Carbon Credit Trading in 2025: How Market Forces, Regulation, and Digital Innovation Are Reshaping the Global Carbon Economy. Discover What’s Next for Investors, Corporates, and the Planet.
- Executive Summary: Key Trends and Market Outlook (2025–2029)
- Global Market Size, Growth Rate, and Forecasts (2025–2029)
- Regulatory Landscape: Evolving Policies and Compliance Drivers
- Major Players and Ecosystem Overview
- Technological Innovations: Blockchain, MRV, and Digital Platforms
- Voluntary vs. Compliance Markets: Dynamics and Opportunities
- Regional Analysis: North America, Europe, Asia-Pacific, and Emerging Markets
- Corporate Demand and Net Zero Commitments
- Risks, Challenges, and Market Integrity
- Future Outlook: Growth Projections, Disruptive Trends, and Strategic Recommendations
- Sources & References
Executive Summary: Key Trends and Market Outlook (2025–2029)
The carbon credit trading market is poised for significant transformation and expansion between 2025 and 2029, driven by tightening global climate policies, increased corporate net-zero commitments, and evolving regulatory frameworks. As governments and industries intensify efforts to meet the Paris Agreement targets, the demand for high-quality carbon credits is expected to surge, with both compliance and voluntary markets experiencing robust growth.
In 2025, the implementation of Article 6 of the Paris Agreement is anticipated to provide greater clarity and standardization for international carbon markets, facilitating cross-border trading and reducing the risk of double counting. This regulatory advancement is expected to boost confidence among market participants and attract new entrants, including financial institutions and technology providers. Major exchanges such as Intercontinental Exchange and CME Group are expanding their carbon credit offerings, providing increased liquidity and transparency for market participants.
The voluntary carbon market is also undergoing rapid evolution, with leading registries like Verra and Gold Standard Foundation enhancing methodologies and verification processes to ensure the environmental integrity of credits. These organizations are collaborating with industry bodies to develop new standards for emerging project types, such as carbon removal and nature-based solutions, which are expected to account for a growing share of traded credits by 2029.
Corporate demand remains a key driver, as companies across sectors—including energy, aviation, and consumer goods—commit to science-based targets and seek to offset residual emissions. Notably, firms like Shell and Microsoft have announced large-scale purchases of carbon credits to support their decarbonization strategies. This trend is likely to accelerate as more organizations face regulatory and reputational pressures to demonstrate climate action.
Technological innovation is reshaping the market landscape, with blockchain-based platforms and digital MRV (monitoring, reporting, and verification) tools improving traceability and reducing transaction costs. Companies such as IBM are investing in digital infrastructure to support secure and efficient carbon credit transactions.
Looking ahead to 2029, the carbon credit trading market is expected to become more integrated, transparent, and liquid, with a growing emphasis on credit quality and co-benefits such as biodiversity and community development. The convergence of compliance and voluntary markets, coupled with increased regulatory oversight, will likely drive further standardization and scale, positioning carbon credit trading as a central pillar of global climate finance.
Global Market Size, Growth Rate, and Forecasts (2025–2029)
The global carbon credit trading market is poised for significant expansion between 2025 and 2029, driven by tightening climate policies, increased corporate net-zero commitments, and the evolution of both compliance and voluntary carbon markets. As of 2025, the total value of traded carbon credits—across both compliance and voluntary schemes—continues to rise, with the European Union Emissions Trading System (EU ETS) remaining the largest and most liquid market. In 2023, the EU ETS alone saw a traded value exceeding €800 billion, and this figure is expected to grow as the system expands to cover additional sectors and as the cap on emissions tightens further through 2030 (European Energy Exchange).
Other major compliance markets, such as the California Cap-and-Trade Program and the Regional Greenhouse Gas Initiative (RGGI) in the United States, are also scaling up. California’s program, administered by the California Air Resources Board, is expected to see increased trading volumes as the state pursues more ambitious emissions reduction targets. Meanwhile, China’s national Emissions Trading System, launched in 2021 and currently focused on the power sector, is anticipated to expand to additional industries by 2025, potentially making it the world’s largest carbon market by coverage (China National Energy Conservation Center).
The voluntary carbon market (VCM) is also experiencing rapid growth, fueled by corporate demand for high-quality offsets to meet net-zero pledges. Leading registries such as Verra and Gold Standard Foundation report record issuances and retirements of credits, with the VCM’s value projected to reach several tens of billions of dollars by the late 2020s. The emergence of new digital trading platforms and exchanges, such as AirCarbon Exchange and Climate Impact X, is expected to further enhance market liquidity and transparency.
Looking ahead to 2029, the global carbon credit trading market is forecast to maintain a robust compound annual growth rate (CAGR), underpinned by the expansion of compliance markets, the integration of Article 6 mechanisms under the Paris Agreement, and increasing scrutiny on credit quality and integrity. The market’s trajectory will also be shaped by regulatory developments, technological innovation in monitoring and verification, and the growing participation of financial institutions and corporates. As a result, carbon credit trading is set to play an increasingly central role in global decarbonization efforts over the next five years.
Regulatory Landscape: Evolving Policies and Compliance Drivers
The regulatory landscape for carbon credit trading is undergoing significant transformation in 2025, driven by tightening climate commitments and the need for robust compliance mechanisms. Governments and international bodies are increasingly aligning carbon markets with the goals of the Paris Agreement, aiming to limit global warming to well below 2°C. The implementation of Article 6 of the Paris Agreement, which establishes a framework for international carbon markets, is a pivotal development. This framework enables countries to trade emissions reductions through Internationally Transferred Mitigation Outcomes (ITMOs), fostering cross-border collaboration and standardization.
In the European Union, the European Commission continues to strengthen the EU Emissions Trading System (EU ETS), the world’s largest carbon market. The recent “Fit for 55” package, which targets a 55% reduction in greenhouse gas emissions by 2030, has led to the inclusion of new sectors such as maritime transport and a gradual reduction in free allowances. The EU is also advancing the Carbon Border Adjustment Mechanism (CBAM), which will require importers to pay for the carbon content of certain goods, further incentivizing global compliance.
In North America, the California Air Resources Board (CARB) oversees one of the most established cap-and-trade programs, which is now being reviewed for potential expansion and stricter caps post-2025. Canada’s federal carbon pricing system, administered by Environment and Climate Change Canada, is also evolving, with plans to increase the carbon price annually through 2030 and to enhance the integrity of offset credits.
Asia-Pacific markets are rapidly maturing. China’s national Emissions Trading System, managed by the Ministry of Ecology and Environment of the People’s Republic of China, is expanding beyond the power sector to include additional industries such as cement and aluminum. This expansion is expected to significantly increase the volume and liquidity of carbon credits traded in the region.
On the voluntary market, organizations such as Verra and Gold Standard Foundation are working to harmonize standards and improve transparency, responding to growing scrutiny over the quality and additionality of credits. The Integrity Council for the Voluntary Carbon Market (ICVCM) is also developing a global benchmark for high-integrity credits, which is anticipated to influence both voluntary and compliance markets.
Looking ahead, regulatory convergence and digitalization—such as the use of blockchain for tracking credits—are expected to enhance market confidence and participation. As more jurisdictions implement or tighten carbon trading schemes, companies will face increasing pressure to comply, driving demand for high-quality credits and innovative compliance solutions.
Major Players and Ecosystem Overview
The carbon credit trading ecosystem in 2025 is characterized by a diverse array of participants, including project developers, registries, exchanges, corporates, and regulatory bodies. The market is split between compliance-driven schemes—such as the European Union Emissions Trading System (EU ETS)—and voluntary carbon markets, which have seen rapid growth as companies pursue net-zero commitments.
Among the most influential entities is the Shell, which is both a major buyer and developer of carbon credits, investing in nature-based solutions and technology-driven projects. BP and TotalEnergies are similarly active, integrating carbon credits into their decarbonization strategies and supporting the development of new projects globally.
On the infrastructure side, registries such as Gold Standard and Verra play a critical role by certifying and issuing credits, ensuring environmental integrity and transparency. These organizations set methodologies and standards that underpin the credibility of the voluntary carbon market. The International Air Transport Association (IATA) also operates a registry tailored to the aviation sector, supporting compliance with the CORSIA scheme.
Trading platforms and exchanges are central to market liquidity and price discovery. The Intercontinental Exchange (ICE) and CME Group offer futures and spot trading for carbon allowances and credits, facilitating participation from institutional investors and corporates. The European Energy Exchange (EEX) is a leading venue for EU ETS allowances, while emerging digital platforms such as AirCarbon Exchange are pioneering blockchain-based trading for voluntary credits.
Corporates from sectors such as technology, aviation, and consumer goods—including Microsoft and Delta Air Lines—are major buyers, using credits to offset emissions and meet sustainability targets. These companies often partner directly with project developers or invest in new carbon removal technologies.
Looking ahead, the ecosystem is expected to evolve rapidly. Regulatory harmonization, such as the implementation of Article 6 of the Paris Agreement, will likely drive greater standardization and cross-border trading. The entry of new players, including financial institutions and technology providers, is anticipated to boost market depth and innovation. As scrutiny on credit quality intensifies, the role of independent standards bodies and transparent registries will become even more pivotal in shaping the credibility and growth of carbon credit trading.
Technological Innovations: Blockchain, MRV, and Digital Platforms
The landscape of carbon credit trading is undergoing rapid transformation in 2025, driven by technological innovations that enhance transparency, efficiency, and trust. Three key areas—blockchain, MRV (Measurement, Reporting, and Verification), and digital trading platforms—are at the forefront of this evolution.
Blockchain technology is increasingly being adopted to address persistent challenges in carbon markets, such as double counting, lack of traceability, and fraud. By providing immutable, transparent records of credit issuance and retirement, blockchain platforms are streamlining the lifecycle of carbon credits. IBM has been a pioneer in this space, collaborating with partners to develop blockchain-based carbon registries that ensure the provenance and authenticity of credits. Similarly, Shell has invested in blockchain solutions to track carbon offsets, aiming to bolster confidence among buyers and regulators.
MRV systems are also seeing significant technological upgrades. Traditional MRV processes have been criticized for being slow, costly, and prone to human error. In response, companies are deploying advanced remote sensing, satellite imagery, and AI-driven analytics to automate and standardize data collection and verification. Verra, one of the world’s leading carbon standards organizations, is piloting digital MRV tools to improve the accuracy and timeliness of emissions data. These innovations are expected to reduce transaction costs and accelerate the issuance of high-quality credits.
Digital trading platforms are centralizing and democratizing access to carbon markets. Platforms such as AirCarbon Exchange and Climate Impact X are leveraging digital infrastructure to connect buyers and sellers globally, offering real-time pricing, standardized contracts, and integrated MRV solutions. These platforms are also integrating with blockchain and digital MRV systems, creating end-to-end digital ecosystems for carbon credit trading.
Looking ahead, the convergence of these technologies is expected to drive further growth and integrity in carbon markets. As regulatory scrutiny increases and corporate demand for credible offsets rises, the adoption of blockchain, advanced MRV, and digital platforms is likely to become standard practice. Industry bodies such as Institute of International Finance are advocating for interoperability and common standards to ensure that technological innovation translates into real climate impact. The next few years will likely see continued investment and collaboration among technology providers, standards organizations, and market participants to build a robust, transparent, and scalable carbon trading ecosystem.
Voluntary vs. Compliance Markets: Dynamics and Opportunities
The landscape of carbon credit trading in 2025 is defined by the interplay between voluntary and compliance markets, each with distinct drivers, participants, and regulatory frameworks. Compliance markets are established by mandatory national, regional, or international regulations that require entities to offset emissions, while voluntary markets allow companies, organizations, and individuals to purchase credits to meet self-imposed climate goals or demonstrate corporate responsibility.
Compliance markets remain the largest segment by volume and value, anchored by schemes such as the European Union Emissions Trading System (EU ETS), the California Cap-and-Trade Program, and China’s national Emissions Trading Scheme. The European Commission continues to expand the EU ETS, now covering more sectors and tightening the cap on emissions allowances. In 2024, the EU ETS price per metric ton of CO2 hovered around €80–€100, with expectations of further increases as the cap declines and the Carbon Border Adjustment Mechanism (CBAM) is phased in. China’s ETS, launched in 2021 and now the world’s largest by volume, is expected to broaden its sectoral coverage and improve data transparency through 2025, according to China Carbon Forum.
Voluntary carbon markets (VCMs) have seen rapid growth, driven by corporate net-zero pledges and increasing scrutiny of supply chain emissions. Major registries such as Verra and Gold Standard Foundation have reported record issuances and retirements of credits in 2023–2024, with the market value estimated to surpass $2 billion in 2025. However, the VCM faces challenges around credit quality, additionality, and double counting. In response, industry-led initiatives like the Integrity Council for the Voluntary Carbon Market (ICVCM) are working to establish global standards and boost market confidence.
The dynamics between the two markets are evolving. Some jurisdictions are exploring the integration of high-quality voluntary credits into compliance systems, while others are tightening rules to prevent overlap. For example, the United Nations Framework Convention on Climate Change (UNFCCC) is finalizing Article 6 mechanisms under the Paris Agreement, which could allow for international transfer of mitigation outcomes (ITMOs) and create new linkages between voluntary and compliance markets.
Looking ahead, the outlook for both markets is robust. Compliance markets are expected to expand geographically and in scope, while voluntary markets will likely see consolidation, increased transparency, and higher demand for credits with strong co-benefits (such as biodiversity or community impact). The interplay between these markets will shape the global carbon trading ecosystem, offering both challenges and opportunities for participants seeking to navigate the transition to a low-carbon economy.
Regional Analysis: North America, Europe, Asia-Pacific, and Emerging Markets
The global carbon credit trading landscape is evolving rapidly, with distinct regional dynamics shaping market growth and regulatory frameworks. As of 2025, North America, Europe, Asia-Pacific, and emerging markets are each charting unique paths in carbon credit trading, influenced by policy developments, corporate participation, and technological innovation.
North America remains a significant player, driven by both compliance and voluntary markets. The California Air Resources Board continues to operate one of the world’s largest cap-and-trade programs, covering major sectors and linking with Quebec’s system. In 2023, the program auctioned over 300 million allowances, with prices steadily rising, reflecting tightening emissions caps. The Intercontinental Exchange (ICE) in the U.S. has expanded its carbon futures offerings, facilitating liquidity and price discovery for North American credits. Corporate demand is also surging, with major companies like Microsoft and Amazon investing in carbon removal and offset projects to meet net-zero commitments.
Europe leads in regulatory sophistication, anchored by the European Energy Exchange (EEX) and the European Union Emissions Trading System (EU ETS). The EU ETS, covering over 10,000 installations, has seen allowance prices exceed €90 per tonne in 2024, spurring investment in low-carbon technologies. The introduction of the Carbon Border Adjustment Mechanism (CBAM) in 2023 is expected to further tighten the market by imposing carbon costs on imports, incentivizing global decarbonization. The UK operates its own emissions trading system post-Brexit, with the London Stock Exchange Group supporting voluntary carbon market infrastructure.
Asia-Pacific is witnessing rapid expansion, led by China’s national Emissions Trading System, which became the world’s largest carbon market by volume in 2021. The China Beijing Environment Exchange facilitates trading for power sector allowances, with plans to expand coverage to additional industries by 2025. South Korea and New Zealand also operate national schemes, while Australia’s Clean Energy Regulator oversees the Australian Carbon Credit Units (ACCUs) market, supporting both compliance and voluntary demand.
Emerging markets are increasingly active, with countries in Latin America and Africa piloting carbon trading initiatives. Brazil’s government is developing a national carbon market, while the International Civil Aviation Organization (ICAO) CORSIA program is driving demand for offsets from developing regions. These markets are expected to grow as international finance and technology transfer accelerate, supported by global climate agreements and private sector investment.
Looking ahead, regional integration, digital platforms, and robust verification standards are likely to enhance transparency and scalability in carbon credit trading, positioning these regions for continued growth and innovation through 2025 and beyond.
Corporate Demand and Net Zero Commitments
Corporate demand for carbon credits is intensifying as companies accelerate their net zero commitments, with 2025 marking a pivotal year for voluntary carbon markets. Major corporations across sectors—energy, technology, consumer goods, and finance—are increasingly leveraging carbon credit trading to offset residual emissions and meet ambitious climate targets. This trend is driven by both regulatory pressures and stakeholder expectations for credible climate action.
A significant number of Fortune 500 companies have pledged to achieve net zero emissions by 2030 or 2050, and many are turning to carbon credits as a flexible tool to address hard-to-abate emissions. For example, Shell has committed to becoming a net zero energy business by 2050, utilizing carbon credits to offset emissions from its operations and products. Similarly, Microsoft has pledged to be carbon negative by 2030, investing in high-quality carbon removal credits as part of its broader decarbonization strategy.
The demand surge is reflected in the growing volume and value of traded credits. According to industry data, the voluntary carbon market surpassed $2 billion in value in 2023, with projections indicating continued growth through 2025 and beyond as more companies seek to fulfill their net zero commitments. The market is also witnessing increased sophistication, with buyers prioritizing credits from projects that deliver verified, additional, and permanent emissions reductions or removals.
Leading carbon credit suppliers and project developers, such as Verra and Gold Standard Foundation, are responding by enhancing verification standards and transparency. These organizations play a critical role in ensuring the environmental integrity of credits, which is essential for maintaining corporate and public trust in carbon offsetting as a climate solution.
Looking ahead, the outlook for carbon credit trading is shaped by evolving regulatory frameworks and the integration of carbon markets into national and international climate policies. The implementation of Article 6 of the Paris Agreement is expected to further legitimize and expand cross-border carbon trading, providing new opportunities for corporates to access high-quality credits. At the same time, scrutiny over the credibility of offsets is likely to intensify, prompting companies to adopt more rigorous due diligence and reporting practices.
In summary, 2025 is set to be a defining year for corporate engagement in carbon credit trading, with demand driven by net zero commitments, evolving standards, and the maturation of global carbon markets. Companies that proactively engage with credible suppliers and transparent trading platforms will be best positioned to meet their climate goals and stakeholder expectations.
Risks, Challenges, and Market Integrity
The carbon credit trading market, while pivotal in global decarbonization efforts, faces significant risks and challenges that threaten its integrity and effectiveness as of 2025 and looking ahead. One of the foremost concerns is the issue of “double counting,” where the same emissions reduction is claimed by multiple parties, undermining the credibility of the system. This risk is particularly acute in voluntary carbon markets, where oversight can be fragmented and standards vary widely. Organizations such as Verra and Gold Standard Foundation have responded by tightening verification protocols and introducing digital tracking systems, but implementation across all jurisdictions remains inconsistent.
Another challenge is the proliferation of low-quality or non-additional credits—projects that would have occurred regardless of carbon finance, or that overstate their climate benefits. This has led to growing scrutiny from buyers and regulators. In 2023 and 2024, several high-profile investigations revealed that some forestry and renewable energy projects failed to deliver the promised emissions reductions, prompting companies such as Shell and BP to review their offset portfolios and demand higher standards from project developers.
Market manipulation and lack of transparency also pose risks. The absence of a unified global registry and standardized reporting makes it difficult to track the origin and ownership of credits, increasing the potential for fraud. In response, industry bodies like the Institute of International Finance and the Integrity Council for the Voluntary Carbon Market are working to establish core carbon principles and promote interoperability between registries. These efforts aim to enhance trust and facilitate cross-border trading, but widespread adoption is still in progress.
Regulatory uncertainty remains a persistent challenge. While the Article 6 rules under the Paris Agreement are gradually being operationalized, many countries are still developing their own frameworks for carbon trading. This patchwork of regulations can create confusion for market participants and slow the scaling of high-integrity markets. Companies such as AirCarbon Exchange and CBL Markets are investing in digital platforms to streamline transactions and improve traceability, but the effectiveness of these solutions depends on regulatory alignment.
Looking forward, the outlook for carbon credit trading hinges on the sector’s ability to address these integrity risks. The next few years will likely see increased collaboration between standard-setters, governments, and market operators to harmonize rules, enhance transparency, and ensure that carbon credits represent real, verifiable climate action. Success in these areas is critical for maintaining market confidence and scaling carbon trading as a tool for global emissions reduction.
Future Outlook: Growth Projections, Disruptive Trends, and Strategic Recommendations
The carbon credit trading market is poised for significant transformation and expansion through 2025 and the following years, driven by tightening climate regulations, corporate net-zero commitments, and technological innovation. The global voluntary carbon market (VCM) is expected to see robust growth as more companies seek to offset emissions and comply with emerging disclosure requirements. Major industry players, such as Shell and BP, have announced ambitious decarbonization strategies, including large-scale participation in carbon credit markets to meet their climate targets.
In 2025, the implementation of Article 6 of the Paris Agreement is anticipated to provide clearer international frameworks for cross-border carbon credit trading, potentially unlocking new liquidity and standardization. The International Emissions Trading Association (IETA) is actively working with governments and market participants to ensure the integrity and scalability of these mechanisms. Meanwhile, the Integrity Council for the Voluntary Carbon Market (ICVCM) is finalizing its Core Carbon Principles, which are expected to become a benchmark for high-quality credits and boost market confidence.
Technological advancements are also set to disrupt the sector. Blockchain-based platforms, such as those developed by IBM and Shell, are being piloted to enhance transparency, traceability, and reduce transaction costs in carbon credit issuance and trading. Digital Measurement, Reporting, and Verification (dMRV) tools are being adopted to improve the accuracy and credibility of carbon offset projects, with companies like Verra integrating such technologies into their standards.
Looking ahead, the market is expected to face both opportunities and challenges. On the opportunity side, the expansion of compliance markets in regions such as Asia-Pacific and Latin America, and the growing participation of sectors like aviation and shipping, are likely to drive demand. However, concerns over greenwashing and the need for harmonized standards remain. Organizations such as Gold Standard and Verra are responding by tightening project validation and verification requirements.
- Strategic Recommendations: Market participants should invest in digital infrastructure to streamline credit tracking and reporting, prioritize high-integrity credits aligned with emerging standards, and engage proactively with regulatory developments. Collaboration with established registries and technology providers will be crucial for scaling operations and maintaining credibility in a rapidly evolving landscape.
Sources & References
- Intercontinental Exchange
- CME Group
- Verra
- Gold Standard Foundation
- Shell
- Microsoft
- IBM
- European Energy Exchange
- California Air Resources Board
- AirCarbon Exchange
- European Commission
- Environment and Climate Change Canada
- Ministry of Ecology and Environment of the People’s Republic of China
- Gold Standard Foundation
- BP
- TotalEnergies
- Verra
- International Air Transport Association (IATA)
- Delta Air Lines
- IBM
- Shell
- AirCarbon Exchange
- Institute of International Finance
- United Nations Framework Convention on Climate Change
- California Air Resources Board
- Amazon
- London Stock Exchange Group
- Clean Energy Regulator
- International Civil Aviation Organization
- Microsoft
- IETA