In accordance with relevant regulations and standards, the holder of a voluntary carbon credit (VCC) certifies that they have either directly or indirectly reduced or removed one metric tonne of carbon dioxide equivalent from the atmosphere. Generally chosen by the pertinent parties as a way to offset emissions and assist in reaching net-zero emission targets, VCCs are normally established outside of any regulatory or compliance framework.
Global Voluntary Carbon Credit Market Driving Factors and Challenges
Reforestation, afforestation, and sustainable land management initiatives are examples of the growing need for nature-based solutions that are becoming more and more popular in the market. Along with providing co-benefits including ecosystem restoration and biodiversity conservation, these projects sequester carbon. Furthermore, the trade of carbon credits is becoming more transparent and traceable because to technological improvements, especially in the areas of blockchain and data analytics.
Specifically, blockchain is being utilised to produce irreversible carbon credit records, lowering the possibility of fraud or duplicate counting and improving the business perspective. Because investors and consumers place a premium on the social and environmental impact of carbon credit projects, rising social and environmental impact combined with more government laws and regulations will spur business expansion in the upcoming years. Initiatives that benefit society and the environment more broadly are getting more support and funding. The voluntary carbon credit market is also still being shaped by laws, policies, and incentives from the government. Supply and demand dynamics can be significantly impacted by the implementation of new laws and regulations.
The market faces a number of significant obstacles, one of which is the price volatility of carbon credits, which varies based on supply and demand. Because of this, it may be difficult for businesses to create long-term plans and to guarantee that the cost of carbon credits offers a strong enough financial incentive for reducing emissions. Restrictive issues also include the high initial investment cost and the lack of planning needed to launch new market mechanisms. Businesses are unable to voluntarily use carbon offsetting technologies due to the exorbitant investment prices. It is expected that these issues will limit and hinder market expansion.
Impact of COVID-19 on Global Voluntary Carbon Credit Market
The voluntary carbon credit sector faced obstacles as well as possibilities as a result of the COVID-19 epidemic. Demand-side dynamics were impacted by shifting business priorities and increased sustainability consciousness, whilst supply-side disruptions had an impact on the creation and verification of carbon credits. How businesses and consumers handle the post-pandemic environment and whether sustainability is a top priority in recovery efforts will determine the market's long-term effects.
Voluntary Carbon Credit Market Key Players:
The market study provides market data by competitive landscape, revenue analysis, market segments and detailed analysis of key market players such as; 3Degrees, ALLCOT, Atmosfair, CarbonClear, Climate Impact Partners, ClimeCo LLC., EcoAct, Ecosecurities, Microsoft, PwC, Shell, South Pole, TerraPass, The Carbon Collective Company, The Carbon Trust, VERRA, Others.
Global Voluntary Carbon Credit Market Segmentation:
By End User: Based on the End User, Global Voluntary Carbon Credit Market is segmented as; Agriculture, Carbon Capture & Storage, Chemical Process, Forestry and Land Use, Household and Community, Industrial and Commercial, Renewable Energy, Transportation, Waste Management.
By Region: This research also includes data for North America, Asia-Pacific, Latin America, Middle East & Africa and Europe.
This study also encompasses various drivers and restraining factors of this market for the forecast period. Various growth opportunities are also discussed in the report.