Voluntary Carbon Market Poised for $2.27B Annual Growth by 2025

The voluntary carbon market (VCM) is set for a new phase of growth, with companies increasingly buying carbon credits to offset emissions. A recent report by AlliedOffsets, a data and technology firm, predicts that new and returning buyers will spend around $2.27 billion per year on these credits.

The demand is expected to come from a mix of industries, led by aviation, energy, and technology sectors.

AlliedOffsets tracks the VCM through a database covering over 36,000 projects, 28,000 buyers, and billions of tons of carbon credits. Their latest model, called Likelihood to Buy (LtB), identifies which companies are most likely to enter the market next. Key factors influencing this include a company's abatement potential, data centre usage, headquarters location, internal carbon pricing, net-zero targets, sector, and financial performance.

The firm estimates that new and returning buyers will need about 281 million credits annually. The highest demand is projected from the U.S., China, the UK, France, Germany, and Brazil. Among the 11,500 companies expected to buy credits, around 7,200 (63%) come from countries that previously saw fewer than 100 purchases per year. India leads with 2,100 companies, followed by Brazil (1,500) and Indonesia (1,200).

Over the past five years, the VCM has expanded rapidly, with most activity coming from technology, telecommunications, and energy firms. Now, stricter climate rules, corporate commitments, and improved forecasting tools are pushing the market into a fresh growth cycle. The U.S., UK, France, Germany, and Japan currently host the largest number of buyers in the VCM.

The VCM's expansion reflects broader corporate efforts to meet climate goals through carbon offsetting. With aviation and energy sectors leading demand, the market is expected to see sustained investment in the coming years. AlliedOffsets' projections suggest a steady rise in both spending and credit requirements from a diverse range of global buyers.