The global carbon credit market is experiencing explosive growth, driven by robust corporate demand, net-zero targets, and tightening regulations. This market saw 161 million credits retired in 2023.
Chicago, Feb. 02, 2026 (GLOBE NEWSWIRE) — According to recent data from Astute Analytica, the global carbon credit market was valued at US$ 1,142.40 billion in 2024 and is projected to hit the market valuation of US$ 4,983.7 billion by 2035 at a CAGR of 18% during the forecast period 2025–2035.
The carbon credit market is on the brink of a period of extraordinary growth, driven primarily by strong corporate demand for verified emissions reductions. In 2023 alone, companies retired an impressive 161 million carbon credits, underscoring the accelerating commitment of businesses to meet climate goals. This surge is further propelled by over 5,200 firms aligning with Science Based Targets, a framework that guides companies in setting ambitious, science-aligned emissions reduction pathways.
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As the carbon credit market matures, it is witnessing a pronounced bifurcation in pricing that reflects the diversity and quality of available credits. Low-cost renewable energy credits are trading at relatively modest prices, often as low as $1 to $2 per ton of CO2, making them accessible but limited in scope. In stark contrast, premium nature-based credits that deliver verified social and ecological co-benefits fetch prices exceeding $12 per ton. At the high end of the spectrum, technology-driven high-permanence removals—such as direct air capture and carbon storage—command staggering prices around $600 per ton.
Evolving Carbon Markets: Beyond Carbon Pricing to Co-Benefit Valuation
The carbon credit market is undergoing a significant evolution, moving beyond the traditional focus on simply pricing carbon emissions to explicitly recognizing and monetizing verified co-benefits. This shift reflects a growing understanding that carbon projects can—and should—deliver broader social and ecological value alongside emissions reductions. As a result, the market is increasingly rewarding projects that demonstrate tangible positive impacts on biodiversity, community welfare, and ecosystem health, creating a more nuanced and multidimensional approach to carbon credit valuation.
One of the clearest indicators of this market transformation is the emergence of a quantifiable price premium for carbon credits that carry biodiversity certifications, such as the Climate, Community & Biodiversity (CCB) Standards. Credits certified under these rigorous frameworks command an average price premium of over $2.50 per credit, signaling that buyers are willing to pay more for projects that deliver measurable environmental and social benefits.
The monetization of co-benefits is creating a distinct, higher-value asset category within the carbon credit market. Projects with strong social and ecological outcomes are no longer viewed merely as carbon offset providers but as multifaceted investments that support biodiversity conservation, community empowerment, and ecosystem restoration.
Transforming the Supply Side: Investment and Regulation Drive Growth
The supply side of the carbon credit market is undergoing a profound transformation, fueled by targeted investments and the establishment of expansive compliance frameworks. Investors are increasingly channeling capital into regions that offer both robust regulatory environments and rich potential for nature-based carbon projects. This strategic focus ensures that carbon credit supply aligns with stringent quality standards and market demands, while also supporting sustainable development in regions with high ecological value.
Over the past decade, the carbon credit market has attracted nearly $42 billion in investments dedicated to the development of carbon projects worldwide. This influx of capital has accelerated the creation of high-impact initiatives, from reforestation and conservation efforts to innovative carbon capture technologies. The momentum shows no signs of slowing; 2024 is poised to set a new record for fundraising, with approximately $14 billion already committed or raised by the third quarter alone.
Investment and project issuance are notably concentrated in specific geographies, with Colombia emerging as a key leader in the nature-based carbon credit space. Since the inception of the carbon credit market, Colombia has issued an impressive 142 million nature-based credits, leveraging its vast forests and biodiversity to generate high-quality carbon offsets.
Technology-Based Carbon Credits: Emerging Market Leaders
Technology-based carbon credits have solidified their dominant position in the carbon credit market, capturing a substantial 46.9% share. This growing prominence is driven by an increasing demand for permanent, verifiable, and scalable carbon removal methods that reliably address climate change. Unlike some nature-based solutions, which are vulnerable to reversal risks like forest fires or land-use changes, technological solutions provide a more durable and quantifiable approach to removing CO2 from the atmosphere.
Among the technological solutions, Direct Air Capture (DAC) and Carbon Capture and Storage (CCS) stand out as pioneering methods that extract CO2 directly from the atmosphere and securely store it underground. These technologies offer an unprecedented level of control and precision, enabling carbon removal at scale with measurable outcomes. DAC, in particular, captures ambient CO2 regardless of its source, while CCS focuses on capturing emissions from industrial processes before they reach the atmosphere.
The rapid development and deployment of technology-based carbon removal projects underscore the sector’s growing influence. As of early 2025, there are over 100 DAC projects in various stages of development worldwide, signaling strong investor confidence and technological advancement. One notable example is Iceland’s Orca plant, which exemplifies the operational feasibility of this technology by capturing approximately 4,000 tons of CO2 annually.
Carbon Removal Projects: Leading the Market’s New Climate Strategy
Carbon removal projects have surged to dominate the market, commanding an impressive 75.3% share driven by a significant evolution in global climate strategy. The focus has shifted beyond merely preventing future emissions toward actively extracting existing CO2 from the atmosphere. This paradigm shift recognizes that addressing legacy carbon is critical to achieving truly ambitious net-zero targets.
Unlike avoidance projects that primarily slow the pace of pollution by reducing ongoing emissions, carbon removal initiatives take a more proactive stance by reversing atmospheric carbon accumulation. This fundamental difference elevates the importance of removal projects for governments, corporations, and organizations committed to offsetting their historical emissions and meeting stringent climate goals.
Nature-based carbon removal solutions form a substantial part of this market category, leveraging natural processes to sequester CO2. A striking example from 2024 is an Amazon reforestation project that planted 10 million trees, with an estimated potential to remove 2 million tonnes of CO2. Such initiatives harness the carbon capture capacity of forests, wetlands, and soils, providing co-benefits like biodiversity preservation and ecosystem restoration.
Europe’s Leadership in the Global Carbon Credit Market
Europe holds a commanding position in the global carbon credit market, capturing over 51.10% of the total market share. This dominant stance is largely attributed to the region’s well-established and mature compliance framework, which sets rigorous standards for emissions reductions. Europe has also been at the forefront of pioneering investments in high-performance carbon removal technologies, which enhance the credibility and long-term impact of carbon credits.
A key pillar underpinning Europe’s dominance is the EU Emissions Trading System (ETS), which remains one of the world’s most advanced carbon markets. In 2024, allowances within the ETS consistently traded above €70 per tonne of CO2, reflecting strong market confidence and regulatory stringency. This high price level creates a compelling financial incentive for industries to reduce emissions and invest in cleaner technologies.
The stringent regulatory environment in Europe not only affects compliance-based markets but also energizes corporate actions within the voluntary carbon market. Companies are increasingly motivated to go beyond mandated reductions by retiring carbon credits voluntarily to meet their sustainability goals and enhance their environmental credentials. In the previous year alone, European corporations retired over 52 million carbon credits, demonstrating a substantial commitment to offsetting emissions voluntarily and supporting credible carbon removal projects.
Carbon Credit Market Major Players:
- 3Degrees
- Atmosfair
- Climate Impact Partners
- ClimeCo LLC
- EKI Energy Services Ltd.
- Finite Carbon
- Moss.earth
- NativeEnergy
- NATUREOFFICE
- Pachama, Inc.
- South Pole Group
- Tasman Environmental Markets
- Terrapass
- Verra Carbon
- Xpansiv
- Other Prominent Players
Market Segmentation Overview:
By Type
- Voluntary Markets
- Compliance Markets
By Source
- Technology Based
- Biomass
- Forest Based
- Sewage Treatment Plants
- Wastewater Treatment Plants
By Project Type
- Carbon Avoidance Projects
- Carbon Removal projects
-
- Nature Based
-
- Technology Based
By Selling Platform
- Direct Contact
- Climate Exchange Platforms
By Business Size
- Small and Micro Enterprises
- Medium and Large Businesses
By Industry
- Power Generation
-
- Biomass
-
- Geothermal
-
- Hydrogen
-
- Solar
-
- Others
- Waste Treatment Plant
-
- Sewage Treatment
-
- Commercial Waste Treatment
-
- Industrial Waste Treatment
-
- Municipal Solid Waste
-
- Others Waster Treatment
- Cement
- Oil & Gas
- Iron & Steel
- Chemical & Petrochemical
- Other Industries
By Region
- North America
- Europe
- Asia Pacific
- Middle East & Africa
- South America
For more information about this report visit: https://www.astuteanalytica.com/industry-report/carbon-credit-market
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