VCM Forecast to Reach $27bn in 2035: New Report

The voluntary carbon market (VCM) is expected to hit $27bn in 2035, according to the initial results of the AlliedOffsets forecasting model.

Assuming demand grows at the levels we forecast, we expect prices to reach $10/ton in 2027, with $20+/ton prices coming in 2039.

Those interested in reading the full results of the analysis can do so in our latest report.

The projections come from the AlliedOffsets forecasting model, a tool to enable VCM stakeholders to prognosticate how the market will look in the coming decades.

The forecasting model can be used to anticipate:

• Prices per ton for credits in the VCM
• Prices per ton for credits from specific sectors (REDD+, DAC, biochar, etc.)
• Market make-up by project sector
• Total primary market size
• Levels of demand needed to reach certain prices in the market
• Retirement projections given corporate emission reduction targets being missed
• Amount of capital needed to ensure a certain level of supply of credits in the market
• NPV of projects’ cash flows
• Potential IRR of projects given price and demand scenarios

The model is built using millions of data points on projects, companies, prices, emissions reductions targets, and more. The model has also been reviewed by project developers and VCM experts, who have provided valuable insights into the project creation process that the model is built to model.

AlliedOffsets has built the model with an eye toward bespoke analysis. Anyone interested in understanding the assumptions behind it can read how the model was constructed in a wiki. 

Those who would like to test out the model and input their own demand assumptions can do so by reaching out to hello@alliedoffsets.com.