The carbon offset market is experiencing explosive growth that demands attention from executives, investors, and technology leaders alike. According to MarketsandMarkets, the global carbon offset market will surge from $414.8 billion in 2023 to $1,602.7 billion by 2028, at a 31.0% compound annual growth rate that nearly quadruples the market in five years.
The Voluntary Advantage
The MarketsandMarkets analysis reveals that voluntary carbon markets operating outside regulatory mandates will be the fastest-growing segment. As transparency improves around credit quality, companies are entering the market proactively rather than through compliance obligations. This shift signals a fundamental change in how businesses approach decarbonization.
Market Leaders and Regional Hotspots
The power sector dominates as the largest end-user segment, driven by high emissions and commercially available low-greenhouse gas technologies. Transportation follows as the fastest-growing segment, fueled by electric vehicle adoption and sector-wide emission reductions.
Geographically, Asia Pacific is projected as the fastest-growing region between 2023 and 2028, according to the MarketsandMarkets forecast. China’s emissions trading system positions the region for rapid expansion. Europe maintains the largest market share, anchored by the EU ETS, the world’s premier emissions trading system.
Unexpected Benefits
Developing nations are leveraging carbon credits for dual benefits. The MarketsandMarkets report carbon offset market highlights how countries earn revenues from selling offsets, which finance development projects for impoverished communities while advancing climate goals.