Increasing technological advances and creative solutions in different sectors such as energy efficiency, renewable energy, and carbon capture and storage are expected to fuel the market demand during the forecast period.
Wilmington, Delaware, United States, July 28, 2023 (GLOBE NEWSWIRE) — Transparency Market Research Inc. – The global carbon trading market is projected to flourish at a CAGR of 19.0% from 2023 to 2031. As per the report published by TMR, a valuation of US$ 4.8 trillion is anticipated for the market in 2031. In 2022, the market for carbon trading was valued at US$ 1.0 trillion
The implementation of environmental regulations and policies that impose limits on greenhouse gas emissions is a significant driver for the carbon trading market. Governments and regulatory bodies set emission reduction targets, establish caps on emissions and enforce compliance through trading schemes. These policies create a demand for emission allowances and provide a regulatory framework for carbon trading.
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Competitive Landscape
Transparency Market Research has profiled the following players in its global carbon trading market report:
3Degrees, Anew Climate, LLC, BP P.L.C., C-Quest Capital LLC, EKI Energy Services Ltd. (EKI), Finite Carbon Corporation, Forest Carbon, GECA Environnement, Native Energy, Shell, South Pole, and Terrapass.
The market players in the carbon trading market are performing mergers, acquisitions, and collaborations to expand the business lines. Some of the developments in the carbon trading market are as follows-
- In March 2023, Sweep, the leading carbon management and reduction platform announced a partnership with 3Degrees, a leader in global climate solutions. The two certified B Corporations will team up to provide a seamless experience for organizations looking to measure and take action on their operational and value chain emissions.
- Shell and BP are major oil and gas companies that have been actively involved in the carbon trading market. They have invested in renewable energy projects, carbon capture, and storage initiatives, and have participated in carbon offset projects. These companies are aligning their strategies with the transition to a low-carbon economy and exploring opportunities in the evolving carbon trading landscape.
The introduction of a price on carbon emissions, either through carbon taxes or cap-and-trade systems, drives the carbon trading market. A carbon price creates a financial incentive for companies to reduce their emissions and invest in low-carbon technologies. It encourages market participants to trade emission allowances to optimize costs and compliance.
The growing interest of investors in environmental sustainability and Environmental, Social, and Governance (ESG) criteria have influenced the carbon trading market. Investors increasingly consider a company’s carbon footprint and emission reduction strategies when making investment decisions. This demand for ESG-aligned investments encourages companies to participate in carbon trading and demonstrate their commitment to sustainable practices, this is expected to boost the carbon trading market demand.
Key Takeaways from the Market Report
- As of 2023, the carbon trading market is forecast to reach US$ 1.19 trillion
- Based on source, demand for chemicals is rising significantly
- Cap & Trade segment to remain popular during the forecast period
- Based on platform type, the compliance segment is expected to account for a significant market share during the forecast period.
- By End-use, the energy segment is expected to generate high revenue during the forecast period.
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Carbon Trading Market: Prominent Drivers and Trends
- The extensive application of carbon trading in the energy sector is creating opportunities for market growth. Implementation of regulatory framework and policies in the energy sector to reduce the carbon emission
- Voluntary carbon offsetting by individuals, organizations, and companies seeking to neutralize their emissions has contributed to the growth of the carbon trading market.
- Government has also implemented emission reduction targets and set clear goals and provide a roadmap to align their strategies and participated in emission reduction activities.
Carbon Trading Market: Regional Analysis
- North America has witnessed various carbon trading initiatives such as WCI is a collaboration among several jurisdictions in North America. It includes California, Quebec (Canada), and several U.S. states. The WCI aims to establish a regional carbon market and reduce greenhouse gas emissions. It has been working towards the development of a joint cap-and-trade program that would allow for cross-border trading of emission allowances.
- Asia Pacific accounts for a significant share of the carbon trading market as different countries and jurisdictions implement carbon pricing mechanisms. China has launched the China Emission Trading Scheme ETS. the world’s largest carbon trading market which covers the power sector and is expected to expand to other industries to reduce emissions and promote low-carbon development. The China ETS has the potential to become a major driver of the carbon trading market in the region.
Source
- Forestry-related
- Agri-related
- Carbon Capture & Storage
- Waste
- Chemicals
- Others
Platform Type
- Compliance
- Voluntary
System Type
- Cap & Trade
- Baseline & Credit
End-use
- Energy
- Utility
- Transportation
- Industrial
- Retail
- Others
Region
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- Latin America
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