A new report from the City of London Corporation, developed in collaboration with the UK Carbon Markets Forum, highlights the economic potential of high-integrity carbon credit markets for the United Kingdom.
The analysis positions the UK as a key player in a rapidly expanding global market, with opportunities spanning finance, services, and project development.
The report underscores the role of carbon markets in addressing the global financing gap for net-zero targets, while also delivering environmental and social co-benefits. It argues that strengthening market integrity and transparency will be essential to unlocking further growth and investment.
Economic Value and Growth Potential
The findings provide one of the first quantified assessments of the UK’s carbon credit ecosystem.
UK-based entities are currently estimated to generate around £1.2 billion (~$1.6 billion) in gross value added (GVA) from participation in global carbon markets, while investment into UK carbon projects reached approximately $3.5 billion (~$4.7 billion) between 2023 and 2025.
Looking ahead, the report suggests that carbon markets could expand by as much as 50 to 190 times by 2050, driven by increasing demand for verified emissions reductions. The UK is seen as well-positioned to benefit from this growth, particularly through its established financial sector and expertise in environmental markets.
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In addition to direct economic value, the report highlights opportunities to expand service exports, with global demand rising for carbon market infrastructure, verification, and advisory services. The UK’s role in providing these services could become a significant driver of future economic activity.
The analysis also points to a growing insurance market for carbon-related products, with insured value already exceeding £380 million (~$511 million) This reflects increasing sophistication in the market, as financial instruments and risk management tools evolve to support scaling.
Overall, the report frames carbon credit markets as both a climate tool and an economic opportunity, with policy support and robust standards seen as key to sustaining long-term growth and market confidence.
Read more: UK Moves Closer To 2027 Carbon Border Tax With New Draft Rules
