Forestry Landuse Carbon Credit Market Trends

Growth Drivers

• Growing Emission of Carbon Dioxide - Carbon dioxide emissions in the world from industry and fossil fuels increased to 36 billion metric tons (GtCOâ‚‚) in the year 2022. Emissions are estimated to have boosted by over 2 percent in 2023 to reach a record high of approximately 37 GtCOâ‚‚. Since 1990, COâ‚‚ emissions globally have risen by about 59 percent. As a result, the need to plant more trees is growing. With the growth in trees, the prevalence of climate change is reduced significantly and this takes place by limiting carbon dioxide from the air, further collecting carbon in the trees and soil, and discharging oxygen into the atmosphere. Therefore, the forestry & landuse carbon credit market is set to rise in the world.
• Rising Advancement in Technology - The advancement in technology is playing a significant role in various end-user industries. Further, its importance is also rising in forestry & landuse carbon credit market. Various technologies including satellite imaging, blockchain, and machine learning are being deployed in this field in order to influence monitoring, reporting, and verification. More accurate, and translucent data is offered by this enhanced technology for further highlighting concern regarding the legitimacy of carbon offset projects. These technology advancements along with fostering trust among market players facilitate the scaling up of projects. As a result, the market for forestry & landuse carbon credit is poised to be encouraged.
• Improve Financial Attractiveness by Selling Forestry & Landuse Carbon Credit - Forestry projects aim to improve the financial attractiveness and justify larger expenditures by selling carbon offsets. These may be earned in forest-related projects, including enhanced management of forests with reduced-impact logging, tree-planting, and reduced deforestation. After third-party confirmation carbon credits are issued into registries to evaluate baseline setting, additionality, leakage, emissions monitoring, and permanence. The impact of such projects differs largely, contingent on the type of project. A funding source for projects is constituted by carbon credits that may not be executed any other way and hence have the possibility to produce manifold benefits.

Challenges

• Lack of Awareness Among End-Users - A large number of end-user industries are still unaware of the benefits of forestry & landuse carbon credit. Hence, its adoption is relatively low. Therefore, the forestry & landuse carbon credit market is set to be hindered.
• Large False Data Regarding Emission - Large number of countries across the world underreport their greenhouse gas emissions data. The aim to protect the globe from the prevalence of climate change is built on data. However, the data the globe is depending on is erroneous. Also, the companies provide false data to the authorities to gain the clean cheat for their operation in the environment. As a result, this is further predicted to restrain the adoption of forestry & landuse carbon credit.
• Require High Investment