The global Emissions Trading Market is estimated to be valued at US$ 334.80 billion in 2023 and is expected to exhibit a CAGR of 24% over the forecast period 2023-2030, as highlighted in a new report published by Coherent Market Insights.
Market Overview:
Emissions trading schemes involve the issuance of “allowances” or permits that authorize emission of a specific amount of pollution. Carbon trading aims to reduce greenhouse gas emissions cost-effectively across an economy. Power producers and energy intensive industrial operations are major sources of greenhouse gas emissions.
Market key trends:
One of the major trends in the Emissions Trading Market Share is increasing linking of regional carbon markets. This involves establishing mutual recognition of compliance instruments between trading systems to expand the carbon market. For example, linking between the EU ETS and Swiss ETS came into effect in 2020. Another major trend is transition towards carbon pricing. Many countries have implemented or scheduled carbon pricing programs through emissions trading schemes or carbon taxes. This is expected to significantly boost the emissions trading market size over the forecast period.
Market key trends:
One of the key trends in the emissions trading market is the growing adoption of carbon pricing mechanisms across various countries and regions globally. More than 20 countries and over 25 sub-national jurisdictions have implemented carbon pricing policies through emissions trading systems (ETS) or carbon taxes. China also launched its national ETS in 2021, which is expected to become the world’s largest carbon market. The growing linkage between different carbon markets is also emerging as a trend, which is expected to further increase the volume of traded carbon credits in this market.
SWOT Analysis:
Strength: Emissions trading helps reduce greenhouse gas emissions cost-effectively. It provides flexibility to organizations in deciding how to meet their emissions reduction targets.
Weakness: Price volatility in carbon credits can pose challenges to businesses in planning their abatement strategies. Lack of transparency and risk of fraud can undermine the credibility of some carbon offset projects.
Opportunity: Emerging of new regional carbon markets like EU, China, linkage between markets increase the trading volume. Development of new offset methodologies can support higher participation from sectors not covered under ETS.
Threats: Non-stringent implementation of compliance rules by regulators. Stringent climate policy changes can disrupt demand-supply dynamics.
Key Takeaways:
The global Emissions Trading Market is expected to witness high growth, exhibiting CAGR of 24% over the forecast period 2023-2030, due to stringent government policies and regulations pertaining to carbon emissions.
Regional analysis: Asia Pacific dominated the market in 2023, with China accounting for over 4 billion tons of annual CO2 emissions traded in 2021, the highest in the world. Europe is also a major carbon market led by the EU ETS.
Key players analysis: Key players operating in the emissions trading market are BP Plc, Royal Dutch Shell Plc, Total SE, Chevron Corporation, ExxonMobil Corporation, Engie SA, RWE AG, ON SE, Vattenfall AB, Gazprom, Mitsubishi UFJ Financial Group (MUFG), JPMorgan Chase & Co., Goldman Sachs Group, Inc., Citigroup Inc., Barclays PLC. Major oil and gas players are actively involved in trading carbon credits to meet compliance needs as well as for business opportunities.
*Note:
1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it
About Author – Money Singh
Money Singh is a seasoned content writer with over four years of experience in the market research sector. Her expertise spans various industries, including food and beverages, biotechnology, chemicals and materials, defense and aerospace, consumer goods, etc. LinkedIn Profile