Carbon Offsetting Market Size, Share, and Industry Analysis, By Type (Voluntary Market and Compliance Market), By End-user (Power, Energy, Aviation, Transportation, Industrial, and Others), and Regional Forecast, 2024-2032

The industrial segment primarily drives the carbon offsetting market. Industrial facilities, such as manufacturing plants, refineries, and power plants, can implement emissions-reduction projects to decrease their carbon footprint. These projects may involve adopting energy-efficient technologies, optimizing production processes, implementing carbon capture and storage systems, or switching to renewable energy sources such as solar and wind power. Furthermore, the industrial sector plays a pivotal role in the carbon offsetting market by investing in clean technology, energy efficiency projects, and renewable energy sources. These initiatives help reduce greenhouse gas emissions, contributing to global efforts against climate change. Industries can offset their carbon footprint, promoting environmental sustainability while adhering to regulatory standards.

The aviation sector also drives the carbon offsetting market. Airlines and aviation companies participate in carbon offsetting programs to compensate for their greenhouse emissions. These programs involve purchasing carbon credits from projects that reduce emissions, such as renewable energy projects and methane capture projects. By investing in these projects, airlines can offset their emissions. In addition, the aviation sector contributes to the carbon offsetting market by investing in sustainable aviation fuels, improving aircraft fuel efficiency, and supporting reforestation projects. These efforts reduce the environmental impact of air travel, helping the industry move toward carbon neutrality and meet global climate targets.

• The Indian government finalized a total of 13 GHG mitigation activities, alternative materials, and removal activities, such as the storage of renewable energy, green hydrogen, compressed biogas, and others, that can qualify for the international trade of carbon credits under Article 6.2 of the Paris Agreement.

Carbon capture and storage (CCS) technologies capture carbon dioxide emissions produced by industrial processes or power generation and store them underground or use them for industrial use. Industrial sectors with high CO2 emissions, such as cement production, steel manufacturing, and chemical processing, can deploy CCS to reduce their carbon footprint and generate carbon offset credits.  

By region, the major carbon offsetting  market consumers are China, Japan, and India in Asia Pacific; the U.S. and Canada in North America; Germany and France in Europe; and Saudi Arabia and UAE in the Middle East.

• In 2022, Asia was the world's largest producer of carbon offsets, producing 44% of the global market.


• In 2023, electricity generation in the energy market in the Asia Pacific region amounted to 15.81tn KWh.


• In Asia Pacific, the total electricity generation in the energy market amounted to 13.21tn KWh in the year 2022.

Key Insights

The report covers the following key insights:

• Key Emerging Trends – For Major Regions


• Key Developments: Mergers, Acquisition, Partnership, and Others


• Latest Technological Advancement


• Insights on Sustainability


• Porters Five Forces Analysis


• Impact of COVID-19 on the Market

Segmentation

Analysis by Type

By type, the voluntary segment holds a significant share of the global carbon offsetting market.

• Many companies participate in the voluntary carbon offset market as part of their corporate social responsibility (CSR) initiatives. By purchasing carbon offsets, businesses can demonstrate their commitment to environmental sustainability and offset emissions.


• Organizations set carbon neutrality goals to achieve a net zero carbon emission. The voluntary carbon offset market enables them to compensate for their residual emissions by investing in projects that reduce or remove carbon dioxide from the atmosphere such as renewable energy and methane capture projects. 

Analysis by End-user

By end-user, the construction segment holds a considerable share of the global carbon offsetting market.

• Power companies can invest in renewable energy sources such as solar, wind, and biomass to replace fossil fuel-based electricity generation.


• By generating electricity from renewable sources, power companies can significantly reduce carbon dioxide emissions associated with power generation, thereby creating carbon offset.

Regional Analysis

The Asia Pacific region holds a considerable share of the carbon offsetting market. In the Asia Pacific region, growing awareness of climate change and its adverse impact on the environment, economy, and society drives the demand for carbon offsets among businesses and individuals. The consumer is becoming more environmentally conscious, leading to increased pressure on companies to adopt sustainable practices and offset their carbon emissions.

Production of Electricity, By Country, 2023

• China - 45%


• U.S. - 25%


• India- 8%


• Russia – 6%


• Rest of the World - 16%

Key Players Covered

The report includes the profiles of key players, such as 3Degrees, Finite Carbon Corp., EKI Energy services limited, Native Energy, Carbon Care Asia Limited, Terrapass, Climetrek Ltd., Carbon Credit Capital, Nature office GmbH, Forest Carbon, Bluesource, TEM, and Climate Impact Partners.

Key Industry Developments

• In October 2023, Solidia Technologies appointed climate consultancy 3Degrees to manage the measurement, verification, and sale of carbon credits for CO2 emissions reductions generated using Solidia Technologies products.