The Past, Present & 

Future of Carbon 

Offsets

CFTC convening

Kyle Harrison

19 July 2023
1 19 July 2023

Source: BloombergNEF, Bloomberg Terminal, company filings Note: Chart only includes emissions covered under a net-zero target.

Net-zero targets in aggregate call for 

gigatons of emission reductions

Net-zero targets by major companies

14.5GtCO2e

Annual emission 

reductions needed for 

major companies to 

achieve net zero 

emissions, compared 

with 2015

0

5

10

15

2015 2020 2025 2030 2035 2040 2045 2050

GtCO2e

Oil & Gas Utility Materials Manufacturing

Industrials Consumer Staples Technology Health Care

Communications Financials Energy
2 19 July 2023

Source: BloombergNEF, Bloomberg Terminal, SBTI company filings Note: Chart only includes emissions covered under a net-zero target

Even the most aggressive abatement 

strategies will have residual emissions

Residual emissions from major companies under the SBTI net zero pathway

1.5GtCO2e

Residual emissions 

from major companies 

after reducing gross 

emissions in line with 

SBTI net zero pathway 

0

5

10

15

2015 2020 2025 2030 2035 2040 2045 2050

GtCO2e

Total emissions SBTI residual emissions

SBTI net zero
3 19 July 2023

Source: BloombergNEF, Bloomberg Terminal, company filings Note: Chart only includes emissions covered under a net-zero target

Even the most aggressive abatement 

strategies will have residual emissions

Residual emissions from major companies under a 2C pathway

7.9GtCO2e

Residual emissions 

from major companies 

after reducing gross 

emissions in line with 

2C scenario 

0

5

10

15

2015 2020 2025 2030 2035 2040 2045 2050

GtCO2e

Total emissions 2C residual emissions

2C pathway
4 19 July 2023

Source: BloombergNEF, Verra, Gold Standard, American Carbon Registry, Climate Action Reserve Note: Data through June.

This has led to an explosion in carbon 

offset popularity, across a range of sectors

Voluntary carbon offset retirements

41.1

32.0

42.7

52.6

70.1

93.4

161.0 153.8

73.4

2015 2016 2017 2018 2019 2020 2021 2022 2023

MtCO2e

Energy generation Avoided deforestation Energy demand Emissions Reforestation Other
5 19 July 2023

Source: BloombergNEF, Verra, Gold Standard, American Carbon Registry, Climate Action Reserve Note: Data through June.

Developers have ramped up supply in 

response to growing demand

Voluntary carbon offset issuance

38.6

50.9

83.5

57.4

80.7

128.4

234.1

246.9

141.4

2015 2016 2017 2018 2019 2020 2021 2022 2023

MtCO2e

Energy generation Avoided deforestation Emissions Energy demand Reforestation Other
6 19 July 2023

Most supply comes from the Southern 

hemisphere

Source: BloombergNEF, Verra Note: Data based on publicly disclosed buyers.

Carbon offset retirements, by geography of origin and demand
7 19 July 2023

Source: BloombergNEF, Bloomberg Terminal Note: Data comes from broker-submitted transactions.

The price of every offset is unique and 

they’re generally cheap

APAC carbon offset prices, by transaction, and other regional averages

0

2

4

6

8

10

12

14

16

18

May-22

Jun-22Jun-22

Jul-22Jul-22Jul-22

Aug-22Aug-22Sep-22Sep-22

Oct-22Oct-22

Nov-22Nov-22Dec-22Dec-22Dec-22

Jan-23Jan-23

Feb-23Feb-23

Mar-23Mar-23

Apr-23Apr-23

May-23

Agriculture Avoided deforestation Emissions

Energy demand Energy generation Reforestation

$/ton

APAC 

Latin America

Africa

$9.5/ton

Average brokertransacted offset prices 

for Africa as of May 

2023
8 19 July 2023

Source: BloombergNEF

Better infrastructure is needed to support 

a bigger and more liquid market... Infrastructure and major players in the carbon offsets market
9 19 July 2023

Source: BloombergNEF

...and boost integrity

Infrastructure and major players in the carbon offsets market
10 19 July 2023

The market desperately needs reform

0

3

6

9

0

15

30

45

2023202420252026202720282029203020312032203320342035203620372038203920402041204220432044204520462047204820492050

$/ton GtCO2e

Demand

Supply

Price $35/ton

Carbon offset prices in 

the voluntary market 

scenario in 2050

Carbon offset supply, demand and prices – voluntary market scenario

Source: BloombergNEF
11 19 July 2023

Clean Cookstoves BECCS Direct Air Capture Agriculture Reforestation REDD+

With today’s structure, offset supply sources 

that need financing would fail to get it

Carbon offset supply curve in 2050 – voluntary market scenario

Source: BloombergNEF

0

50

100

150

200

250

1 731 1,461 2,192 2,922 3,653 4,383 5,114 5,844 6,575 7,305 8,036

Millions of offsets supplied

Carbon offset cost ($/ton)

Demand

Price
12 19 July 2023

Clean Cookstoves BECCS Direct Air Capture Agriculture Reforestation REDD+

Carbon nationalism could restrict 

supply

Carbon offset supply curve in 2050 – voluntary market scenario

Source: BloombergNEF

0

50

100

150

200

250

1 731 1,461 2,192 2,922 3,653 4,383 5,114 5,844 6,575 7,305 8,036

Millions of offsets supplied

Carbon offset cost ($/ton)

Demand

Price

515MtCO2e

REDD+ abatement 

potential in jeopardy 

from the Indonesia’
13 19 July 2023

Source: BloombergNEF

0

10

20

30

40

50

60

2023 2027 2031 2035 2039 2043 2047

$/ton

India and Indonesia 

offset ban

Voluntary market 

scenario

Leading to noticeable impacts on 

pricing

Baseline and adjusted carbon offset prices in the voluntary market scenario
14 19 July 2023

Source: BloombergNEF

The market could be valued at hundreds 

of billions if handled properly

47.2

476.4

15.2

186.5

8.4

73.8

6.4

42.5

2030 2050

$ billion

Removal Voluntary market Low-quality High-quality

Annual carbon offset market value, by scenario

2030 2050
15 19 July 2023

Copyright

© Bloomberg Finance L.P. 2020. This publication is the copyright of Bloomberg Finance L.P. in connection with BloombergNEF. No portion of this document may be 

photocopied, reproduced, scanned into an electronic system or transmitted, forwarded or distributed in any way without prior consent of BloombergNEF.

Disclaimer

The BloombergNEF ("BNEF"), service/information is derived from selected public sources. Bloomberg Finance L.P. and its affiliates, in providing the 

service/information, believe that the information it uses comes from reliable sources, but do not guarantee the accuracy or completeness of this information, which is 

subject to change without notice, and nothing in this document shall be construed as such a guarantee. The statements in this service/document reflect the current 

judgment of the authors of the relevant articles or features, and do not necessarily reflect the opinion of Bloomberg Finance L.P., Bloomberg L.P. or any of their 

affiliates (“Bloomberg”). Bloomberg disclaims any liability arising from use of this document, its contents and/or this service. Nothing herein shall constitute or be 

construed as an offering of financial instruments or as investment advice or recommendations by Bloomberg of an investment or other strategy (e.g., whether or not 

to “buy”, “sell”, or “hold” an investment). The information available through this service is not based on consideration of a subscriber’s individual circumstances and 

should not be considered as information sufficient upon which to base an investment decision. You should determine on your own whether you agree with the 

content. This service should not be construed as tax or accounting advice or as a service designed to facilitate any subscriber’s compliance with its tax, accounting or 

other legal obligations. Employees involved in this service may hold positions in the companies mentioned in the services/information.

The data included in these materials are for illustrative purposes only. The BLOOMBERG TERMINAL service and Bloomberg data products (the “Services”) are 

owned and distributed by Bloomberg Finance L.P. (“BFLP”) except (i) in Argentina, Australia and certain jurisdictions in the Pacific islands, Bermuda, China, India, 

Japan, Korea and New Zealand, where Bloomberg L.P. and its subsidiaries (“BLP”) distribute these products, and (ii) in Singapore and the jurisdictions serviced by 

Bloomberg’s Singapore office, where a subsidiary of BFLP distributes these products. BLP provides BFLP and its subsidiaries with global marketing and operational 

support and service. Certain features, functions, products and services are available only to sophisticated investors and only where permitted. BFLP, BLP and their 

affiliates do not guarantee the accuracy of prices or other information in the Services. Nothing in the Services shall constitute or be construed as an offering of 

financial instruments by BFLP, BLP or their affiliates, or as investment advice or recommendations by BFLP, BLP or their affiliates of an investment strategy or 

whether or not to “buy”, “sell” or “hold” an investment. Information available via the Services should not be considered as information sufficient upon which to base an 

investment decision. The following are trademarks and service marks of BFLP, a Delaware limited partnership, or its subsidiaries: BLOOMBERG, BLOOMBERG 

ANYWHERE, BLOOMBERG MARKETS, BLOOMBERG NEWS, BLOOMBERG PROFESSIONAL, BLOOMBERG TERMINAL and BLOOMBERG.COM. Absence of 

any trademark or service mark from this list does not waive Bloomberg’s intellectual property rights in that name, mark or logo. All rights reserved. © 2020 Bloomberg.

Copyright and disclaimer
Coverage.

Clean energy

Advanced transport

Commodities

Digital industry

BloombergNEF (BNEF) is a leading provider 

of primary research on clean energy, 

advanced transport, digital industry, 

innovative materials, and commodities.

BNEF’s global team leverages the world’s 

most sophisticated data sets to create clear 

perspectives and in-depth forecasts that 

frame the financial, economic and policy 

implications of industry-transforming trends 

and technologies. 

BNEF research and analysis is accessible via 

web and mobile platforms, as well as on the 

Bloomberg Terminal.

Client enquiries:

Bloomberg Terminal: press <Help> key twice

Email: support.bnef@bloomberg.net

Learn more: 

about.bnef.com | @BloombergNEF