Global carbon markets are on track for a dramatic transformation, with combined investment in carbon capture, utilisation and storage (CCUS) and carbon offsets projected to exceed $1 trillion by 2050, according to a new analysis by consultancy Wood Mackenzie.
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Driven by heightened climate ambitions, policy evolution, and corporate net-zero targets, both CCUS and voluntary offsets are emerging as pillars of long-term decarbonisation strategies. In its latest long-term outlook, Wood Mackenzie forecasts an exponential increase in global capture capacity, surging 28-fold to reach 2 billion tonnes per annum by 2050.
‘This growth is expected to attract at least $1.2 trillion in investment to deal with these emissions’, said Hetal Gandhi, global forecasts lead at Wood Mackenzie. Gandhi noted that ‘blue hydrogen leads growth until 2035, out-competing green alternatives on cost’, while sectors like cement, refining, steel, and coal power, especially in the Asia Pacific, are also primed for expanded CCUS deployment.
Alongside CCUS, the voluntary carbon offset market is also set for rapid growth. Wood Mackenzie anticipates it will surpass $150 billion in value by 2050, with offset volumes increasing sixfold.
‘The carbon offset market will grow remarkably, with volumes expanding sixfold by 2050’, said Michelle Uriarte-Ruiz, senior research analyst at the firm. Notably, carbon removal is expected to represent over 40% of offsets by mid-century, indicating a marked shift in climate strategies.
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Offset quality, as well as rising pressure to address Scope 3 emissions across supply chains, is expected to push further uptake. The firm also emphasised the complementary roles of CCUS and offsets in decarbonisation.
‘Long-term demand for carbon removal is essential for meeting net-zero targets, but avoidance and reduction offsets will play a crucial role’, said Peter Albin, analyst and co-author of the report. ‘These offsets will compensate for scope 3 emissions as companies grapple with supply chain decarbonisation complexities.’
Policy frameworks remain a key enabler, especially to scale early-stage CCUS investments and establish trustworthy offset standards. Offset credit prices are forecast to increase more than fivefold by 2050, helping to further incentivise deployment.
According to the report, market success will hinge on efforts to boost credit quality, clarify use cases, and expand carbon removal technologies — all while securing strong public and regulatory backing.
Despite the optimistic trajectory, today’s voluntary carbon market remains modest, with an estimated value of $535 million—a sharp drop from its 2021 peak near $2 billion. But Wood Mackenzie’s forecast suggests this could be just the beginning of a much larger shift.
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