May 29, 2024

Emissions Trading Market Is Driven By Growing Demand To Curb Greenhouse Gas Emissions

The Emissions Trading Market involves the buying and selling of permits for emitting carbon dioxide and other greenhouse gases. Companies receive permits to emit a certain amount of greenhouse gases, with a cap placed on overall emissions. Those below their emission cap can sell unused allowances to those above the cap, providing flexibility and cost savings. This incentivizes investment in low-carbon technologies. The global Emissions Trading Market allows heavy carbon emitters like power companies and manufacturers to independently track and regulate their greenhouse gas output.

Emissions trading schemes have become a mainstream policy tool for reducing emissions cost-effectively at national and regional levels. The European Union Emissions Trading System is the largest carbon market worldwide, putting a price on carbon pollution from more than 11,000 power stations and industrial plants in 30 countries. Schemes are also operating in countries like China, Korea, and Switzerland. Emissions allowance auctions and trading provide economic incentives for investments in energy efficient technologies, renewable energy sources and carbon capture and storage. 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 2030, as highlighted in a new report published by Coherent Market Insights.

Market key trends:
Carbon pricing initiatives are gaining momentum globally with more jurisdictions introducing carbon taxes or emissions trading systems. Over 60 national and 25 sub-national jurisdictions have now adopted carbon pricing policies around the world. This covers about 22% of global GHG emissions. The coverage and carbon prices are expected to increase further this decade to help meet climate targets under the Paris Agreement. Growing compliance with emissions regulations will drive demand for trading allowances and credits across key sectors covered under these schemes. Integration of regional carbon markets is also underway to foster cost-effective abatement at larger scales and support sustainable economic growth.

Porter’s Analysis
Threat of new entrants: The emissions trading market has moderate barriers to entry due to large capital requirements and complicated regulations. However, new technologies can lower these barriers over time.

Bargaining power of buyers: Buyers in the emissions trading market have high bargaining power as there are many suppliers. Buyers can play suppliers against each other to negotiate lower prices.

Bargaining power of suppliers: Suppliers have moderate bargaining power due to the significant number of buyers in the market. However, suppliers differentiate their offerings to maintain pricing power.

Threat of new substitutes: There is a low threat of substitutes as emissions trading is regulated by governments as the most viable way to reduce emissions in a cost-effective manner.

Competitive rivalry: The market is highly competitive with the presence of many local and global players competing on pricing and product innovation.

Key Takeaways
The Global Emissions Trading Market Growth is expected to witness high.

Regional analysis: Europe dominates the market currently due to the longest-standing and largest carbon market in the EU Emissions Trading System (EU ETS). The Asia Pacific region is expected to grow at the fastest pace during the forecast period with China and other countries rolling out carbon markets. The establishment of carbon markets and tightening of emission norms will help drive market growth.

Key players: 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 major players are focusing on offering innovative and cost-effective solutions to gain a competitive edge in the market.

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