Forestry & Landuse Carbon Credit Market Size & Share, by Type (Voluntary, Compliance) - Global Supply & Demand Analysis, Growth Forecasts, Statistics Report 2024-2036

  • Report ID: 5996
  • Published Date: Apr 04, 2024
  • Report Format: PDF, PPT

Global Market Size, Forecast, and Trend Highlights Over 2024-2036

Forestry & Landuse Carbon Credit Market size is expected to reach USD 67 billion by the end of 2036, growing at a CAGR of 14% during the forecast period, i.e., 2024-2036. In the year 2023, the industry size of forestry & landuse carbon credit was close to USD 23 billion. This growth of the revenue in the market is poised to be encouraged by the growing prevalence of deforestation. Grass deforestation in the world reached over 6 million hectares and the situation in tropical forests is set to be worse where Denmark-sized land has been lost. As a result, the demand for forestry & landuse carbon credit is predicted to rise.

Furthermore, strict regulations have been launched by regulatory bodies which is further influencing the organizations to understand their responsibility towards the environment and additionally boosting their desire to increase environmental credentials. They are achieving this by purchasing carbon credits hence displaying their commitment towards sustainability. Therefore, this element is also poised to encourage the market expansion for forestry & landuse carbon credit over the years to come.


Forestry Landuse Carbon Credit Market
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Forestry & Landuse Carbon Credit Sector: Growth Drivers and Challenges

Growth Drivers

  • Growing Emission of Carbon Dioxide - Carbon dioxide emissions in the world from industry and fossil fuels increased to 36 billion metric tons (GtCOâ‚‚) in the year 2022. Emissions are estimated to have boosted by over 2 percent in 2023 to reach a record high of approximately 37 GtCOâ‚‚. Since 1990, COâ‚‚ emissions globally have risen by about 59 percent. As a result, the need to plant more trees is growing. With the growth in trees, the prevalence of climate change is reduced significantly and this takes place by limiting carbon dioxide from the air, further collecting carbon in the trees and soil, and discharging oxygen into the atmosphere. Therefore, the forestry & landuse carbon credit market is set to rise in the world.
  • Rising Advancement in Technology - The advancement in technology is playing a significant role in various end-user industries. Further, its importance is also rising in forestry & landuse carbon credit market. Various technologies including satellite imaging, blockchain, and machine learning are being deployed in this field in order to influence monitoring, reporting, and verification. More accurate, and translucent data is offered by this enhanced technology for further highlighting concern regarding the legitimacy of carbon offset projects. These technology advancements along with fostering trust among market players facilitate the scaling up of projects. As a result, the market for forestry & landuse carbon credit is poised to be encouraged.
  • Improve Financial Attractiveness by Selling Forestry & Landuse Carbon Credit - Forestry projects aim to improve the financial attractiveness and justify larger expenditures by selling carbon offsets. These may be earned in forest-related projects, including enhanced management of forests with reduced-impact logging, tree-planting, and reduced deforestation. After third-party confirmation carbon credits are issued into registries to evaluate baseline setting, additionality, leakage, emissions monitoring, and permanence. The impact of such projects differs largely, contingent on the type of project. A funding source for projects is constituted by carbon credits that may not be executed any other way and hence have the possibility to produce manifold benefits.

Challenges

  • Lack of Awareness Among End-Users - A large number of end-user industries are still unaware of the benefits of forestry & landuse carbon credit. Hence, its adoption is relatively low. Therefore, the forestry & landuse carbon credit market is set to be hindered.
  • Large False Data Regarding Emission - Large number of countries across the world underreport their greenhouse gas emissions data. The aim to protect the globe from the prevalence of climate change is built on data. However, the data the globe is depending on is erroneous. Also, the companies provide false data to the authorities to gain the clean cheat for their operation in the environment. As a result, this is further predicted to restrain the adoption of forestry & landuse carbon credit.
  • Require High Investment

Forestry & Landuse Carbon Credit Market: Key Insights

Base Year

2023

Forecast Year

2024-2036

CAGR

~8.30%

Base Year Market Size (2023)

~ USD 23 Billion

Forecast Year Market Size (2036)

~ USD 67 Billion

Regional Scope

  • North America (U.S., and Canada)
  • Latin America (Mexico, Argentina, Rest of Latin America)
  • Asia-Pacific (Japan, China, India, Indonesia, Malaysia, Australia, Rest of Asia-Pacific)
  • Europe (U.K., Germany, France, Italy, Spain, Russia, NORDIC, Rest of Europe)
  • Middle East and Africa (Israel, GCC North Africa, South Africa, Rest of the Middle East and Africa)
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Forestry & Landuse Carbon Credit Segmentation

Type (Voluntary, Compliance)

The voluntary segment is predicted to account for 60% share of the global forestry & landuse carbon credit market during the forecast period. Similar to the compliance segment, the voluntary segment focuses on influencing the total reduction of emissions. This need is influenced by a growing consciousness regarding the environment. Voluntary carbon credits offer a channel for entities to examine their dedication to sustainability and environmental management further than regulatory requirements. Therefore, as the intensity of awareness about climate change grows, the necessity for voluntary forestry and land use carbon credits rises, further encouraging market revenue to grow.

Type (Voluntary, Compliance)

The compliance segment in the forestry & landuse carbon credit market is also set to have significant growth in the revenue during the forecast period. Compliance markets are developed and operated by mandatory national, regional, or international carbon reduction programs. Generally, commune to as cap-and-trade markets or emission trading systems (ETS), these are markets in businesses within capped sectors, that are required to not exit than their regulated greenhouse gas (GHG) emissions cap. If the emission crosses the cap, the organization must offset by reducing the emissions in order places, with such transactions happening within the compliance market. Moreover, various regulations have been launched by several countries to influence compliance. For instance, regulated entities are presently allowed to offset only over 3% of their emissions under the California Cap-and-Trade Program, to achieve total compliance, and close to 49% of those offset credits should essentially come from projects that benefit California directly.

Our in-depth analysis of the global market includes the following segments:

          Type

  • Voluntary
  • Compliance

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Forestry & Landuse Carbon Credit Industry-Regional Synopsis

North American Market Forecast

The North America market for forestry & landuse carbon credit market is set to generate the highest revenue share of over 35% over the forecast period. This growth of the market is set to be dominated by the growing production of timber production. For instance, the wood industry in the United States of America manufactured over 63,416 thousand m3 of softwood lumber in 2021.  Furthermore, the housing industry is also significantly relying on wood in this region on account of growth in a change in customer preference. As a result, the clearance of forests is rising which is why strict rules have been imposed by the government. Therefore, the adoption of forestry & landuse carbon credit is set to rise in this region. Moreover, this region is also highly prone to wildfire. Consequently, such an event has caused huge damage to the forest. As a result, the need for forestry & landuse carbon credit is predicted to rise in order to initiate reforestation.  

European Market Analysis

The Europe market for forestry & landuse carbon credit is also set to have notable growth in the revenue over the coming years. This growth is set to be dominated by growing urbanization in this region. Urban growth causes the conversion of forests into commercial spaces, and residential areas, along with infrastructure projects, which are becoming a major factor for deforestation. The development of highways, roads, and industrial zones often requires cutting of large swaths of forests, hence influencing habitat loss and fragmentation. Hence, the need for forestry & land carbon credit is growing in this region. Furthermore, the population in this region is becoming aware of the adverse effects of excessive deforestation. As a result, in order to have a reputative presence in the region, organizations are working towards sustainable practices. Therefore, the market for forestry & landuse carbon credit is predicted to observe growth in this region.

Research Nester
Forestry Landuse Carbon Credit Market size
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Companies Dominating the Forestry & Landuse Carbon Credit Landscape

top-features-companies
    • Verra
      • Company Overview
      • Business Strategy
      • Key Product Offerings
      • Financial Performance
      • Key Performance Indicators
      • Risk Analysis
      • Recent Development
      • Regional Presence
      • SWOT Analysis
    • Gold Standard
    • South Pole
    • Climate Impact Partners
    • Forest Carbon
    • EcoAct
    • FORLIANCE GmbH
    • GreenTrees
    • Pachama, Inc.
    • EDP Renewables

In-the-news

In The News

  • India made a valiant move in 2024 by renovating its Carbon Credit Trading Scheme (CCTS), permitting non-obligated entities in order to participate in the tradable carbon credits market. That indicates organization and individuals may voluntarily utilize carbon credits to approach their planet-warming emissions. 
  • Verra connote to develop a long-term monitoring system for the Verified Carbon Standard (VCS) Program to alley possible reversals in AFOLU projects and enhance their non-permanence risk management.

Author Credits:  Payel Roy, Dhruv Bhatia


  • Report ID: 5996
  • Published Date: Apr 04, 2024
  • Report Format: PDF, PPT

Frequently Asked Questions (FAQ)

The major factors driving the growth of the market are growing emission of carbon dioxide, rising advancement in technology, and improve financial attractiveness by selling forestry & landuse carbon credit.

The market size of forestry & landuse carbon credit is anticipated to attain a CAGR of 14% over the forecast period, i.e., 2024-2036.

The major players in the market are Verra, Gold Standard, South Pole, Climate Impact Partners and others.

The voluntary segment is anticipated to garner the largest market size by the end of 2036 and display significant growth opportunities.

The market in the North America region is projected to hold the largest market share by the end of 2035 and provide more business opportunities in the future.
Forestry Landuse Carbon Credit Market Report Scope
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