According to a report by MarketsandMarkets™, the carbon credit trading platforms market is set to nearly triple in size by 2027, reaching $200.6 Billion.
Currently, the market is valued at $67.6 billion, meaning that its projected compound annual growth rate (CAGR) will be 24.4%, representing soaring demand for carbon credits and, respectively, platforms where they can be traded.
The report also notes that right now the demand for such platforms is already at its highest point ever.
Of the different types of markets, the voluntary carbon market is said to be fastest growing during the forecast period.
What sets voluntary carbon markets apart from other types is that they do not operate within regulated markets, yet they allow both individuals and companies to buy carbon credits voluntarily, making them more flexible and accessible to all sectors and businesses globally.
As such, it is seen as a key tool to help the private sector mitigate the climate crisis and hit ne-zero goals by 2050.
Contrary to the voluntary carbon market, regulated markets are typically confined to specific regions.
In terms of system type, the cap and trade segment is expected to occupy the largest market share of the carbon credit trading platforms.
This system allows for more cost-effective emission reduction by means of utilizing market forces, where there is a cap on the total emissions.
Hence, it provides a strong incentive for investments in cleaner, lower-carbon technologies that will essentially drive the market.
Another important takeaway from the report is that the European market is likely to have the largest share in the global carbon credit trading platforms market.
The region operates a cap and trade program that was launched already in 2005 and it is currently the world’s largest Emission Trading Scheme (ETS).