Carbon Credit Trading Market Size, Share, Growth, and Industry Analysis, By Type (Voluntary, Compliance), By Application (Energy, Manufacturing, Forestry), Regional Insights and Forecast to 2033

Carbon Credit Trading Market Overview

The Carbon Credit Trading Market size was valued at USD 97.34 million in 2025 and is expected to reach USD 816.29 million by 2033, growing at a CAGR of 30.45% from 2025 to 2033.

The global carbon credit trading market plays a crucial role in reducing greenhouse gas emissions by enabling organizations to offset their carbon footprint through regulated and voluntary credit systems. As of 2023, more than 75 active carbon pricing initiatives were operating globally. In total, approximately 12.5 billion metric tons of CO₂ equivalent (tCO₂e) were traded in formal markets, showing a strong increase of over 18% from 2019. These initiatives include both cap-and-trade systems and credit-based mechanisms, supporting efforts to reach international climate targets. Compliance carbon markets dominated the trading landscape in 2023, accounting for over 99% of the total volume, with more than 450 million certified emission allowances actively traded. The European Union Emissions Trading System covered approximately 11,000 facilities, which represented nearly 45% of the EU’s total emissions. In Asia, China’s national carbon market became the largest in the region, covering over 3.5 billion tCO₂e, which corresponds to nearly 40% of its national emissions. The voluntary carbon credit market also gained traction, with approximately 160 million tCO₂e worth of voluntary credits transacted in 2023. This figure marks a notable rise in voluntary participation, driven by corporate net-zero targets and sustainability strategies across industries ranging from energy to manufacturing.

Key Findings

Driver: Accelerated adoption of carbon neutrality commitments across the industrial and energy sectors, with over 3,800 corporations implementing emission offsetting strategies by the end of 2023.

Country/Region: Europe leads the carbon credit trading market, accounting for more than 5.2 billion tCO₂e traded in 2023 under the EU Emissions Trading System, followed closely by China’s national carbon market at over 3.5 billion tCO₂e.

Segment: The compliance carbon market segment dominated in 2023, comprising over 99% of the global carbon credit trading volume, with voluntary markets contributing approximately 160 million tCO₂e.

Carbon Credit Trading Market Trends

The carbon credit trading market has witnessed exponential growth in traded volume and project diversity. In 2023, over 12.5 billion metric tons of carbon dioxide equivalent (tCO₂e) were traded globally through various carbon schemes. Out of this, the compliance carbon markets accounted for more than 99% of all traded carbon units. The European Union Emissions Trading System regulated approximately 45% of total emissions in the EU, covering over 11,000 power stations and industrial plants. In the Asia-Pacific region, China’s national carbon market traded more than 3.5 billion tCO₂e, covering approximately 2,200 companies in the power sector. The Chinese scheme represents one of the largest carbon trading initiatives by volume, second only to the European system. The voluntary carbon market also showed upward momentum. By the end of 2023, more than 1.3 billion carbon credits had been issued, with approximately 776 million credits retired. Verified carbon offset projects, especially those in nature-based solutions and renewable energy, saw steady demand. Nearly 2,300 verified projects were in active stages worldwide, highlighting a diverse portfolio of emissions reductions across forestry, wind, solar, and community-based solutions.

Pricing trends remained volatile. In 2023, compliance market credits in Europe traded at an average of €57 per tCO₂e, while voluntary market prices varied between $8 and $30 per tCO₂e, depending on the project category and quality rating. Forestry credits with a BB rating or higher fetched up to 25% higher premiums than baseline-rated units. Carbon trading regulations expanded significantly. By early 2024, 75 carbon-pricing instruments were active, covering approximately 24% of global greenhouse gas emissions. The introduction of new mechanisms in countries like Indonesia, Colombia, and Turkey added over 800 million tCO₂e to the compliance credit pool. Simultaneously, the European Union expanded its carbon market to road transport and residential buildings, extending coverage to an additional 40% of regional emissions. Corporate adoption of net-zero goals further influenced trends. More than 3,800 global companies reported using carbon credits to meet environmental targets in 2023. This corporate-led demand drove the development of enhanced traceability tools, such as digital monitoring platforms and blockchain-integrated registries, which facilitated over 150 million transactions in the past year. The carbon credit trading market continues to evolve with dynamic pricing models, increasing volumes, and quality-driven differentiation. Market mechanisms are becoming more sophisticated as global climate targets push both compliance and voluntary trading systems toward higher integrity and transparency.

Carbon Credit Trading Market Dynamics

DRIVER

Expansion of carbon neutrality policies by governments and corporations

Governments and corporations globally are increasingly adopting carbon neutrality goals, driving higher demand for carbon credits. As of 2023, more than 130 countries, representing over 85% of global GDP, had announced or were considering net-zero targets. In the corporate sector, over 3,800 companies participated in carbon offsetting through verified emissions reduction projects. The European Union Emissions Trading System (EU ETS) covered around 45% of emissions within the EU, while China's national trading system included over 3.5 billion tCO₂e in allowances. These regulatory mandates and voluntary pledges have intensified carbon trading activity, particularly for compliance credits, which accounted for over 12 billion metric tons traded in 2023.

RESTRAINT

Inconsistency in credit verification and lack of global standardization

The absence of a universal standard for carbon credit verification continues to hinder market integrity and investor trust. As of 2023, more than 14 different verification standards were in use globally, including Gold Standard, Verra, and ACR. This fragmentation leads to significant discrepancies in pricing and project evaluation. For instance, nature-based carbon credits with the same emission offset potential traded at prices varying by up to 60%, depending on the registry used. Additionally, more than 800 project developers worldwide use different monitoring, reporting, and verification (MRV) methodologies, further complicating credit quality comparison. Lack of centralized enforcement allows issues such as double counting and overstated emission savings, weakening market credibility.

OPPORTUNITY

Integration of digital carbon trading platforms and tokenized credits

The growth of digital trading platforms and blockchain-based registries presents a major opportunity for enhancing transparency and scalability. As of 2023, more than 150 million carbon credits had been transacted via digital exchanges such as Xpansiv and AirCarbon Exchange. Blockchain platforms offered tokenized carbon assets, allowing traceability and fractional trading of credits. At least 60 digital carbon marketplaces were operating globally, with over 30% offering automated compliance and project validation. This digital integration also enables real-time pricing and smart contract deployment, improving efficiency for over 900 active corporate participants using such tools. The combination of fintech and environmental assets opens new access channels, particularly in emerging markets.

CHALLENGE

Rising compliance costs and administrative burdens

Despite growing interest, the carbon credit trading market faces rising compliance costs, especially for small and medium-sized enterprises. In 2023, over 60% of participating firms reported difficulties navigating carbon market regulations, with compliance documentation and MRV costs averaging $3–$6 per tCO₂e. Governments in more than 30 countries introduced multi-layered approval processes requiring third-party audits, which delayed credit issuance timelines by up to 9 months in some cases. Additionally, companies managing cross-border projects faced complexities due to mismatched regulatory frameworks across jurisdictions. The high cost of compliance and lack of harmonization in policy restrict participation, particularly in developing economies where carbon offset projects are most needed.

Carbon Credit Trading Market Segmentation

The carbon credit trading market is segmented by type and application, with distinct dynamics in each category. In 2023, over 12.5 billion metric tons of CO₂ equivalent (tCO₂e) were traded across compliance and voluntary systems. By application, energy-intensive sectors contributed more than 60% of the total demand for credits, followed by forestry and manufacturing.

By Type

• Voluntary Carbon Market: The voluntary segment saw over 160 million tCO₂e traded in 2023, marking a substantial rise in participation from corporations with net-zero goals. More than 3,800 companies actively offset their carbon emissions by purchasing verified emission reduction (VER) credits. Forestry-based and renewable energy projects dominated this space, accounting for approximately 70% of total voluntary offsets. Regions like Southeast Asia and South America hosted the majority of these projects, with over 1,200 registered initiatives.
• Compliance Carbon Market: Compliance markets remain the backbone of the carbon credit ecosystem, accounting for over 99% of global carbon credit volume. The EU Emissions Trading System (EU ETS) alone covered about 5.2 billion tCO₂e in 2023. China’s national scheme added another 3.5 billion tCO₂e, making it the second-largest compliance system globally. Participation in compliance markets is mandatory for over 20,000 facilities across regulated industries, including steel, cement, and power generation.

By Application

• Energy Sector: The energy sector was responsible for more than 6 billion tCO₂e in credit transactions in 2023. Power generation companies used offsets to comply with emissions caps, particularly coal-fired plants in Asia and Europe. Wind and solar offset projects contributed nearly 40% of credit issuances within this segment.
• Manufacturing Sector: Industrial manufacturers accounted for over 1.8 billion tCO₂e in credit purchases. Cement and steel industries used compliance credits to meet national and international regulatory thresholds. Over 4,500 manufacturing sites globally were actively participating in credit trading programs.
• Forestry Sector: Forestry and land-use-based credits comprised approximately 22% of total traded credits, equating to nearly 2.8 billion tCO₂e in 2023. REDD+ programs and afforestation projects were concentrated in Latin America and Southeast Asia, where over 600 million hectares of land are actively managed for offset generation.

Carbon Credit Trading Market Regional Outlook

The global carbon credit trading market has seen significant regional differentiation in adoption and trading volume. As of 2023, more than 60 countries were running or developing carbon trading schemes, with over 30% of global emissions covered under some form of market mechanism. Regional markets differ by policy framework, credit types, and transaction volume, with Asia-Pacific and Europe leading in total traded carbon credits.

• North America

North America remains a critical hub for voluntary carbon markets, with the United States accounting for over 40 million tCO₂e in voluntary credit transactions in 2023. California’s Cap-and-Trade Program alone oversaw the trading of more than 300 million allowances in the same year. Canada’s Output-Based Pricing System (OBPS) involved over 600 facilities and traded credits across multiple provinces. North American buyers showed strong interest in technology-based removal credits and carbon capture projects, which grew by over 35% year-over-year.

• Europe

Europe leads the world in compliance carbon trading. The EU ETS continues to be the largest carbon market globally, managing over 5.2 billion tCO₂e in 2023 across 11,000 installations in 30 countries. Germany, France, and the Netherlands dominated trading volumes, with carbon credit prices ranging between €80–€100 per metric ton. Europe also houses more than 20 carbon exchanges and carbon-focused financial institutions. The UK Emissions Trading Scheme (UK ETS), operational since 2021, handled around 140 million tCO₂e in 2023 alone.

• Asia-Pacific

Asia-Pacific is rapidly expanding its carbon trading infrastructure. China’s national ETS covered over 3.5 billion tCO₂e in 2023 across 2,200 coal-fired power plants. South Korea’s K-ETS traded more than 900 million credits, while Japan operated regional pilot schemes in Tokyo and Saitama covering 40 million tCO₂e. Southeast Asia contributed significantly to voluntary offset supply, with Indonesia and Vietnam issuing over 60 million tCO₂e in REDD+ credits. Australia’s Emissions Reduction Fund saw over 190 million Australian Carbon Credit Units (ACCUs) issued by the end of 2023.

• Middle East & Africa

Although still emerging, carbon credit trading in the Middle East and Africa is gaining traction. South Africa’s Carbon Tax offset scheme involved over 350 registered facilities and processed more than 18 million tCO₂e in 2023. The UAE launched its voluntary carbon exchange platform in Abu Dhabi, handling 2.5 million tCO₂e within its first year. Kenya and Ghana led the continent in voluntary project issuance, with combined REDD+ and renewable projects generating over 12 million credits. Regulatory developments are underway in more than 8 African nations aiming to establish national registries by 2025.

List Of Carbon Credit Trading Companies

• European Energy Exchange (EEX) (Germany)
• ICE (Intercontinental Exchange) (USA)
• Chicago Mercantile Exchange (CME) Group (USA)
• NASDAQ (USA), Xpansiv (USA)
• CBL Markets (USA)
• APX (USA)
• Markit (UK)
• AirCarbon Exchange (Singapore)
• Climate Impact X (Singapore)

Intercontinental Exchange (ICE) (USA): Since launch, ICE has traded approximately 166 billion compliance allowances and 6 billion carbon credits, with a record year in 2023 trading an equivalent of US$1 trillion in environmental contracts. ICE’s carbon futures are indexed across the four most active carbon systems—including EU ETS, California CCA, UK ETS, and RGGI—enhanced by digital tools supporting over 150 million credit transactions annually.

Xpansiv (USA): As of December 2023, Xpansiv’s CBL spot exchange processed a single-day high of 2.13 million tCO₂e, and its cumulative traded volume since 2020 surpassed 300 million tCO₂e. In November 2024, nature-based credits trading on Xpansiv nearly doubled month‑over‑month, with 600,000 tCO₂e exchanged under N‑GEO contracts.

Investment Analysis and Opportunities

The carbon credit trading market has seen rapid capital deployment across compliance and voluntary sectors. In 2023, over 5.7 billion emission allowances were issued globally under compliance markets like the EU ETS, California CCA, UK ETS, and China ETS. Investment in digital infrastructure has significantly grown, with over 60 operational platforms supporting real-time carbon credit transactions, MRV automation, and registry systems. In voluntary markets, nature-based and energy efficiency projects attracted over US$1 billion in capital. These projects generated approximately 160 million credits in 2023 alone, with strong interest from corporates looking to meet net-zero targets. Notably, digital marketplaces processed over 150 million voluntary carbon transactions during the same period. Project developers in Africa, Asia, and Latin America raised significant funding for afforestation, reforestation, and REDD+ programs covering over 600 million hectares. Digital MRV (Monitoring, Reporting, Verification) tools have shortened issuance timelines by over 70%, allowing projects to bring verified credits to market within 90 days, compared to traditional periods exceeding 300 days. Investment in blockchain-based registries and smart contract platforms increased, with over 25 platforms offering tokenized carbon credits in 2024. The integration of carbon credits into ESG funds and carbon-backed financial instruments has led to the creation of credit-linked bonds and carbon-tracked ETFs, expanding investment opportunities. Forecasts indicate potential growth in cross-border compliance trading as countries align under Article 6 of the Paris Agreement, opening multi-billion-dollar bilateral investment windows.

New Product Development

Innovation in the carbon credit market is centered on standardization, digitization, and diversification of carbon instruments. In 2024, major exchanges introduced new classes of carbon contracts tailored to specific project types, including nature-based credits, tech-based removals, and industrial reduction credits. Over 12 new derivatives contracts were introduced globally, tracking market-verified carbon projects. Tokenized carbon assets gained momentum, with over 30 million tCO₂e transacted via blockchain by mid-2024. Tokenization has enabled fractional ownership, broader market access, and improved transparency in trade flows. Platforms offering smart-contract execution for credit verification have reduced fraud risks and increased issuer accountability. CORSIA-compliant aviation credits became standardized and tradeable across several platforms, supporting airlines in offsetting emissions through projects aligned with ICAO frameworks. Trading volume for these credits exceeded 95 million tCO₂e in 2024. Developers also launched hybrid contracts that combine environmental co-benefits—such as biodiversity or community development—with carbon credits. More than 100 projects offered bundled value contracts in 2023–2024, enabling buyers to align carbon offsets with SDGs. Project aggregators began issuing multi-jurisdictional portfolios, bundling forest conservation, mangrove restoration, and energy transition credits from multiple continents. These developments cater to corporates with global sustainability commitments and help mitigate location-specific risk.

Five Recent Developments

• Intercontinental Exchange (ICE) recorded its highest annual volume of carbon allowance trades in 2023, exceeding 165 billion allowances transacted across all major compliance schemes globally.
• A voluntary market platform surpassed 300 million tCO₂e in cumulative traded volume by Q4 2024, marking a significant milestone in the digitization of voluntary carbon trading.
• Nature-based credit transactions doubled between October and November 2024, reaching a monthly high of 600,000 tCO₂e, indicating increased demand for forestry-based offsets.
• The European Union’s ETS conducted over 520 auctions in 2023, offering more than 5.2 billion tCO₂e allowances, reflecting the bloc’s aggressive decarbonization roadmap.
• CORSIA-compliant carbon credit instruments were launched globally, supporting the aviation industry in offsetting over 90 million tCO₂e through 2023–2024.

Report Coverage of Carbon Credit Trading Market

This report covers the full scope of the global carbon credit trading market across compliance and voluntary systems. It evaluates more than 75 carbon pricing mechanisms that collectively impact approximately 24% of global GHG emissions. Detailed analysis is provided on market operations in over 50 countries, with emphasis on regional mechanisms such as the EU ETS, California’s Cap-and-Trade, China’s ETS, and the South Korea ETS. The compliance segment includes data on allowance issuance, trading volume, registry infrastructure, auction design, and cross-border credit use. In 2023, over 12 billion tCO₂e were traded in compliance markets globally. Voluntary markets are analyzed by credit types (REDD+, renewable energy, CCS, etc.), transaction volumes (over 160 million tCO₂e in 2023), and corporate procurement behavior. Technology-driven platforms that enable digital MRV, registry management, and tokenization are reviewed in detail, highlighting over 60 platforms operating as of 2024. Market segmentation is also presented by type (voluntary vs. compliance), application (energy, manufacturing, forestry), and trade method (spot, futures, tokenized). The report provides in-depth competitive profiling of major carbon exchanges, registries, and solution providers, covering the operations, transaction volumes, and market share of companies handling over 170 billion tCO₂e combined. It also outlines key policy initiatives, including Article 6 implementations, climate finance frameworks, and multilateral trading pilots. With granular data, this report serves as a comprehensive resource for stakeholders across finance, sustainability, energy, and policy domains seeking to engage in carbon markets with quantitative insight.

Frequently Asked Questions