Voluntary Carbon Market to Reach USD 7.06 Bn by 2031; Spot Transactions Accounted for 53.61% of the Market in 2026, Says Mordor Intelligence

Mordor Intelligence estimates the voluntary carbon market will grow from $2.83B in 2026 to $7.06B by 2031 (20.06% CAGR), after reaching $2.36B in 2025. Growth is supported by accelerating corporate net-zero purchases, higher demand for independently verified high-integrity credits, and improved carbon credit verification/MRV and evolving regulatory frameworks. North America remains the leading market while Asia-Pacific is projected to deliver the strongest growth.

Analysis

The investable takeaway is not broad ESG beta; it is a likely transfer of economic rent toward verification, registry, and durable-removal infrastructure while low-quality avoidance projects lose fungibility. As buyers tighten standards, the market should get smaller in SKU count but richer in price discrimination, which is structurally favorable for credible supply and unfriendly to generic “carbon market” exposure.

For listed equities, WM has the clearest but still modest optionality: landfill methane capture and renewable gas monetization can improve environmental-attribute economics, but this is unlikely to move core valuation unless credit pricing becomes durable and contractable. The bigger second-order effect is on industrial and consumer issuers with Scope 3 pressure; they may face higher compliance-like procurement costs for offsets even when the credits are voluntary, which can act as a quiet margin headwind over the next 1-3 quarters.

The contrarian view is that consensus is probably over-extrapolating TAM growth into broad monetization. If standards tighten, the near-term result can be higher average credit quality but lower aggregate volume, and the winners may be a handful of infrastructure/intermediation platforms rather than the many project developers currently implied by the market narrative. Falsifiers: a drop in corporate procurement budgets, an adverse ruling on credit integrity, or evidence that buyers are switching from offsets to direct abatement faster than new demand is created.

Key Decisions for Investors

• Stay flat TLSS and ULNV; there is no visible path from this theme to revenue or cash flow, so treat both as watchlist names only until they disclose carbon-market monetization.
• Small relative-value long WM vs. XLI for 1-3 months if you want a low-conviction expression: WM has modest landfill-methane optionality while XLI holds more direct margin exposure to higher offset procurement costs; exit if WM fails to outperform by ~3-5% into the next earnings print.
• Do not chase broad clean-energy ETFs on this headline alone; wait for evidence of sustained verified off-take volumes or registry consolidation before adding exposure to any public proxy.
• Set a regulatory alert rather than a trade: if standards tighten or a major verifier/registry widens accepted methodology rules, revisit a long-quality/short-low-integrity structure; if not, assume the market remains fragmented and liquidity-poor.