Report on the Global Carbon Credits Market for Agriculture, Forestry, and Land Use: An Analysis of Growth and Alignment with Sustainable Development Goals (2025-2035)

Market Overview and Projections

The global carbon credits market for Agriculture, Forestry, and Land Use (AFOLU) is undergoing significant expansion, driven by the global imperative to meet climate targets. The market is projected to grow from an estimated value of $8.8 billion in 2025 to $67.07 billion by 2035, reflecting a compound annual growth rate (CAGR) of 22.5%. This growth signifies a critical shift in investment strategies among agribusiness conglomerates, input suppliers, and equipment manufacturers toward solutions that support climate action and sustainable land management.

• Estimated Market Value (2025): $8.8 Billion
• Forecasted Market Value (2035): $67.07 Billion
• Compound Annual Growth Rate (CAGR): 22.5%

In 2024, the market was dominated by established players, holding a 78% share, while emerging startups accounted for the remaining 22%. This dynamic landscape is fostering innovation and competition, accelerating the development of technologies and practices aligned with the Sustainable Development Goals (SDGs).

Integration of Sustainable Development Goals in Market Operations

SDG 13: Climate Action

The primary driver of the AFOLU carbon market is the urgent need to address climate change, directly aligning with SDG 13 (Climate Action). Corporate net-zero commitments are converting sustainability pledges into tangible demand for high-integrity carbon credits. Companies such as Unilever, Apple, Kering, and Ingka Group (IKEA) are actively procuring AFOLU credits to offset residual emissions and achieve ambitious climate neutrality roadmaps. This corporate demand underpins project financing and stimulates market growth, making the carbon market a key mechanism for private sector contribution to global climate goals.

SDG 15: Life on Land & SDG 2: Zero Hunger

The market strongly supports SDG 15 (Life on Land) by incentivizing practices that restore and protect terrestrial ecosystems. The forestry segment, projected to witness the highest growth, promotes reforestation and improved forest management, which enhances biodiversity and watershed protection. In agriculture, techniques such as deep-rooting cover crops and biochar soil amendments not only sequester carbon but also contribute to SDG 2 (Zero Hunger) by improving soil fertility, bolstering yield stability, and enhancing ecosystem resilience against climate change.

SDG 9: Industry, Innovation, and Infrastructure

Technological advancement is fundamental to the market’s integrity and efficiency, reflecting the principles of SDG 9 (Industry, Innovation, and Infrastructure). Key innovations include:

• Precision Agriculture Equipment: OEMs like John Deere and AGCO are deploying machinery that reduces soil disturbance by up to 80% and integrates with carbon quantification platforms, streamlining verification.
• Advanced Monitoring, Reporting, and Verification (MRV): The use of high-resolution satellite imagery, AI-enabled soil-carbon modeling, and LiDAR technology has reduced verification costs and timelines, making projects more financially viable.
• Blockchain Traceability: Platforms from providers such as Xpansiv and Persefoni are being used by grain handlers like CHS and ADM to create immutable records, preventing double-counting and ensuring the environmental integrity of carbon-differentiated products.

SDG 12: Responsible Consumption and Production

The market is fostering more sustainable supply chains, in line with SDG 12 (Responsible Consumption and Production). Food processors and grain handlers are increasingly offering premiums for commodities produced with verified low-carbon practices. This creates a direct financial incentive for farmers to adopt sustainable methods. Furthermore, blockchain-anchored traceability allows end-consumers to verify the carbon-neutral claims of products, promoting transparency and empowering responsible consumption choices.

Market Dynamics: Drivers, Challenges, and Opportunities

Key Market Drivers

The market’s expansion is propelled by factors that reinforce global sustainability efforts:

• Achieving Net-Zero Carbon Emissions Goal by 2050: Corporate and national commitments to climate neutrality (SDG 13) are the principal source of demand.
• Digital MRV Protocol Harmonization: Technological standardization enhances the credibility and scalability of carbon projects (SDG 9).
• Carbon-Linked Agricultural Finance and Insurance: Innovative financial products de-risk the adoption of sustainable practices for farmers, promoting economic growth (SDG 8).

Key Market Challenges

Significant barriers must be addressed to ensure equitable and effective market growth:

• Land Tenure Uncertainty and Registration Delays: Ambiguity over land rights, particularly in regions with customary tenure systems, poses a major obstacle. This challenge directly impacts SDG 1 (No Poverty) and SDG 16 (Peace, Justice and Strong Institutions), as it can exclude smallholders and requires robust legal frameworks for resolution.
• Carbon Permanence and Reversal Risk: Ensuring that sequestered carbon remains stored long-term is a critical challenge to the environmental integrity of credits and the achievement of SDG 13.

Key Market Opportunities

Emerging trends offer pathways to a more inclusive and efficient market:

• Blockchain Tokenization and Retail Access: Tokenizing carbon credits transforms them into tradable digital assets, lowering barriers to entry for retail investors and SMEs and enhancing market liquidity and transparency (SDG 9).
• Blended Finance Structures: Combining grants, equity, and debt can unlock capital for large-scale projects, exemplifying the collaborative approach of SDG 17 (Partnerships for the Goals) to finance sustainable development.

1. SDGs Addressed or Connected to the Issues Highlighted in the Article

• SDG 2: Zero Hunger: The article discusses sustainable agricultural practices such as low-tillage, nutrient-use-efficiency inoculants, deep-rooting cover crops, and agroforestry. These methods are highlighted not only for carbon sequestration but also for their ability to “bolster soil fertility, yield stability, and ecosystem diversity,” which are fundamental to ensuring sustainable food production and ending hunger.
• SDG 9: Industry, Innovation, and Infrastructure: The article emphasizes technological advancements driving the carbon credits market. This includes “telemetry-enabled, banded-application fertilizer rigs,” “high-resolution satellite imagery and AI-enabled soil-carbon modeling,” and “blockchain tokenization.” These innovations represent the upgrading of infrastructure and industries to be more sustainable and efficient.
• SDG 12: Responsible Consumption and Production: The article details how corporations are integrating sustainability into their operations and supply chains. Companies are creating “carbon-neutral products” and using “voluntary labeling schemes” which fetch “5-10 % price premiums.” This reflects a shift towards sustainable production patterns and providing consumers with sustainable choices, driven by corporate net-zero commitments.
• SDG 13: Climate Action: This is the central theme of the article. The entire discussion on the carbon credits market for agriculture, forestry, and land use (AFOLU) is a direct mechanism for climate change mitigation. The article explicitly mentions “Achieving Net-Zero Carbon Emissions Goal by 2050” as a primary market driver and highlights how government policies (e.g., EU’s CRCF Regulation) and corporate strategies are integrating climate action.
• SDG 15: Life on Land: The article is fundamentally about managing land resources sustainably. It focuses on forestry and agriculture, discussing practices like “reforestation and improved forest management,” reducing “soil disturbance by up to 80%,” and implementing techniques that enhance soil health. These actions directly contribute to protecting, restoring, and promoting the sustainable use of terrestrial ecosystems.
• SDG 17: Partnerships for the Goals: The functioning of the carbon credits market as described in the article is a prime example of multi-stakeholder partnerships. It involves collaboration between agribusinesses (Corteva), equipment manufacturers (John Deere), grain handlers (ADM), technology providers (Xpansiv), corporate buyers (Apple, IKEA), and governments (China, Japan, EU) to achieve common sustainability goals. The mention of “Blended Finance Structures” further underscores the theme of partnership.

2. Specific Targets Under SDGs Identified from the Article’s Content

1. SDG 2: Zero Hunger

   • Target 2.4: “By 2030, ensure sustainable food production systems and implement resilient agricultural practices that increase productivity and production, that help maintain ecosystems… and that progressively improve land and soil quality.” The article’s focus on “carbon-smart products,” low-tillage methods, and techniques that “bolster soil fertility” directly aligns with creating resilient and sustainable agricultural systems.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Target 9.4: “By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased resource-use efficiency and greater adoption of clean and environmentally sound technologies…” The deployment of advanced equipment by John Deere and AGCO that reduces soil disturbance and the use of AI and blockchain for verification are clear examples of upgrading industry with clean and sound technologies.

3. SDG 12: Responsible Consumption and Production

   • Target 12.6: “Encourage companies, especially large and transnational companies, to adopt sustainable practices and to integrate sustainability information into their reporting cycle.” The article provides numerous examples, such as Unilever, Apple, Kering, and IKEA, which are making net-zero commitments, purchasing carbon credits, and reporting on their progress, thereby integrating sustainability into their core business strategies.

4. SDG 13: Climate Action

   • Target 13.2: “Integrate climate change measures into national policies, strategies and planning.” The article explicitly mentions government policies that drive the market, including “China’s agricultural subsidy reforms,” “Japan’s Farm Carbon Offset Program,” “South Korea’s Green New Deal,” and the “EU’s Carbon Removals and Carbon Farming (CRCF) Regulation.”

5. SDG 15: Life on Land

   • Target 15.2: “…promote the implementation of sustainable management of all types of forests, halt deforestation, restore degraded forests and substantially increase afforestation and reforestation globally.” The article states that the forestry segment will see the highest growth, driven by “large-scale reforestation and improved forest management projects.”
   • Target 15.3: “…combat desertification, restore degraded land and soil… and strive to achieve a land degradation-neutral world.” The agricultural practices discussed, such as using cover crops, biochar, and reducing tillage, are direct methods to restore degraded soil and improve land quality.

6. SDG 17: Partnerships for the Goals

   • Target 17.17: “Encourage and promote effective public, public-private and civil society partnerships…” The entire market ecosystem described—involving private companies, public regulations, and financial mechanisms like “Blended Finance Structures (Grants + Equity + Debt)”—is a model of public-private partnership for sustainable development.

3. Indicators Mentioned or Implied to Measure Progress

1. SDG 2: Zero Hunger

   • Implied Indicator: Financial incentives for sustainable practices. The article mentions “carbon differentiated basis premiums,” where farmers are paid an “extra $0.50-$1.00/bushel for corn,” and “incremental returns of $10-$15 per acre” for using precision equipment. These payments can be used as a proxy indicator for the adoption rate of sustainable agriculture.

2. SDG 9: Industry, Innovation, and Infrastructure

   • Implied Indicator: Reduction in verification costs and timelines due to technology. The article states that remote sensing and LiDAR have “slashed verification costs by up to 30%” and digital MRV platforms have reduced “verification timelines from months to weeks.”

3. SDG 12: Responsible Consumption and Production

   • Implied Indicator: Market premium for sustainable products. The article notes that carbon-neutral products fetch “5-10 % price premiums in Europe and North America,” which measures consumer and market valuation of sustainable production.

4. SDG 13: Climate Action

   • Implied Indicator: Market value and growth of carbon financing. The article provides a clear financial metric: the market is forecasted to grow from an “Estimated Market Value (USD) in 2025” of “$8.8 Billion” to a “Forecasted Market Value (USD) by 2035” of “$67.07 Billion.”

5. SDG 15: Life on Land

   • Implied Indicator: Reduction in soil disturbance and price premium for ecosystem services. The article quantifies a direct impact on land management with equipment that can “reduce soil disturbance by up to 80%.” Additionally, removal projects that “bolster soil fertility… and ecosystem diversity” attract “price premiums of 20-30 percent,” indicating the value placed on ecosystem restoration.

6. SDG 17: Partnerships for the Goals

   • Implied Indicator: Market share distribution and investment structures. The article notes that in 2024, “established players, accounting for 78% of the market share” and “startups managed to capture 22%,” indicating a dynamic market with multiple stakeholders. The mention of “Blended Finance Structures” also serves as an indicator of diverse partnership models.

4. Table of SDGs, Targets, and Indicators

Source: globenewswire.com