June 20, 2024
Emissions Trading Market

Emissions Trading Market Is On The Rise By Growing Carbon Regulations

The emissions trading market involves trading of carbon credits, where each credit permits the emission of one tonne of carbon dioxide or its equivalent greenhouse gas. The credits encourage adoption of renewable and cleaner sources of energy by allowing companies to trade excess credits they generate by adopting greener practices, in lieu of paying regulatory penalties. With growing environmental concerns and stringent carbon regulations being levied globally, demand for carbon trading is on the rise. Key industries like power generation and manufacturing rely on emissions trading credits to comply with emissions targets set in countries like China, Europe and the United States.

The Global Emissions Trading Market is estimated to be valued at US$ 385.69 Bn in 2024 and is expected to exhibit a CAGR of 6.8% over the forecast period 2024 to 2031.

Stringent carbon regulations and the lure of potential cost savings are driving more companies to adopt carbon trading as a viable compliance option. The Emissions Trading Market Demand allows flexibility to companies in meeting emissions goals in a cost effective manner.

Key Takeaways

Key players operating in the emissions trading market are Johnson & Johnson Services, Inc., 3M, Baxter, Coloplast A/S, Integra LifeSciences, Medtronic, Omeza, Cardinal Health, Bactiguard AB, Noventure, Essity, Schulke & Mayr GmbH, Smith & Nephew Plc., Convatec Group PLC, SANUWAVE and SANUWAVE Health, Inc., EO2 Concepts, Wound Care Advantage, LLC., Healthium Medtech Limited, Arch Therapeutics, Inc., Hydrofera, Sanara MedTech Inc., Axio Biosolutions Pvt Ltd., and Gentell, Inc.

The growing demand for carbon credits from industries striving to reduce carbon footprint and meet emissions targets is expected to drive market revenues. Power generation, manufacturing and aviation are some of the major industrial sectors resorting to carbon trading.

Stringent regulations and pressure on companies globally to cut emissions and dependence on fossil fuels have encouraged expansion of Emissions Trading Market into new regions and countries. Establishment of trading platforms and markets in Asia, Africa and South America is expected to boost global market size in the coming years.

Market Key Trends

One of the key trends gaining traction is blockchain technology applications in carbon trading. Blockchain allows automation of credit validation and transfers through distributed ledgers for improved traceability. This addresses issues of double counting and helps ensure credits meet integrity principles. Growing demand for transparent trading processes and platforms is encouraging integration of blockchain capabilities across existing and emerging emissions exchange programs.

Porter’s Analysis

Threat of new entrants: High capital requirements and strict regulatory environment makes the entry difficult for new players in the market.

Bargaining power of buyers: Large numbers of buyers are present in the market for emissions trading. However, the buyer power is moderate as alternative options are limited.

Bargaining power of suppliers: A few large suppliers are present in the market with differentiated products. This gives them moderate bargaining power over buyers.

Threat of new substitutes: Limited substitution is possible as emissions trading is regulated by international protocols and domestic policies.

Competitive rivalry: Fierce competition exists among existing players to gain market share.

Geographical Regions

Europe accounts for the largest share in the emissions trading market in terms of value. Strict carbon emission control regulations in the EU along with availability of mature trading systems drive the European market.

Asia Pacific region is expected to witness the fastest growth during the forecast period. Rising awareness about carbon footprint, coal dependencies of developing nations and investments in renewable energy sectors contribute to the growth of the APAC emissions trading market.

1. Source: Coherent Market Insights, Public sources, Desk research
2. We have leveraged AI tools to mine information and compile it