Carbon Verification Market is Estimated to Witness High Growth Owing to Increasing Adoption of Blockchain Technology
Carbon verification refers to the process of quantifying and validating greenhouse gas (GHG) emission reductions from climate change mitigation projects or initiatives. Carbon offsetting activities such as afforestation projects and renewable energy initiatives typically undergo carbon verification to certify the legitimacy and additionality of the climate impact. The process involves calculating the carbon footprint using standardized methods and then having it independently verified by accredited third parties. Carbon Verification Market Growth provides credibility to carbon credits which can then be traded in compliance or voluntary markets. The global carbon verification market has been gaining substantial traction over the past few years owing to stringent government regulations and growing awareness about corporate social responsibility (CSR) initiatives regarding carbon neutrality pledges among organizations.
The global carbon verification market is estimated to be valued at US$ 12.73 Bn in 2023 and is expected to exhibit a CAGR of 26.% over the forecast period 2023 To 2030.
Key Takeaways
Key players operating in the carbon verification market are DNV GL, SGS SA, Bureau Veritas, TÜV NORD GROUP, Intertek Group plc., Carbon Trust, First Environment, Inc., ERM Certification and Verification Services, NSF International, UL LLC, Cotecna, SCS Global Services, KPMG International Cooperative, Deloitte Touche Tohmatsu Limited, and PwC.
These companies have been actively pursuing initiatives aimed at reducing absolute GHG emissions and offsetting remaining carbon footprints.
The key opportunities in the market include growing focus on internal carbon pricing mechanisms by companies, development of carbon credit trading platforms and regional or national level carbon markets. Various international climate agreements are also boosting demand for credible carbon accounting.
Carbon Verification Market Size and Trends is adoption of blockchain technology is expected to boost transparency and trust in the carbon offset credits ecosystem. Blockchain allows verification of carbon removal and storage claims in a decentralized manner promoting more efficient carbon trading.
Market drivers
Stringent regulations: Mandates towards disclosure of climate-related information and taxation of carbon emissions are driving up demand for carbon accounting and verification services across industries.
Reputation management: Organizations are investing in carbon footprint quantification and validation to strengthen ESG credentials and boost brand value in the eyes of environment-conscious consumers and investors.
Cost savings: Accurate verification of carbon reduction initiatives allows companies to monetize carbon credits thereby lowering costs associated with achieving voluntary or compliance-driven emissions targets.
Carbon Verification Market
Current Challenges in the Market
The process of carbon verification involves maintaining and monitoring detailed records regarding carbon emissions. This leads to increased documentation work which many organizations find challenging. Small businesses and startups may find it difficult to devote adequate resources for carbon accounting and verification. Lack of standardized protocols and methodologies also creates inconsistencies in the verification process. Developing economies face restrictions in terms allocation of funds for carbon offsetting projects.
SWOT Analysis
Strengths: Growing importance of ESG practices is driving more companies to opt for carbon verification. It helps organizations gain a competitive advantage by demonstrating sustainability commitments.
Weaknesses: Carbon accounting is a complex process requiring specialized expertise and tools. High costs involved especially for SMEs.
Opportunities: Expanding carbon markets and emergence of carbon trading schemes present new revenue opportunities. Development of carbon removal technologies will further boost demand.
Threats: Stricter climate regulations may increase compliance burden. Delays in institutionalization of global carbon pricing pose challenges.
Geographical Regions
North America currently accounts for the largest share of the global carbon verification market in terms of value. Stringent climate policies in the US and Canada along with presence of major verification service providers are driving growth.
The Asia Pacific region is expected to witness the fastest growth during the forecast period. Growing carbon markets in China, emerging offset programs in India and climate commitments by regional economies are driving the demand for carbon verification solutions in the Asia Pacific region.
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