PUBLISHER: Roots Analysis | PRODUCT CODE: 1869573
PUBLISHER: Roots Analysis | PRODUCT CODE: 1869573
As per Roots Analysis, the global voluntary carbon credit market is expected to grow from USD 1.6 billion in the current year to USD 47.5 billion, at a CAGR of 40% during the forecast period.
The market sizing and opportunity analysis has been segmented across the following parameters:
Project
Type of Transaction
Application Area
End User
Geography
Carbon credits signify a decrease or elimination of greenhouse gases in the atmosphere achieved through several climate initiatives. These credits are acquired either to meet compliance obligations or are purchased on a voluntary basis. The carbon reduction initiatives benefit the market by stakeholders either willingly eliminate or prevent emissions to lessen their environmental impact. This market has become an essential tool for tackling worldwide issues related to climate change. In contrast to compliance markets that are influenced by government regulations and cap-and-trade systems, the voluntary carbon credit sector functions on a non-mandatory principle, enabling companies, individuals, and organizations to voluntarily compensate for their carbon emissions. In 2021, the market reached a peak with more than USD 2 billion in revenue from trading voluntary carbon credits. This expansion is driven by continuous initiatives to decrease carbon emissions and transition towards sustainability in both public and private sectors. To offer different kinds of carbon credits, the project developers engage in a diverse range of efforts, such as afforestation, blue carbon, clean cooking, clean water, forest preservation, reforestation, land safeguarding, and renewable energy projects.

Additionally, by engaging in voluntary carbon offset initiatives, the end users in this market aid in lowering greenhouse gas emissions and provide financial backing for projects that enhance biodiversity, environmental resilience, and sustainable development. Voluntary carbon credits serve as both an environmental catalyst and an economic driver, fostering innovation and generating new business prospects. With the growing integration of environmental, social, and governance objectives into business strategies, it is expected that the need for carbon credits will rise.
As both businesses and government agencies / organizations pursue ambitious climate goals, the voluntary carbon credit market will play an essential role in enabling a global transition to a low-carbon economy. Moreover, the increasing corporate commitment to net zero emissions targets is anticipated to drive significant growth in the market, in the coming decade.
The report delves into the current state of voluntary carbon credit market and identifies potential growth opportunities within industry. Some key findings from the report include:


Renewable Energy Projects Occupies a Relatively Higher Voluntary Carbon Credit Market Share
The global voluntary carbon credit market is categorized into different projects, such as renewable energy projects, energy efficiency projects, forestry and land use projects, methane capture and destruction projects and other projects. Currently, the renewable energy projects occupy a relatively higher market share (more than 30%); however, this scenario is likely to change in the upcoming future and the forestry and land use projects segment and is expected to witness substantial growth during the forecast period.
This is because forest management enhances the absorption of emissions by regulating deforestation and forest degradation. Moreover, forestry and land management initiatives help reduce the effects of climate change and the decline of biodiversity.
Carbon Removal Segment Is Expected to Grow at a Higher CAGR
The global market is segmented across various types of transactions, such as carbon removal, carbon reduction and mixed transactions. Presently, the mixed transactions segment occupies the highest voluntary carbon credit market share (more than 45%), and this trend is unlikely to change over the next decade. However, the carbon removal segment is expected to grow at a relatively higher pace due to several reasons, including heightened awareness concerning greenwashing and changes in regulatory guidelines.
Industrial Sector Currently Occupies the Highest Voluntary Carbon Credit Market Share
This segment highlights the segmentation of global market across various application areas, such as industrial sector, household sector, energy sector, agriculture sector and other application areas. Among these application areas, the industrial sector segment currently occupies the highest voluntary carbon credit market share and is likely to stay dominant during the forecast period. This can be linked to the growing adoption of net zero emission initiatives by industry participants, fostering a flourishing market. Further, it is worth mentioning that the energy sector segment is expected to grow at a higher CAGR compared to other segments.
Private Companies' Segment Is Expected to Hold the Majority Market Share
In terms of end-users, the global voluntary carbon credit market is segmented across different types of end users, such as government agencies / organizations, non-profit organizations, private companies and individuals. Currently, private companies' segment is expected to hold the majority (nearly 45%) of the market share, and this trend is unlikely to change in the future as well. Further, private companies' segment is anticipated to grow at an annualized rate of ~40%, till 2035. This is a result of the growing use of voluntary carbon credit by private companies to counterbalance their carbon emissions, focusing on minimizing environmental impact and achieving their sustainability objectives.
North America is Likely to Capture the Major Market Share
In terms of geography, the global market is segmented across North America, Europe, Asia-Pacific, Latin America, and Middle East and Africa. Currently North America is likely to capture the majority (over 30%) of the market share; however, in the upcoming decade the market for Europe is likely to capture majority of the market share. It is worth highlighting that during the forecast period till 2035, the voluntary carbon credit market share in Asia-Pacific is expected to grow at a relatively faster pace (CAGR of 42%) in comparison to other regions.
The opinions and insights presented in this study were influenced by discussions conducted with multiple stakeholders in this domain. The market report features detailed transcripts of interviews held with the following individuals:
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