Carbon credits value12/28/2023 ![]() ![]() Companies expect organizations such as the Science Based Targets initiative and the Voluntary Carbon Markets Integrity Initiative to have an increasing influence on market trends the emerging guidance of these organizations therefore will likely impact market growth. External organizations are increasingly influencing buyers’ decisions.We found, in fact, that demand for some classes of credit, such as nature-based credits, could soon outstrip supply. Despite greater economic challenges, most respondents think that the volume of emissions compensated through offsets will increase as more companies set net-zero targets. Buyers see spending on carbon credits as nondiscretionary and expect demand to grow.To better understand the impact of current economic headwinds on companies’ carbon-offset purchase strategies, we conducted a worldwide survey of over 200 environmental and sustainability executives across sectors and interviewed over 20 executives in depth. By 2030, the market is expected to reach between $10 billion and $40 billion. In 2021, the voluntary carbon market grew at a record pace, reaching $2 billion-four times its value in 2020-and the pace of purchases is still accelerating in 2022. Removal projects deploy either nature-based solutions such as afforestation (introducing trees to a previously unforested area) or technology-based solutions such as renewable energy generation. An Update on the Voluntary Carbon MarketĬompanies that wish to offset their greenhouse gas emissions can purchase two different types of credits in the voluntary market: avoidance credits for external projects that avoid or reduce emissions production, such as building a wind farm, and removal credits for projects that lower existing emissions. Our global analysis also found that the influence of external organizations on buyers’ decisions is growing that a reputable monitoring, reporting, and verification framework has become a priority when making purchase decisions and that companies continue to monitor developments on Article 6 of the Paris Agreement to adapt their strategy as needed.Īs more companies join the race to net zero, we hope this research will prove useful for those interested in making carbon credits part of their climate and sustainability strategies. These are two of the key insights from BCG’s latest report on the voluntary carbon markets, written in partnership with Shell. And the focus of credit trading is shifting from reducing emissions to removing them altogether. ![]() Technology, Media, and Telecommunicationsĭespite a sluggish economy and ongoing budget pressures, the demand for voluntary carbon-emissions credits is growing rapidly. ![]()
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