The global emissions trading market is estimated to be valued at US$334.80 billion in 2023 and is expected to exhibit a CAGR of 24% over the forecast period of 2023-2030, as highlighted in a new report published by Coherent Market Insights.
A) Market Overview:
The emissions trading market involves the buying and selling of carbon emissions allowances between companies, aiming to reduce overall greenhouse gas emissions. This market offers a viable solution for corporations to meet regulatory requirements and reduce their carbon footprints. Emissions trading provides numerous advantages, including cost-effectiveness, flexibility, and incentivizing companies to adopt cleaner technologies. With the increasing focus on environmental sustainability and the urgent need to combat climate change, the demand for emissions trading is expected to surge across various industries.
B) Market Key Trends:
One key trend observed in the emissions trading market is the implementation of carbon pricing policies by governments worldwide. Many countries and regions have introduced carbon pricing mechanisms such as cap-and-trade systems and carbon taxes to encourage emission reduction activities. These policies create a market-based approach for companies to comply with emission reduction targets and incentivize them to invest in clean technologies. The adoption of carbon pricing measures is expected to drive the growth of the emissions trading market globally.
The emissions trading market can be segmented based on the type of emission (carbon dioxide, methane, nitrous oxide, etc.), the end-user industry (power generation, manufacturing, transportation, etc.), and the region. Among these segments, the carbon dioxide emissions segment holds the largest share in the market due to the extensive use of fossil fuels in power generation and industrial processes. Carbon dioxide emissions are the major contributor to greenhouse gas emissions, leading to global warming and climate change. As a result, governments worldwide are implementing emissions trading programs to regulate and reduce carbon dioxide emissions.
The global emissions trading market is expected to witness rapid growth, exhibiting a CAGR of 24% over the forecast period (2023-2030). This growth can be attributed to several factors. Firstly, the increasing awareness about climate change and the need to reduce greenhouse gas emissions is driving governments and organizations to adopt emissions trading schemes. This is leading to the expansion of the emissions trading market.
Regionally, Asia Pacific is the fastest-growing and dominating region in the emissions trading market. This can be attributed to the significant greenhouse gas emissions from countries like China and India, coupled with the implementation of emissions reduction targets by these countries. Additionally, the availability of low-cost carbon offsets in some Asian economies is also fueling the growth of the emissions trading market in the region.
The key players operating in the emissions trading market include BP Plc, Royal Dutch Shell Plc, Total SE, Chevron Corporation, ExxonMobil Corporation, Engie SA, RWE AG, ON SE, Vattenfall AB, Gazprom, Mitsubishi UFJ Financial Group (MUFG), JPMorgan Chase & Co., Goldman Sachs Group, Inc., Citigroup Inc., and Barclays PLC. These companies are actively involved in emissions trading, providing carbon credits, and facilitating carbon trading transactions. Their expertise and strong market presence contribute to the growth and development of the emissions trading market.
In conclusion, the emissions trading market is witnessing significant growth due to the increasing awareness about climate change and the need to reduce greenhouse gas emissions. The dominant segment in the market is carbon dioxide emissions, and Asia Pacific is the fastest-growing region. The key players in the market play a crucial role in facilitating emissions trading transactions and providing carbon credits.