The global carbon offset market addresses the increasing demand for carbon neutral products and services. Carbon offsets allow individuals and organizations to mitigate their climate impact by financing projects that reduce carbon emissions, such as renewable energy, energy efficiency, reforestation, and methane capture. The carbon offset market provides carbon credits that represent the reduction or elimination of one metric ton of carbon dioxide emissions. These credits can be purchased voluntarily to offset activities like business travel, electricity use, or product shipping.
The global carbon offset market is estimated to be valued at US$ 477.85 Mn in 2023 and is expected to exhibit a CAGR of 8.6% over the forecast period 2024 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market key trends
The increasing demand for carbon neutral products and services is a major driver for the carbon offset market. Many companies and consumers are becoming more environmentally conscious and looking to reduce their carbon footprint. Carbon offsets provide a way for individuals and organizations to mitigate the climate impact of unavoidable emissions. There is growing demand from various sectors like aviation, oil & gas, mining etc. to purchase offsets to brand themselves as ‘carbon neutral’. Many governments and organizations have also set carbon reduction targets which is further fueling the adoption of carbon offsets. Initiatives like the Paris Agreement aim to encourage the shift towards low carbon economy through market-based mechanisms like emissions trading and use of carbon credits.
Strength: Carbon offset market offers opportunities for companies to improve their corporate image and brand reputation by taking actions to reduce their carbon footprint. It also allows organizations to achieve sustainability targets in a cost-effective manner.
Weakness: Determining accurate measurement and additionality of carbon offsets is challenging. There are concerns around the consistency, transparency, and additionality of some offset projects.
Opportunity: Stringent government regulations and policies related to carbon emissions are expected to drive increased demand for carbon offsets. Many companies have set ambitious net-zero emission targets which will boost market growth.
Threats: Introduction of carbon taxes or cap-and-trade programs may reduce the need for voluntary carbon offsetting. Dependence on natural or biological carbon sequestration projects increases market vulnerability to weather changes and other disruption events.
The global Carbon Offset Market Demand is expected to witness high growth over the forecast period supported by stringent carbon reduction policies and growing emphasis on sustainability among corporates.
The Asia Pacific region currently dominates the market and is expected to continue its dominance over the forecast period due to rapid industrialization and large volume of GHG emissions from countries like China and India.
Key players operating in the carbon offset market are AptarGroup, Weener Plastics Group, Bormioli Rocco Pharma, Pacific Packaging Components, PCC Exol, SHL Group, O.Berk Company, Winfield Laboratories, O.Berk, Comar, RPC Group, Alpha Packaging, Pretium Packaging, Silgan Holdings, Origin Pharma Packaging, Vidchem pty ltd, Mold-Rite Plastics, Berry Global, Amcor, Gerresheimer. Major players are focusing on project development to increase the availability of high-quality carbon credits. Partnerships and acquisitions are also among popular business strategies adopted by leading companies to expand their market share.
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it