Carbon verification refers to the confirmation of consistency between reported greenhouse gas emissions and actual greenhouse gas emissions through independent verification or assurance engagements. Carbon verification plays a crucial role in mitigating climate change by verifying and assuring corporate climate action initiatives such as net zero targets are credible and accurate. Carbon verification services involve designing and implementing verification programs, developing methodologies for measuring, monitoring, and quantifying emissions reductions, reviewing GHG assertions, performing materiality assessments and field verifications. The services help organizations to enhance credibility in their climate commitments and ensure compliance with regulations.
The global carbon verification market is estimated to be valued at US$ 12.73 Bn in 2024 and is expected to exhibit a CAGR of 10% over the forecast period 2023 to 2030, as highlighted in a new report published by Coherent Market Insights.
Market Dynamics:
The carbon verification market is expected to be flourished by growing adoption of net zero carbon initiatives across industries. According to a report by Science Based Targets initiative (SBTi), over 2,000 companies have committed to set science-based emissions reduction targets in line with limiting global warming to 1.5°C. As net zero commitments involve accurate emissions accounting and third party assurance, demand for carbon verification services is growing significantly. Further, stringent regulations around climate disclosures and transparency of actions are also driving the need for credible carbon verification. For instance, European Union’s Corporate Sustainability Reporting Directive (CSRD) will require ~50,000 large companies and groups to disclose ESG information including scope 1, 2 and 3 emissions from 2024 which is anticipated to boost market growth during the forecast period.
Segment Analysis
The carbon verification market is segmented into type, standards and end use. By type, third party verification segment dominates the market with more than 55% share owing to independent nature of third party verification providing credibility to carbon credits. With respect to standards, Verra and Gold Standard are leading segments accounting for over 60% share jointly as they are robust standards followed globally for voluntary carbon markets. By end use, voluntary segment leads with around 65% share because of growing preference among organizations to adopt carbon neutrality voluntarily to enhance ESG profile.
PEST Analysis
Political: Stringent regulations around the world to curb carbon emissions is driving demand for carbon credits and verification. The EU led initiatives to price carbon is a major factor.
Economic: Growth in voluntary carbon markets and compliance with carbon pricing mechanisms is fueling market growth. Projected market size of $12.73 bn by 2024 indicates a lucrative opportunity.
Social: Increasing consumer and investor preference for low carbon products and companies with strong ESG performance is raising adoption of carbon neutrality programs requiring verification.
Technological: Advancements in technologies like satellite monitoring and blockchain are enhancing transparency and effectiveness of verification process supporting market expansion.
Key Takeaways
The Global Carbon Verification Market Size is expected to witness high growth at a CAGR of around 10% during the forecast period of 2023 to 2030. The global carbon verification market is estimated to be valued at US$ 12.73 Bn in 2024 and is expected to exhibit a CAGR of 10% over the forecast period 2023 to 2030.
Regional analysis shows North America leading with over 30% market share due to presence of major voluntary carbon markets and stringent policies. Europe is another major region supported by EU led initiatives for carbon pricing. The Asia Pacific region is witnessing fastest growth on back of initiatives in major countries like China and India to expand carbon trading along with voluntary actions among companies to achieve carbon neutrality goals.
Key players analysis: Key players operating in the carbon verification market are Bureau Veritas, DNV GL, Intertek, TÜV Rheinland and Verifavia. Bureau Veritas dominated with around 15% market share in 2022 supported by global network and expertise across various carbon standards.
