Emission Trading System - Worldwide

The government income in the Emission Trading System market is projected to reach US$20.67bn in 2024.
It is expected to show an annual growth rate (CAGR 2024-2029) of 2.36% resulting in a projected total amount of US$23.23bn by 2029.
From a global comparison perspective it is shown that the highest government income is reached Germany (US$12.59bn in 2024).
In the Emission Trading System market, the number of contracts is expected to amount to 107 by 2029.

Definition:

The Emission Trading System market refers to CO2 certificate trading. These systems are financial vehicles that regulate the emissions of markets.

Structure:

The segment data of the Emission Trade System (ETS) is only provided for countries where an ETS is in place (therefore the number of countries where data is shown is reduced in comparison to other segments).

Additional information:

The market contains the following KPIs: government income, the volume of traded certificates for CO2 tones, the share of ETS covered emissions on the total market's emissions, as well as the market's CO2 emissions in total.

Emission Trading System

The Emission Trading System market has been experiencing significant developments and trends globally.

Customer preferences: Customers in various countries are increasingly showing a preference for environmentally friendly investments and are seeking opportunities to participate in initiatives that support sustainability. This shift in preferences has led to a growing interest in Emission Trading Systems as a way to reduce carbon emissions and combat climate change.

Trends in the market: In Europe, the Emission Trading System market has been steadily growing due to stringent regulations and policies aimed at reducing greenhouse gas emissions. Countries like Germany and the UK have been actively participating in carbon trading, leading to an increase in market activity and trading volumes. Additionally, the introduction of new financial products and instruments has further fueled the growth of the market in this region.

Local special circumstances: In Asia, particularly in countries like China and South Korea, the Emission Trading System market is still in the early stages of development. These countries are gradually implementing Emission Trading Systems as part of their efforts to curb pollution and meet international climate targets. The market dynamics in Asia are unique, with government initiatives playing a crucial role in shaping the growth and structure of the market.

Underlying macroeconomic factors: The growth of the Emission Trading System market worldwide is also influenced by macroeconomic factors such as global economic conditions, regulatory environment, and technological advancements. As countries strive to achieve carbon neutrality and reduce their carbon footprint, the demand for carbon credits and emission allowances is expected to increase. This, in turn, will drive the growth of the Emission Trading System market on a global scale.

Data coverage:

Figures are based on commodity derivatives, their notional value, the number of contracts traded, the open interest (outstanding contracts at the end of a year), and the average value of a contract.

Modeling approach / Market size:

Market sizes are determined by a Bottom-Up approach, based on a specific rationale for each market segment. As a basis for evaluating markets, we use market research & analysis, and data of World Bank, as well as the World Federation of Exchanges. Furthermore, we use relevant key market indicators and data from country-specific associations and national data bureaus such as GDP, wealth per capita, and the online banking penetration rate. This data helps us to estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. In this market, we use the HOLT-damped Trend method to forecast future development. The main drivers are GDP per capita an the online banking penetration rate.

Additional Notes:

The market is updated twice per year in case market dynamics change.

This report presents a comprehensive analysis and additional information on the Financial market, in a PDF format.

It is widely accepted that the world must transition to a net-zero emission economy to combat rising global temperatures and limit the worst impacts of climate change. One measure to achieve this goal that is gaining momentum around the world is carbon pricing. Between 2010 and 2023, the number of carbon pricing mechanisms more than quadrupled to 75, with these instruments now covering roughly a quarter of global GHG emissions. But with global emissions continuing to rise and carbon prices seen by many as too low to reduce emissions, will carbon pricing fulfill its potential?