Explainer: The Global Market for Carbon Offsets

Michelle Heath
The Global Market for Carbon Offsets

The market for carbon offsets is poised to accelerate in 2021 and beyond as more company make net-zero commitments.

What are carbon offsets credits?

Carbon offset credits are financial instruments that fund technologies and practices that deliver cost-effective reductions or removals of emissions.

In 2019, 104 million tons of carbon dioxide equivalent were offset, less than 1% of global emissions.

Emissions Reduction

Substituting carbon-intensive processes with low- or zero-emission ones with the goal of mitigating future emissions.

Emissions Removals

Processes which removes carbon from the atmosphere and sequesters it for long periods of time.

Renewables are now the largest and cheapest forms of carbon offsets, accounting for more than 40% of the total market. Over the last 3 years, the market has more than doubled, with Renewable Energy and Forestry and Land Use accounting for nearly 80% of the total market.


MtCO2e – Million tons of carbon dioxide equivalent