Report
World Bank State and trends of carbon markets 2025
Description
In 2024, carbon markets grew to cover over 24% of global emissions, with revenues exceeding $104 billion. Key trends include expanding carbon pricing to new sectors like aviation and waste, a shift in the voluntary market towards high-quality removal credits over reduction credits, and increased corporate interest in long-term offtake agreements for carbon removal projects to gain more control and certainty. However, despite progress, current pricing levels are still insufficient to meet the Paris Agreement goals.
The World Bank’s annual State and Trends of Carbon Pricing report is aimed at providing an up-to-date overview of existing and emerging carbon pricing instruments around the world, including international, national, and subnational initiatives. It focuses on identifying key developments relating to all forms of direct carbon pricing – emissions trading systems, carbon taxes, and carbon crediting mechanisms. This year’s report will be the twelfth (in its current format) – building on many decades of World Bank Group’s work in this space.
Key findings for 2025:
- Carbon pricing now covers around 28% of global emissions.
- Carbon pricing mobilized over $100 billion for public budgets in 2024.
- Over half of power sector emissions are covered by a carbon price, while coverage levels vary across other sectors.
- Carbon credit supply continued to outstrip demand, moving the global pool of unretired credits to almost 1 billion tons in 2024.
- Increased demand from compliance markets drove growth in carbon credit retirements.
- Carbon credit prices softened slightly, with premiums for credits from nature-based carbon removals projects and credits with perceived higher quality
