Carbon Credit Market | Global Market Analysis Report – 2035

Carbon Credit Market Size and Share Forecast Outlook 2025 to 2035

The carbon credit market is estimated to be valued at USD 132.9 billion in 2025 and is projected to reach USD 576.4 billion by 2035, registering a compound annual growth rate (CAGR) of 15.8% over the forecast period.

The carbon credit market is projected to grow from USD 133 billion in 2025 to USD 576.4 billion by 2035, advancing at a CAGR of 15.8%. The growth contribution index shows steady progress, with values moving from 133 billion in 2025 to 178.3 billion in 2027 and 206.4 billion by 2028. Demand for carbon credits is being fueled by increasing regulatory frameworks, corporate carbon neutrality targets, and the need for companies to offset emissions. The strong upward trajectory signals growing acceptance of carbon trading mechanisms as essential tools for businesses to meet climate-related obligations and fulfill corporate environmental goals.

By 2031, the market is expected to reach 320.6 billion, progressing to 429.9 billion in 2033 and 497.8 billion in 2034, before closing at 576.4 billion in 2035. This sharp growth is driven by expanding global carbon pricing systems, growing demand from industries seeking emission reductions, and increased transparency in carbon markets. In my view, this rapid expansion highlights the importance of carbon credits in achieving emission reduction targets, with companies and governments both increasingly relying on these markets to manage their environmental impact. The growth contribution index confirms that carbon credit markets will continue to see robust, long-term demand.

Quick Stats for Carbon Credit Market

• Carbon Credit Market Value (2025): USD 132.9 billion
• Carbon Credit Market Forecast Value (2035): USD 576.4 billion
• Carbon Credit Market Forecast CAGR: 15.8%
• Leading Segment in Carbon Credit Market in 2025: Voluntary (38.6%)
• Key Growth Regions in Carbon Credit Market: North America, Asia-Pacific, Europe
• Top Players in Carbon Credit Market: 3Degrees, Allcot, Atmosfair, Carbon Clear, Carbon Collective, The Carbon Trust, Climeco, Climate Impact Partners, EcoAct, Ecosecurities, Green Mountain Energy, Shell, South Pole, Sterling Planet, Terrapass, Verra, WGL Holdings

Carbon Credit Market Key Takeaways

The carbon credit market holds a vital position within several larger markets, notably the emissions trading and environmental services sectors. Within the emissions trading market, it accounts for around 30-35%, as carbon credits are a central component of cap-and-trade systems, enabling companies to offset their emissions. The environmental services market sees a smaller share, approximately 5-7%, as it encompasses a wide range of activities, including waste management, water treatment, and pollution control, with carbon credits being one aspect of broader environmental efforts. The renewable energy market holds a more substantial share of 8-10%, driven by the increasing need for carbon credits to compensate for emissions produced during energy generation.

The green finance market, focused on investments in environmentally-friendly projects, contributes about 12-15% of the carbon credit market’s growth, reflecting the integration of carbon offset mechanisms into financial instruments. In the climate change mitigation market, carbon credits contribute roughly 10-12%, as they are essential in supporting international agreements and initiatives aimed at reducing greenhouse gas emissions. These sectors are interconnected, with the carbon credit market benefiting from policy shifts, corporate responsibility, and environmental regulations across the globe. The market’s growth is propelled by the rising need for businesses and governments to meet stringent emission reduction targets, underscoring its role in the broader global effort to tackle climate change. These percentages illustrate the carbon credit market’s direct influence and crucial role in multiple sectors driving environmental change.

Why is the Carbon Credit Market Growing?

The carbon credit market is experiencing robust expansion as governments, corporations, and financial institutions intensify their commitments toward achieving net zero emissions. Increasing regulatory frameworks, voluntary corporate pledges, and the rising cost of carbon emissions have accelerated demand for credits from verified environmental projects.

Advancements in carbon measurement, reporting, and verification technologies are improving transparency and trust, further supporting market credibility. In addition, global climate agreements and investor pressure on ESG compliance are prompting businesses to offset emissions alongside direct reduction strategies.

The market outlook remains strong as diversified participation from energy, manufacturing, agriculture, and service sectors continues to drive demand for scalable and high quality carbon offset solutions.

Segmental Analysis

The carbon credit market is segmented by type, end use, and geographic regions. By type, carbon credit market is divided into voluntary and compliance. In terms of end use, carbon credit market is classified into agriculture, carbon capture & storage, chemical process, energy efficiency, industrial, forestry & land use, renewable energy, transportation, waste management, and others. Regionally, the carbon credit industry is classified into North America, Latin America, Western Europe, Eastern Europe, Balkan & Baltic Countries, Russia & Belarus, Central Asia, East Asia, South Asia & Pacific, and the Middle East & Africa.

Insights into the Voluntary Type Segment

The voluntary type segment is projected to hold 38.6% of total market revenue by 2025 within the type category, positioning it as a leading contributor. Growth in this segment is being propelled by increasing corporate social responsibility initiatives, stakeholder expectations for sustainability, and investor focus on carbon neutrality.

The flexibility of voluntary markets allows companies to engage in customized offsetting strategies without being bound by regulatory caps. This has encouraged participation from industries seeking to enhance brand image, meet internal ESG goals, and appeal to environmentally conscious consumers.

The segment also benefits from the diversification of project types including renewable energy, reforestation, and soil carbon sequestration, making it a key driver in the global carbon credit ecosystem.

Insights into the Agriculture End Use Segment

The agriculture end use segment is expected to account for 38.6% of the total market revenue by 2025, making it a significant driver of market growth. Adoption is supported by the sector’s high potential for carbon sequestration through practices such as regenerative farming, agroforestry, and improved soil management.

Farmers and agribusinesses are increasingly participating in carbon credit programs to monetize sustainable land use practices while improving soil health and productivity. Technological advancements in monitoring and verification have made agricultural carbon projects more accessible and verifiable.

As food supply chains face mounting pressure to demonstrate sustainability, the agriculture segment is poised to remain a crucial contributor to the carbon credit market.

What are the Drivers, Restraints, and Key Trends of the Carbon Credit Market?

The carbon credit market is projected to grow as governments and corporations strive to meet climate goals and reduce their carbon footprints. Demand is being driven by stringent emission reduction targets, corporate climate responsibility, and carbon offsetting programs. Opportunities are opening in voluntary carbon markets, blockchain-enabled trading platforms, and emission reduction projects. Trends indicate growing interest in nature-based solutions and verified carbon standards. Challenges persist around market volatility, pricing transparency, regulatory complexities, and ensuring verified emission reductions from offset projects.

Demand Driven By Climate Commitments And Regulations

Demand in the carbon credit market is being strongly influenced by the increasing need for corporations, governments, and industries to meet their emission reduction commitments. With global climate targets becoming stricter, companies are purchasing carbon credits to offset their emissions and align with sustainability initiatives. Carbon credits are also being sought by industries unable to reduce their emissions directly, as a cost-effective alternative to compliance. In our opinion, the growth of the carbon credit market will continue to be driven by regulatory frameworks such as the Paris Agreement, where companies and countries are focused on meeting set emission reduction goals.

Opportunities In Voluntary Market And Blockchain Integration

Opportunities are opening in the voluntary carbon market, where businesses and individuals can voluntarily purchase carbon credits to offset their emissions. This market has seen increasing interest from sectors such as aviation, energy, and manufacturing. Moreover, blockchain technology is gaining traction for its ability to ensure transparency and traceability in carbon credit transactions, making them more reliable and trustworthy. In our view, the most significant opportunities will be found in the expansion of these voluntary markets, as corporations pursue climate leadership and consumers become more aware of carbon footprint reduction options.

Trends Focus On Nature-Based Solutions And Verifiable Standards

Trends in the carbon credit market are favoring nature-based solutions, such as reforestation and soil carbon sequestration, which are seen as effective and scalable options for carbon offsetting. These projects offer long-term carbon sequestration and are often more accessible than technological solutions. Verified carbon standards and certification programs like VCS (Verified Carbon Standard) and Gold Standard are becoming the benchmarks for ensuring the integrity of carbon credits. From an opinionated standpoint, the market will continue to see growth in nature-based solutions as they are more attractive to companies seeking cost-effective yet impactful ways to meet their climate commitments.

Challenges In Market Volatility And Regulatory Compliance

Challenges in the carbon credit market stem from market volatility, where fluctuating prices make it difficult for companies to predict costs over time. The lack of consistent pricing transparency and regulatory uncertainties also creates barriers for investors and companies looking to enter the market. Furthermore, ensuring the accuracy of carbon offset projects remains a challenge, as some projects may not deliver the expected emission reductions. In our view, the key to addressing these challenges lies in the standardization of carbon credit certifications, transparent pricing mechanisms, and the development of stronger regulatory frameworks that provide long-term market stability.

Analysis of Carbon Credit Market By Key Countries

The global carbon credit market is projected to grow at 15.8% from 2025 to 2035. China leads at 21.3%, followed by India 19.8% and France 16.6%; the United Kingdom 15% and United States 13.4% follow. As global carbon emission reduction efforts intensify, the demand for carbon credits is rising. Regulatory frameworks, carbon pricing mechanisms, and the transition to renewable energy are driving market growth. In particular, China and India are leading the way with significant emission reduction programs, while European and USA markets are focusing on compliance, trading platforms, and sustainable practices. In our view, countries that integrate carbon credits with national and international climate goals will dominate future market share. This report includes insights on 40+ countries; the top markets are shown here for reference.

Sales Outlook on Carbon Credit Market in China

The carbon credit market in China is expected to expand at 21.3%. China is the largest emitter of greenhouse gases, but its strong focus on carbon reduction policies and emission control programs is positioning it as a leader in the carbon credit market. The country’s national carbon trading scheme, along with stricter environmental policies and renewable energy adoption, has created significant demand for carbon credits. China’s growing emphasis on meeting climate goals and improving air quality has led to the development of domestic carbon markets, with government-led initiatives to drive the demand for carbon credits in various industrial sectors. China’s large-scale adoption of green technologies and investments in carbon-neutral infrastructure will continue to propel market growth.

• China’s national carbon trading program is expanding, increasing the demand for carbon credits in major industrial sectors.
• Government-led initiatives to meet carbon-neutral targets are driving the need for robust carbon credit markets.
• Rapid growth in renewable energy projects is enhancing China’s role in global carbon credit trading.

Demand Analysis for Carbon Credit Market in India

The carbon credit market in India is projected to grow at 19.8%. India’s focus on meeting international climate agreements and reducing its carbon footprint has made it one of the most promising markets for carbon credits. With its heavy reliance on coal-based energy production, India’s carbon credit market is expanding rapidly as the country takes steps toward carbon neutrality. Government-backed programs to promote clean energy, electrification, and emissions reduction in the industrial and transportation sectors are contributing to the market’s growth. The implementation of carbon trading schemes, alongside policies to promote green technologies, will drive the demand for carbon credits. As India moves towards low-carbon development, its carbon credit market is poised for substantial growth.

• Government policies supporting green energy and carbon reduction targets are boosting carbon credit demand in India.
• India’s carbon credit market is growing alongside the country’s renewable energy and industrial emission reduction programs.
• Carbon trading mechanisms are gaining traction as India continues to pursue its international climate commitments.

In-depth Analysis of Carbon Credit Market in France

The carbon credit market in France is forecast to grow at 16.6%. France is playing a pivotal role in Europe’s climate action strategy and is one of the key countries in the EU Emissions Trading System (EU ETS). France has developed strong regulatory frameworks and financial mechanisms to encourage the adoption of carbon credits, particularly in the manufacturing and energy sectors. As the country works towards achieving carbon neutrality by 2050, the demand for carbon credits continues to rise. France’s shift towards renewable energy, energy efficiency, and emission reduction policies supports the market’s growth. The nation is also focusing on green finance and carbon offset programs, positioning it as a leader in carbon credit trading in Europe.

• France’s commitment to carbon neutrality by 2050 is driving the demand for carbon credits in key sectors.
• The EU Emissions Trading System (EU ETS) is enhancing France’s role in carbon credit trading across Europe.
• Renewable energy adoption and carbon offset projects are contributing to the expansion of the carbon credit market in France.

Opportunity Analysis for Carbon Credit Market in United Kingdom

The carbon credit market in the UK is expected to rise at 15%. The UK has been at the forefront of global climate change efforts, with its own carbon trading scheme and strong governmental support for carbon credit markets. As part of its commitment to achieving net-zero emissions by 2050, the UK is driving demand for carbon credits, particularly in the energy, industrial, and transport sectors. The UK’s Emissions Trading Scheme (UK ETS) is designed to provide a flexible market-driven mechanism to reduce carbon emissions, further boosting the carbon credit market. With increasing investment in renewable energy, the UK is also expanding its carbon credit programs, including offset and compliance schemes.

• The UK Emissions Trading Scheme (UK ETS) is playing a crucial role in the demand for carbon credits across various sectors.
• As part of the net-zero 2050 goal, the UK is focusing on reducing emissions through carbon credit trading and renewable energy investments.
• Carbon offset programs in the UK are encouraging the growth of the carbon credit market, supporting emission reduction efforts.

Growth and Expansion Outlook on Carbon Credit Market in the United States

The carbon credit market in the United States is projected to grow at 13.4%. The USA is increasingly focusing on carbon reduction strategies as part of its climate action plan, with state-level programs and federal regulations driving the demand for carbon credits. The re-entry of the USA into the Paris Agreement and the Biden administration’s focus on climate change has accelerated the adoption of carbon pricing mechanisms, creating opportunities for the carbon credit market. As renewable energy projects expand and emissions reduction efforts in heavy industries continue, the market for carbon credits will likely increase. In our view, the USA market will see steady growth, driven by policy initiatives, the transition to cleaner energy, and rising demand for carbon offsets.

• The USA rejoining the Paris Agreement is driving the expansion of carbon credit markets through federal and state-level climate policies.
• Carbon credit markets are growing alongside the USA shift toward renewable energy and decarbonizing key industrial sectors.
• State-level carbon trading programs and federal regulations are fostering innovation and growth in the USA carbon credit market.

Competitive Landscape of Carbon Credit Market

Competition in the carbon credit market has been shaped by how companies present the transparency, scalability, and impact of their carbon offset projects in their brochures. 3Degrees, South Pole, and Climate Impact Partners lead with brochures emphasizing their robust carbon offset portfolios, offering credits from renewable energy, forestry, and methane capture projects, while ensuring verified, high-quality credits that adhere to global standards like VCS and Gold Standard. EcoAct and Carbon Trust highlight their expertise in providing tailored carbon offset solutions for businesses, governments, and non-profits, with a focus on strategic carbon management and sustainability reporting.

Verra, Carbon Clear, and Ecosecurities promote their certification and registry systems, ensuring full traceability and third-party verification for each carbon credit transaction. Shell and Green Mountain Energy position their corporate sustainability programs by integrating carbon credits into broader clean energy and climate action strategies, emphasizing transparency and measurable climate benefits. Strategy has been executed by providing detailed brochures that clearly communicate the environmental and financial benefits of carbon credits.

Brochures emphasize the environmental impact of each credit type, the geographical locations of projects, and the associated social benefits, such as biodiversity preservation and community development. Key selling points also include the crediting standards and verification processes, reassuring buyers of the credibility and long-term viability of their carbon offset investments. Companies differentiate by showcasing project success stories, offering flexible credit purchasing options, and emphasizing their role in helping clients meet climate goals and corporate sustainability targets.

Competitive advantage is gained when brochures present a clear and concise path for integrating carbon credits into business operations, demonstrating how these credits contribute to achieving net-zero targets, while also showcasing cost-effective and scalable solutions. In this market, the brochure serves as an essential decision-making tool, helping customers navigate complex carbon offset options and make informed, impactful choices.

Key Players in the Carbon Credit Market

• 3Degrees
• Allcot
• Atmosfair
• Carbon Clear
• Carbon Collective
• The Carbon Trust
• Climeco
• Climate Impact Partners
• EcoAct
• Ecosecurities
• Green Mountain Energy
• Shell
• South Pole
• Sterling Planet
• Terrapass
• Verra
• WGL Holdings

Scope of the Report