable. Unlike many nature-based solutions, which can be vulnerable to risks such as forest fires, disease, or land-use changes that may reverse the carbon sequestration achieved, technology-driven methods provide a more durable and reliable approach to removing CO2 from the atmosphere.

By Project Type, carbon removal projects dominate the market with an impressive 75.3% share, reflecting a significant shift in global climate strategy. The focus within the environmental community and among policymakers has moved beyond merely preventing future emissions to actively removing existing carbon dioxide from the atmosphere. This transition acknowledges the urgent need to address legacy carbon-greenhouse gases that have already accumulated and continue to drive climate change.

By Selling Platform, climate exchange platforms have emerged as the dominant force in the carbon credit transaction infrastructure, commanding an impressive 64.9% share of the market. Their rise to prominence is largely due to their ability to deliver the transparency, liquidity, and efficiency that the evolving carbon market demands. By operating as centralized digital marketplaces, these platforms effectively bring together buyers and sellers within a highly regulated environment. This setup fosters robust price discovery, allowing market participants to gauge the true value of carbon credits through open and dynamic trading processes.

By Industry, the power generation industry holds the position of the largest consumer in the carbon credit market, commanding a significant 22.1% share. This prominent role directly stems from its status as one of the primary sources of global greenhouse gas emissions. Fossil fuel power plants, which generate much of the world's electricity, release vast amounts of carbon dioxide and other pollutants into the atmosphere, making them central targets for emissions reduction efforts worldwide.

Segment Breakdown

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
• Other Waste Treatment
• Cement
• Oil & Gas
• Iron & Steel
• Chemical & Petrochemical
• Other Industries

By Region

• North America
• The U.S.
• Canada
• Mexico
• Europe
• Western Europe
• The UK
• Germany
• France
• Italy
• Spain
• Rest of Western Europe
• Eastern Europe
• Poland
• Russia
• Rest of Eastern Europe
• Asia Pacific
• China
• India
• Japan
• Australia & New Zealand
• South Korea
• ASEAN
• Rest of Asia Pacific
• Middle East & Africa (MEA)
• Saudi Arabia
• South Africa
• UAE
• Rest of MEA
• South America
• Argentina
• Brazil
• Rest of South America

Geography Breakdown

• Europe holds a commanding position in the global carbon credit market, controlling over 51.10% of the market share. This dominance is largely attributed to its well-established compliance framework, which has provided a stable and transparent environment for carbon trading. Additionally, Europe's pioneering investments in high-permanence carbon removal technologies have set it apart as a leader in the effort to achieve long-term carbon sequestration. These factors combine to create a mature and robust carbon market that attracts significant participation from both regulatory and voluntary sectors.
• In 2024, the European Union Emissions Trading System (ETS) saw allowances consistently trading above €70 per tonne of CO2. This high price level sends a strong signal to industries and corporations, creating a powerful financial incentive to reduce emissions and invest in cleaner technologies. The regulatory pressure imposed by the ETS has a ripple effect, encouraging companies to take proactive steps in the voluntary carbon market as well. Over the past year, European companies retired more than 52 million carbon credits, demonstrating substantial corporate commitment to offsetting their carbon footprints.

Leading Market Participants

• 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