Carbon Offsetting Market Size, Share, Opportunities, And Trends By Type (Voluntary Market, Compliance Market), By Project Type (Avoidance/Reduction Projects, Removal/Sequestration Projects, Others), By End-Users (Power, Energy, Aviation, Industrial, Transportation, Others), And By Geography - Forecasts From 2024 To 2029

The carbon offsetting market is expected to grow at a CAGR of 11.33%, reaching a market size of US$48.954 billion in 2029 from US$28.625 billion in 2024.

One of the main methods for neutralizing carbon emissions and lowering greenhouse gas (GHG) emissions in the atmosphere is carbon offset. The reduction and measurement of industrial and commercial gases in tons is achieved through the utilization of diverse carbon capture technologies, including carbon sequestration and investment in renewable energy. Using measurement units like the tCO2e or MTCO2e, the government determines the monetary value for each ton of carbon dioxide or carbon dioxide equivalent (CO2e). The end-use industries' voluntary participation in the carbon offsets program will increase as a result of this monetary value assigned to carbon neutralization.

Moreover, the end-use industries' enforced compliance and autonomous contribution to offset greenhouse gas emissions are linked to the market's growth. Governments issue carbon credits per ton of CO2e for the various end-use industries, which can be sold at the going rate. The market for carbon credits attracted investments from traders and end-user industries, increasing the demand for carbon offsets. Thus, the market was affected by all of these war-related activities.

Carbon Offsetting Market Drivers:

• Increased adoption by voluntary projects is anticipated to propel the market growth

The escalation of greenhouse gas emissions leading to global warming has presented a possible prospect for voluntary carbon neutralization initiatives. The small GHG emitters began participating in the carbon offset program to attain net zero carbon emissions. These tiny volunteers also receive carbon credits for each ton of carbon they neutralize. The company stands to gain greatly from the use of these credits as the medium of exchange for carbon trading on stock exchange platforms. Due to these financial benefits, there are now more ways than ever for new and old volunteers to increase their earnings in the carbon offset market.

• Strict government regulations are anticipated to drive the market growth

The carbon emissions from the main industries like cement, coal, crude oil, natural gas, and steel—have surpassed the allowable threshold for GHG in recent years. As a result, the ozone layers were diminished by an increase in CO2e and other harmful gases, which had a major negative impact on adult and neonatal health. The United States Environmental Protection Agency (EPA) affirms that more than 100,000 ozone molecules in the stratosphere can be destroyed by one chlorine atom. As a result, these atmospheric reactions weaken the ozone layer, indefinitely exposing people on Earth to UV radiation. These ultraviolet rays, also known as UV radiation, raise the risk of skin damage, skin cancer, early aging, and blindness in the short- and long term.

• Increased use of avoidance and reduction projects is increasing the market growth

Since the ozone layer is losing more of its thickness, there is a growing need for CO2 avoidance and reduction projects. In recent years, more CO2 avoidance projects have been launched in North America, Asia Pacific, and Europe to lower carbon gas emissions in the atmosphere. The market growth is fueled by an increase in these projects. Because these procedures are so affordable, their use in the industrial sector has grown. Consequently, the segment's expansion in the market is triggered by increasing carbon discharge.

• High demand from the renewable energy industry is boosting the market growth

The market share can be associated with the rise in carbon dioxide emissions, which adversely affects the environment and people’s health. Further, higher CO2e has caused chronic illnesses such as diseases of the respiratory system. Hence, concerns have emerged over the adverse effects and a need to purify the atmosphere. For example, in hydropower and wind energy projects with clean energy sources, geothermal energy has helped in cutting down the use of coal and other fossil fuels. Thus, the increase in the level of CO2 emissions has led to the development of the renewable energy sector, propelling the market.

Carbon Offsetting Market Restraints:

• Limited awareness of carbon offsetting is anticipated to impede market growth

Carbon offsetting is one of the most recent chains of carbon capture processes associated with the carbon trading system. This is mainly the case since developed countries usually finance these credits. It is presently, however, difficult to assess the amount of CO2e that may be emitted in the coming years, thus complicating the aspects of finances ceding to governments. Furthermore, there isn’t a universal acceptability of carbon offsetting standards. Notwithstanding these unfavourable circumstances, another important factor hindering the global market throughout the forecast period is the low awareness of carbon offsetting and the trade in carbon credits.

Carbon Offsetting Market Geographical Outlook

• Asia Pacific is witnessing exponential growth during the forecast period

Within the Asia-Pacific region, carbon dioxide emissions leading to global warming are present in most countries, China being one of them, and a few other top carbon emitters. Most importantly, China is responsible for a large emission of harmful gases to the environment every year, including carbon dioxide, carbon monoxide, and other toxic gas substances. These gases may destroy the ozone layer. Thus, more carbon capture projects have occurred over the past few years.  By offering carbon credits in return for the neutralized carbon dioxide in tons, the governments of the Asia-Pacific region are pushing end-use industries to meet the net zero carbon emission targets. All of these initiatives are anticipated to accelerate the regional market expansion.

Carbon Offsetting Market Key Launches

• In February 2024, an interdisciplinary team of Oxford University researchers updated the flagship guidelines on credible and net zero-aligned carbon offsetting, which hundreds of organizations have used since their publication in 2020. The updated "Oxford Offsetting Principles" call for a significant shift in offsetting practices and carbon markets, clarifying points in the original text based on the most recent scientific research and guiding how offsetting should be handled to contribute to creating a net zero society.
• In August 2023, The Global Carbon Council, headquartered in Doha, declared its intention to list its carbon credits on the MENA exchanges platform. This initiative raised the number of Middle Eastern carbon emission projects currently in operation and the number of investors in carbon offsets. A delegation from the program's operations team attended the event, representing the senior leadership of the GCC program. They gave technical presentations, attended seminars, and participated in panel discussions on climate change-related topics, including carbon offsetting and finance.

The Carbon offsetting market is segmented and analyzed as follows:

• By Type
  • Voluntary Market
  • Compliance Market
• By Project Type
  • Avoidance/Reduction Projects
  • Removal/Sequestration Projects
  • Others
• By End-Users
  • Power
  • Energy
  • Aviation
  • Industrial
  • Transportation
  • Others
• By Geography
  • North America
    • United States
    • Canada
    • Mexico
  • South America
    • Brazil
    • Argentina
    • Others
  • Europe
    • United Kingdom
    • Germany
    • France
    • Spain
    • Others
  • Middle East and Africa
    • Saudi Arabia
    • UAE
    • Israel
    • Other
  • Asia Pacific
    • China
    • Japan
    • India
    • South Korea
    • Indonesia
    • Thailand
    • Others

Key questions answered in this report:

• What is the current market size of the carbon offsetting sector?
• What are the key trends driving the carbon offsetting market growth?
• What are the main challenges faced by the carbon offsetting industry?
• Who are the major players in the carbon offsetting market?
• Which regions are leading the carbon offsetting market? 
• What are the revenue forecasts for carbon offsetting market over the next five years?
• What are the most significant technological advancements in the carbon offsetting industry?
• What are the regulatory and policy frameworks impacting the carbon offsetting market?
• What are the environmental impacts of carbon offsetting production/ industry?
• How does the government support the carbon offsetting market?

1. INTRODUCTION

1.1. Market Overview

1.2. Market Definition

1.3. Scope of the Study

1.4. Market Segmentation

1.5. Currency

1.6. Assumptions

1.7. Base and Forecast Years Timeline

1.8. Key Benefits to the Stakeholder

2. RESEARCH METHODOLOGY  

2.1. Research Design

2.2. Research Processes

3. EXECUTIVE SUMMARY

3.1. Key Findings

3.2. CXO Perspective

4. MARKET DYNAMICS

4.1. Market Drivers

4.2. Market Restraints

4.3. Porter’s Five Forces Analysis

4.3.1. Bargaining Power of Suppliers

4.3.2. Bargaining Power of Buyers

4.3.3. Threat of New Entrants

4.3.4. Threat of Substitutes

4.3.5. Competitive Rivalry in the Industry

4.4. Industry Value Chain Analysis

4.5. Analyst View

5. CARBON OFFSETTING MARKET BY TYPE

5.1. Introduction

5.2. Voluntary Market

5.3. Compliance Market

6. CARBON OFFSETTING MARKET BY PROJECT TYPE

6.1. Introduction

6.2. Avoidance/Reduction Projects

6.3. Removal/Sequestration Projects

6.4. Others

7. CARBON OFFSETTING MARKET BY END-USER

7.1. Introduction

7.2. Power

7.3. Energy

7.4. Aviation 

7.5. Industrial

7.6. Transportation

7.7. Others

8. CARBON OFFSETTING MARKET BY GEOGRAPHY

8.1. Introduction

8.2. North America

8.2.1. By Type

8.2.2. By Project Type

8.2.3. By End-User

8.2.4. By Country

8.2.4.1. United States

8.2.4.2. Canada

8.2.4.3. Mexico

8.3. South America

8.3.1. By Type

8.3.2. By Project Type

8.3.3. By End-User

8.3.4. By Country

8.3.4.1. Brazil

8.3.4.2. Argentina

8.3.4.3. Others

8.4. Europe

8.4.1. By Type

8.4.2. By Project Type

8.4.3. By End-User

8.4.4. By Country

8.4.4.1. United Kingdom

8.4.4.2. Germany

8.4.4.3. France

8.4.4.4. Spain   

8.4.4.5. Others

8.5. Middle East and Africa

8.5.1. By Type

8.5.2. By Project Type

8.5.3. By End-User

8.5.4. By Country

8.5.4.1. Saudi Arabia

8.5.4.2. UAE

8.5.4.3. Israel

8.5.4.4. Others

8.6. Asia Pacific

8.6.1. By Type

8.6.2. By Project Type

8.6.3. By End-User

8.6.4. By Country

8.6.4.1. China

8.6.4.2. Japan

8.6.4.3. India

8.6.4.4. South Korea

8.6.4.5. Indonesia

8.6.4.6. Thailand

8.6.4.7. Others

9. COMPETITIVE ENVIRONMENT AND ANALYSIS

9.1. Major Players and Strategy Analysis

9.2. Market Share Analysis

9.3. Mergers, Acquisitions, Agreements, and Collaborations

9.4. Competitive Dashboard

10. COMPANY PROFILES

10.1. South Pole 

10.2. 3Degrees

10.3. EKI Energy Services Ltd.

10.4. Native

10.5. CarbonBetter

10.6. Terrapass

10.7. Climetrek

10.8. Tasman Environmental

10.9. ClimeCo LLC

10.10. NATUREOFFICE

South Pole 

3Degrees

EKI Energy Services Ltd.

Native

CarbonBetter

Terrapass

Climetrek

Tasman Environmental

ClimeCo LLC

NATUREOFFICE