Carbon credits, also known as certified emission reductions (CERs), represent one metric ton of carbon dioxide or equivalent greenhouse gas (GHG) reduced, avoided or absorbed through approved carbon offset projects. Some of the key advantages of carbon credits include providing a financial incentive to adopt cleaner technologies, practices and fuel sources that reduce greenhouse emissions. With Canada seeking to cut emissions by over 30% from 2005 levels by 2030, there is growing demand for efficient options to achieve climate targets. The Government of Canada has also implemented legislations such as the Canada Greenhouse Gas Pollution Pricing Act (GGPPA) which places an emissions levy on industrial facilities and fuels if they exceed certain limits.
The Global Canada Carbon Credit Market is estimated to be valued at US$ 1,797.7 Mn in 2024 and is expected to exhibit a CAGR of 11. % over the forecast period 2024-2031.
Key Takeaways
Key players operating in the Canada Carbon Credit market are WGL Holdings, Inc., Enking International, Green Mountain Energy, Native Energy, Cool Effect, Inc., Sustainable Travel International, 3 Degrees, Terrapass, and Sterling Planet, Inc. The growing focus on carbon neutrality and net zero goals across industries is expected to drive the demand for carbon offsets. Technological advancements such as blockchain for carbon credit trading and accurate GHG accounting solutions will also support market growth.
Key opportunities in the market include offering offset programs customized for SMEs and individual consumers. Multiple Canadian provinces have also established carbon pricing frameworks in recent times, opening up new projects for offset generation. Further, international collaborations for offset trading between nations will boost market revenues.
Technological advancements such as distributed ledger technologies and blockchain enable more transparent and reliable carbon credit issuance and trading. Advanced GHG monitoring and reporting tools further aid companies in aligning with climate targets and legislative reporting requirements.
Market Drivers
The Canada Carbon Credit market is driven by the implementation of legislations such as the GGPPA which places a price on carbon. This makes carbon offsets a cost-effective means to achieve compliance. Growing corporate focus on ESG & sustainability goals along with net zero commitments from industries like oil & gas, also contribute to offset demand. Additionally, initiatives like the Pan-Canadian Framework on Clean Growth and Climate Change provide incentives and economic opportunities in the carbon market.
Current Challenges In Canada Carbon Credit Market
The Canada carbon credit market is facing major challenges due to the rising carbon emissions from industrial sectors like power and energy, manufacturing etc. Tightening carbon emission regulations and policies by the government is adding compliance burden on businesses. Measuring and reporting carbon footprint accurately as per regulatory protocols is another task for companies. High capital investment is required for transitioning to low carbon operations and adoption of green technologies. Changing consumer preferences also mandate firms to revamp their product portfolio and supply chains to lower carbon footprint.
SWOT Analysis
Strength: Established regulatory framework and protocols for carbon credit trading. Growing awareness about climate change is driving adoption of emission reduction programs.
Weakness: Lack of standardization in carbon offset qualifications and verifications. High initial costs for low carbon transitioning.
Opportunity: Potential to develop offset projects across renewable energy, forestry and waste management sectors. Scope for linking with other carbon markets through international collaborations.
Threats: Economic slowdowns can impact demand for credits. Dependence on policy support and incentives from the government.
Geographical Regions
North America region accounts for over 60% of the Canada carbon credit market value currently led by high participation from provinces like Ontario and Quebec. Asia Pacific is emerging as the fastest growing regional market due to increasing carbon regulations and implementation of carbon pricing mechanisms in countries like China, Japan and South Korea.
Fastest Growing Geographical Region
Asia Pacific region is anticipated to register fastest CAGR of over 15% during the forecast period in the Canada carbon credit market led by high carbon reduction goals and supportive government policies in large economies like China and India. Rapid industrialization and growth of manufacturing sectors in Asia Pacific also raises demand for carbon offsets to comply with stringent emission standards.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
What Are The Key Data Covered In This Canada Carbon Credit Market Report?
:- Market CAGR throughout the predicted period
:- Comprehensive information on the aspects that will drive the Canada Carbon Credit ‘s growth between 2024 and 2031.
:- Accurate calculation of the size of the Canada Carbon Credit and its contribution to the market, with emphasis on the parent market
:- Realistic forecasts of future trends and changes in consumer behaviour
:- Canada Carbon Credit Industry Growth in North America, APAC, Europe, South America, the Middle East, and Africa
:- A complete examination of the market’s competitive landscape, as well as extensive information on vendors
:- Detailed examination of the factors that will impede the expansion of Canada Carbon Credit vendors
FAQ’s
Q.1 What are the main factors influencing the Canada Carbon Credit ?
Q.2 Which companies are the major sources in this industry?
Q.3 What are the market’s opportunities, risks, and general structure?
Q.4 Which of the top Canada Carbon Credit companies compare in terms of sales, revenue, and prices?
Q.5 Which businesses serve as the Canada Carbon Credit ’s distributors, traders, and dealers?
Q.6 How are market types and applications and deals, revenue, and value explored?
Q.7 What does a business area’s assessment of agreements, income, and value implicate?
About Author – Ravina Pandya
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