Dominated by compliance mandates and high prices, the carbon credit market sees a major shift. Corporate demand is pivoting from avoidance to verifiable, high-cost carbon removal, driving investment in technology and nature-based project integrity.
Chicago, Aug. 14, 2025 (GLOBE NEWSWIRE) — The global carbon credit market was valued at US$ 1,142.40 billion in 2024 and is expected to reach US$ 4,983.7 billion by 2035, growing at a CAGR of 18% during the forecast period 2025–2035.
The narrative of the carbon credit market is one of explosive growth and increasing sophistication. The market’s foundational metrics underscore a sector moving decisively into the financial mainstream. In 2023, the value of the voluntary carbon market (VCM) was firmly established at approximately $2 billion. Projections for the coming years are even more staggering, with forecasts anticipating a market value between $10 billion and $40 billion by 2030. This financial expansion is built on tangible activity; a total of 155 million carbon credits, each representing a metric ton of CO2, were retired in 2023, while the total volume of traded credits reached 258 million.
The scale of the supply side is equally impressive, with more than 5,000 active carbon credit projects registered globally as of early 2024. A pivotal development is the work of the Integrity Council for the Voluntary Carbon Market (ICVCM), which began approving the first programs meeting its Core Carbon Principles (CCP) in late 2023. These CCP-labeled credits are forecast to trade at a significant premium, with initial estimates suggesting a potential value increase of over $3 per ton, signaling a market that is actively rewarding integrity.
Key Findings in Carbon Credit Market
Market Forecast (2035)
US$ 4,983.7 billion
CAGR
18%
Top Drivers
Increasingly stringent government regulations and ambitious national climate targets.
Growing corporate net-zero commitments and investor pressure for ESG performance.
Rising global carbon prices making emission reduction projects more viable.
Top Trends
Shift in demand from avoidance to permanent carbon removal credits.
Development of digital MRV for enhanced transparency and credit integrity.
Standardization of contracts and rapid growth of exchange trading platforms.
Top Challenges
Lack of a single, globally accepted standard for credit quality.
Concerns over greenwashing and the integrity of offset project claims.
Scaling carbon removal technologies to meet massive future market demand.
Corporate Decarbonization Strategies are Now Fueling Unstoppable Carbon Credit Market Demand
Corporate net-zero commitments are the primary engine of demand within the voluntary carbon credit market. In 2023, corporations showcased their commitment by purchasing and retiring at least 161 million carbon credits. This trend is anchored by a broader movement towards accountability; as of 2024, over 5,200 companies have set climate targets with the prestigious Science Based Targets initiative (SBTi). A forthcoming policy change from the SBTi is expected to allow the use of carbon credits to abate up to 10% of a company’s Scope 3 emissions, a landmark decision that could unlock billions in new demand.
An analysis of purchasing trends reveals specific sector leadership. Companies in the energy sector were the single largest buyers in 2023, acquiring over 33 million credits. The financial services industry was the second-largest participant, purchasing more than 16 million credits. This external purchasing is increasingly complemented by internal corporate policy, with over 400 companies worldwide having implemented an internal carbon price as of 2024, creating a powerful, built-in mechanism for driving decarbonization investments.
The Enduring Financial and Environmental Appeal of Nature-Based Carbon Credit Solutions
Within the diverse portfolio of available credits, nature-based solutions (NBS) remain the dominant and most valuable category. In 2023, nature-based credits accounted for the largest share of market value, representing over $1.3 billion in total transactions. This financial weight is supported by immense volume, with credits from forestry and land-use projects seeing transaction volumes of 163 million credits during the same year. Quality within this segment is fetching significant premiums; the price for top-tier nature-based credits, particularly those from afforestation and reforestation projects, frequently surpassed $15 per ton in 2024.
The carbon credit market is also quantifying the value of positive externalities. Projects delivering biodiversity co-benefits, certified under rigorous standards like the Climate, Community & Biodiversity (CCB) Standards, can command a price premium of over $2.50 per ton. Looking ahead, the potential of blue carbon projects, which focus on coastal and marine ecosystems, is immense, with a scientifically estimated sequestration capacity of up to 1.39 billion tons of CO2 annually.
Technological Carbon Removal Emerges as a High-Value, Long-Term Investment Frontier
A new frontier of high-integrity, durable carbon removal is rapidly gaining traction and investment in the carbon credit market. As of early 2024, the total amount of durable carbon removal contracted through long-term offtake agreements had already reached 6.7 million tons of CO2. While nascent, this segment is defined by its value and permanence, with the average price for a technologically removed ton of carbon via methods like Direct Air Capture (DAC) standing at approximately $600 in 2023. This high price point has not deterred visionary corporate buyers. Frontier, an advance market commitment led by Stripe, Alphabet, and Meta, has pledged over $1 billion to purchase permanent carbon removal credits.
Tech giant Microsoft has backed its commitments with capital, having already contracted for over 2.6 million metric tons of carbon removal across its portfolio as of 2023. This investment is translating into operational assets; Climeworks’ Mammoth DAC plant, which came online in 2024, is designed to capture 36,000 tons of CO2 per year, proving the technology’s commercial viability.
Aviation Sector Compliance Mandates Create a Significant and Reliable Demand Floor
The international aviation sector represents a formidable and legally mandated source of credit demand in the carbon credit market . Projections show that the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is set to create demand for 64 to 158 million carbon credits in the year 2025 alone. The global reach of this program underpins its market impact; in its first official phase (2024-2026), 115 countries are participating in CORSIA, representing the vast majority of international aviation activity. This compliance-driven demand has created a distinct asset class, with the price of CORSIA-eligible credits (CECs) trading at around $7 per metric ton in early 2024, establishing a reliable price floor for qualifying projects and providing a steady source of demand for the foreseeable future.
A Globalized Market Characterized by Strong Regional Demand Centers of Gravity
While global in scope, demand within the voluntary carbon credit market is concentrated in several key economic regions. North American companies currently lead the world as the largest source of demand, having retired a massive 66.8 million credits in 2023. Following closely, European companies demonstrated their strong commitment to climate action by retiring 52.4 million credits during the same period. However, the market’s future growth is increasingly tied to emerging economies. Demand from companies in Asia is expanding rapidly and is now a major force, with a notable 28.1 million credits retired in 2_023, signaling a geographic diversification that will continue to shape the industry’s future._
Analyzing the Supply-Side Dynamics and Issuance Trends of Carbon Credits
A healthy carbon credit market requires a robust supply, and the issuance of new credits is keeping pace with demand growth. In 2023, the issuance of new carbon credits in the voluntary market reached 255 million. Geographically, India has emerged as a powerhouse of supply, becoming the largest single source of issued credits in 2023 by placing over 60 million credits onto the market, a volume largely driven by its renewable energy projects. Despite record retirements, the pipeline of available credits remains strong, providing a buffer for future demand surges. The volume of available, un-retired carbon credits held on registries stood at over 600 million tons at the start of 2024, ensuring ample supply for corporate buyers in the near term.
The Financialization and Price Stratification of the Modern Carbon Credit Market
The increasing financialization of the carbon credit market is a clear sign of its maturity. Exchange-traded volume has seen a significant increase, exemplified by the CME CBL Nature-Based Global Emissions Offset (N-GEO) futures contract, which now trades millions of tons annually and provides critical price transparency. This market maturity is attracting sophisticated capital; at least 15 new carbon-focused investment funds were launched in 2023, all aiming to invest directly in carbon credit projects and portfolios. This influx of financial acumen is driving a distinct price stratification based on quality.
In early 2024, prices for standard renewable energy credits, such as those from India, were trading for as low as 1−1−2 per ton. In stark contrast, S&P Global’s Platts assessment for “Premium” nature-based credits exceeded $12 per ton during the same period, confirming that the market is actively pricing in project quality. This trend is accelerating, with the price gap between lower-quality and higher-quality credits having widened to more than $10 per ton by the end of 2023.
Future Outlook: Monumental Investment and Supply Growth Needed to Meet Demand
Looking toward the end of the decade, the trajectory for the carbon credit market is one of exponential growth and critical importance. Investment in the underlying project infrastructure is already scaling up, with investment in carbon capture, utilization, and storage (CCUS) projects reaching $6.4 billion in 2023. The demand potential is astronomical. A forecast from BloombergNEF (BNEF) illustrates that if carbon credit use is limited to just 1% of the European Union’s total emissions, it would still generate demand for 36 million credits annually.
However, the ultimate challenge lies in scaling supply to meet the demands of global net-zero ambitions. To keep the world on track for its 2030 climate goals, expert analysis concludes that the annual supply of carbon credits will need to grow to approximately 1.5 billion tons—a multi-fold increase from today’s levels, presenting one of the most significant environmental and financial opportunities of our time.
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