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Can major corporations such as Microsoft, Shell, and Coca-Cola transform carbon from a mandatory expense into a profitable opportunity? The carbon credit market is not only enabling businesses to reduce emissions but also unlocking substantial financial opportunities, ranging from selling surplus credits to investing in advanced technologies. Let’s explore the innovative strategies that global "giants" are adopting to achieve net-zero emissions while creating sustainable value from carbon!
1. Why businesses cannot stay out of the carbon credit race?
In the context of accelerating climate change and increasingly stringent environmental regulations, carbon credits are no longer an optional measure but have evolved into a critical business strategy for major corporations. The global carbon credit market surpassed a value of €881 billion (approximately 949 billion USD) in 2023, reflecting a 2% increase from the previous year [1]. Among these, the European market - driven by the EU Emissions Trading System (ETS) - is the largest globally in terms of financial scale, reaching approximately €770 billion and accounting for 87% of the global carbon market value [2]. According to estimates from Grand View Research, the global carbon credit market is projected to grow to 4.734 trillion USD by 2030 [3].
The global carbon credit market was valued at over $949 billion USD in 2023 (Source: Statista)
Leading corporations are not only utilizing carbon credits to meet regulatory requirements but are also actively investing in carbon offset projects and advanced emission-reduction technologies to reduce their carbon footprint and unlock opportunities for sustainable development and long-term economic value creation.
Major corporations such as Microsoft, Shell, and Coca-Cola have recognized the potential of carbon not only as a means to reduce compliance costs but also as a source of profitability through carbon-based business models. These models include projects for ecosystem protection and restoration, as well as carbon capture, utilization, and storage (CCUS) technologies.
Furthermore, amidst the increasing prominence of green finance, many corporations have proactively integrated carbon into their business models to enhance brand value, improve credibility in international markets, and expand opportunities for collaboration with ESG investors. According to Morningstar, total assets under management in ESG (Environmental, Social, and Governance) investment funds grew to 3.3 trillion USD in 2024 [4], with a significant portion allocated to carbon-related projects. As the value of carbon credits continues to rise and investor interest in green investments strengthens, businesses with effective carbon strategies are likely to gain a significant competitive edge in attracting capital flows and expanding their operations in alignment with sustainable development goals.
Green investment funds are becoming increasingly prevalent, driving businesses to integrate carbon into their business models (Source: The Internet)
With the growing participation of the private sector, the carbon market is gradually evolving into a complex ecosystem, where value is derived not only from regulatory compliance but also from the ability to optimize and capitalize on related financial opportunities.
2. Four strategic models helping businesses achieve sustainability, reduce emissions, and optimize costs
The carbon credit market offers not only opportunities for emission reductions but also enables businesses to optimize costs and enhance financial performance. Instead of treating carbon credits merely as a compliance expense, many major corporations have adopted innovative strategic models to simultaneously achieve emission reduction goals, streamline operational costs, increase profitability, and create sustainable financial opportunities. Below are four common strategic models nowadays:
2.1. Selling surplus carbon credits
In compliance markets such as the EU Emissions Trading System (EU ETS) and California Cap-and-Trade (USA), governments or regulatory authorities establish an emissions cap for regulated businesses. Each company is allocated a specific number of carbon allowances, with each allowance representing the right to emit one ton of CO₂ or CO₂ equivalent (CO₂e).
If a company emits less than its allocated allowance due to the adoption of clean technologies or optimization of production processes, it generates surplus carbon allowances. These can then be sold to companies exceeding their emission limits. Conversely, businesses unable to reduce emissions quickly enough must purchase additional allowances to remain compliant and avoid penalties.
This system creates financial incentives for companies to invest in emission-reduction solutions, as the earlier they reduce emissions, the more surplus allowances they can sell. This dynamic not only encourages sustainability but also transforms carbon reduction into a potential revenue stream for forward-thinking businesses [5].
Businesses emitting less than their allocated limit can sell surplus carbon allowances to other companies, creating a new revenue stream (Source: The Internet)
Carbon allowances in compliance markets often hold high value and fluctuate based on the climate policies of individual nations. In the EU Emissions Trading System (EU ETS), the average carbon allowance price rose from €23.61 per ton of CO₂ in 2020 to over €65 per ton in 2024 [6], even surpassing €90 per ton in August 2022 [7].
As governments tighten emission caps under the Net Zero 2050 roadmap, the value of carbon credits in these markets is expected to continue rising. This positions carbon credits as a significant financial instrument, not only for regulatory compliance but also for maximizing long-term business profitability.
The average annual carbon allowance price in the EU Emissions Trading System (Source: Statista)
Besides compliance markets, businesses can also sell carbon credits in voluntary carbon markets (VCMs). In these markets, companies proactively purchase credits to fulfill emission reduction commitments, rather than being mandated by regulations. Carbon credits in VCMs are issued by independent certification bodies and represent the reduction, removal, or avoidance of one ton of CO₂ equivalent (CO₂e). Each credit is assigned a unique serial number, tracked, traded, and retired via electronic registries to ensure transparency and prevent fraud [5].
The rapid growth of the carbon market is transforming carbon credits from a compliance tool into a financial asset class. Numerous companies, including Tesla, have capitalized on this opportunity. Between 2009 and 2023, Tesla generated $9 billion in revenue from selling carbon credits to other electric vehicle (EV) manufacturers, with a record-breaking $1.79 billion earned in Q4 2023 alone [8].
2.2. Developing carbon offset projects
Carbon offset projects are initiatives designed to reduce, prevent, or remove greenhouse gases from the atmosphere by organizing or investing in programs such as habitat conservation, renewable energy development, or improvements in energy efficiency and emission reduction technologies [9]. These projects generate carbon credits for the organizations that develop or invest in them, which can be used to offset their excess emissions or sold to other companies to generate profits.
Carbon offset projects span various sectors, often are: renewable energy using wind, hydrogen, and solar power (helping decrease CO₂ emissions from fossil fuel usage), fuel switching (reducing emissions by replacing fossil fuels with biofuels), energy efficiency improvements (optimizing production processes and energy consumption, leading to lower CO₂ emissions), methane and industrial gas management (cutting greenhouse gas emissions from waste and industrial activities), and biological carbon sequestration (e.g. reforestation, afforestation, sustainable forest management, and ecosystem restoration, focus on capturing and storing carbon naturally) [10].
Carbon offset projects come from various sectors (Source: The Internet)
The global carbon offset market is currently dominated by leading companies such as Carbon Credit Capital, EcoAct, South Pole, and WayCarbon [11]. Among them, South Pole, a Switzerland-based company, has implemented more than 800 climate projects worldwide [12], covering a wide range of themes.
Notable projects include Sustainable Farming for the Future in Germany, which aims to promote sustainable agriculture across Europe; Domestic Biogas for Clean Cooking in India, focusing on converting waste into energy; and Huoshui Small Hydropower, which delivers clean energy to remote mountainous communities in Southwest China [13.
South Pole has implemented over 800 climate projects worldwide and has sold carbon credits to more than 50 major global corporations (Source: The Internet)
These projects not only generate positive social impacts, improve residents’ livelihoods, and protect the environment but also produce millions of carbon credits, which are sold to over 50 major corporations such as eBay, Nestlé, Aldo, Tetra Pak, and Worley. As a result, these companies can achieve their emission reduction targets, enhance their climate commitments, and offset their excess emissions [14].
2.3. Carbon ETFs (Exchange-Traded Funds) and Carbon credit futures contracts
In addition to the aforementioned methods, businesses and investors can profit from the carbon market by investing in Carbon ETFs (Exchange-Traded Funds), which provide access to carbon prices without requiring direct involvement in carbon credit transactions. This approach is an effective way for investors to diversify their portfolios and gain exposure to the carbon market without the need to select individual stocks. These funds help minimize risks associated with investing in emerging and less stable markets while offering broad and flexible access for investors [15].
Investors can choose between two common investment strategies when participating in the carbon market. The first strategy involves multi-strategy commodity funds, where the fund allocates less than 10% of its resources to one or two specific markets based on short-term tactical insights. The second option involves thematic investment funds, such as carbon ETFs, similar to funds that focus on oil or gold investments. Investors pursuing this strategy operate on the assumption that CO₂ prices will rise over time, enabling them to capitalize on fluctuations in carbon credit prices in the future [16].
One of the primary assets tracked by many carbon ETFs is carbon credit futures contracts. These contracts reflect the value of carbon credits and serve as financial instruments allowing investors to engage in the price volatility of the carbon market without directly owning the credits. Carbon credit futures enable buyers to offset their emissions through carbon offset projects that protect natural ecosystems without the need for direct investments in those projects [17].
Each carbon futures contract represents 1,000 carbon credits generated from environmental protection projects. These futures contracts are a type of derivative instrument in which two parties agree to trade the underlying asset at a specified future date and price. Given the volatility of carbon prices, carbon credit futures can help mitigate risks when included in an investment portfolio. However, it is important to note that futures contracts are a more advanced and complex trading strategy compared to direct investments in the underlying assets of an ETF, as they track the performance of the futures contracts themselves.
Carbon futures have become an essential tool for energy-intensive facilities, industrial manufacturers, and large enterprises, enabling them to secure a stable and predictable supply of carbon credits at consistent costs [17].
The growing popularity of these financial instruments is reflected in the impressive trading volumes recorded in 2023: California Carbon Allowance (CCA) futures reached 172,157 lots, Regional Greenhouse Gas Initiative (RGGI) futures hit 34,454 lots, and European Union Allowance (EUA) futures increased by 8% year-over-year, reaching 593,110 lots. Furthermore, the ICE Global Carbon Index - a composite index representing the value of carbon credit futures across multiple markets (EUA, CCA, RGGI, UKA) - reached its highest level in July at 718 points. This highlights the rising prices of these instruments and the growing significance of the carbon credit market for businesses [18].
The ICE Global Carbon Index reached a record high, reflecting the rising prices and increasing importance of the carbon credit market (Source: The Internet)
This trend underscores the growing interest in carbon futures contracts, not only as a compliance tool but also as a strategic financial asset that attracts capital from both businesses and institutional investors.
2.4. Carbon Capture, Utilization, and Storage (CCUS) Technology
Carbon Capture, Utilization, and Storage (CCUS) is a critical solution for businesses aiming to minimize CO₂ emissions. This technology captures CO₂ directly from major emission sources, such as power plants, industrial facilities, and manufacturing sites. Once captured, the CO₂ can be stored underground in deep geological formations or reused in applications such as chemical production, fuel manufacturing, or even enhanced oil recovery.
CCUS technology helps businesses significantly reduce the amount of CO₂ released into the atmosphere, contributing to global climate change mitigation efforts. Moreover, it allows companies to maintain their operations without completely overhauling existing production processes, making it a viable pathway toward sustainability and emission reduction targets [31].
Carbon Capture, Utilization, and Storage (CCUS) Technology (Source: The Internet)
The CCUS market is currently experiencing rapid growth, with over 700 projects being implemented worldwide. By 2030, the total amount of CO₂ that can be captured annually is estimated to reach approximately 435 million tons, with storage capacity reaching around 615 million tons per year [32]. This growth is expected to accelerate in the coming years, driven by increasing policy support and investments from both governments and businesses.
According to the International Energy Agency (IEA), the CCUS market will need to achieve a capture capacity of up to 1 billion tons of CO₂ per year by 2030 to meet global climate goals [32]. This outlook underscores the critical role of CCUS in the global transition toward net-zero emissions.
Major corporations worldwide are making significant investments in CCUS technology to mitigate emissions and achieve their climate goals. Notable examples include Exxon Mobil, Mitsubishi Heavy Industries, and Cemex. Exxon Mobil has invested in a project that captures 1 million tons of CO₂ annually in the Gulf Coast region. Meanwhile, Mitsubishi Heavy Industries has initiated a CCUS pilot project at its thermal power plants in Japan, aiming to reduce CO₂ emissions from these facilities by 90% [33].
Cemex, through its Cemex Ventures fund, has also invested in the startup KC8 Capture Technologies to develop CO₂ capture technologies at its cement plants, targeting a daily capture capacity of over 100 tons of CO₂—ten times the scale of the company’s current projects [34].
CCUS solutions adopted by Mitsubishi Heavy Industries (Source: Mitsubishi)
The adoption of CCUS technology not only delivers environmental benefits but also opens up long-term financial opportunities for businesses. By reducing CO₂ emissions into the atmosphere, CCUS helps companies move closer to achieving net-zero emissions by 2050. Financial support policies have played a crucial role in driving the development of this technology. Between 2011 and 2023, the U.S. government allocated $5.3 billion to fund research and programs related to CCUS. Additionally, the 45Q tax credit program helped businesses lower the costs of capturing and storing CO₂, with a total financial aid value of up to $1 billion from 2010 to 2019 [35].
These policies not only ease financial burdens but also provide incentives for companies to undertake new CCUS projects in the future. Moreover, investing in CCUS can generate additional revenue through the sale of carbon credits or by optimizing production processes, enabling businesses to reduce operational costs and efficiently utilize CO₂.
3. What Global Giants Are Doing in the Billion-Dollar Carbon Market?
3.1. Microsoft
As one of the first technology corporations to pledge becoming “carbon negative” by 2030, Microsoft also ambitiously aims to eliminate all emissions it has ever produced since its founding in 1975 by 2050 [19]. To realize this commitment, Microsoft is not only focusing on reducing emissions but also implementing a wide range of large-scale carbon removal initiatives. These efforts are divided into two main categories: nature-based projects and advanced technology-driven projects.
Microsoft has set 'bold' goals for emission reductions (Source: Microsoft)
Promoting Nature-Based Carbon Removal Projects
Microsoft has signed numerous large-scale agreements with global partners to advance reforestation and ecosystem restoration initiatives. One of the most notable transactions took place in June 2024, when Microsoft partnered with BTG Pactual Timberland Investment Group (TIG) to purchase 8 million tons of carbon credits from forest restoration projects in Latin America. This project not only protects and restores over 330,000 acres of natural forestland but also contributes to biodiversity conservation in areas such as the Cerrado ecosystem in Brazil, marking the largest CO₂ removal credit transaction ever recorded, according to MSCI Carbon Markets data [21].
In parallel, Microsoft has committed to a 25-year agreement to purchase carbon removal credits from Chestnut Carbon, a pioneering startup in forest conservation. Under this agreement, Microsoft will acquire 7 million tons of credits from forest restoration projects in the southern United States, contributing to the preservation of 60,000 acres of land and the planting of over 35 million ecologically valuable hardwood and softwood trees. This represents the largest voluntary corporate investment in forest conservation ever made in the United States [22].
Leveraging advanced technologies for carbon removal
In addition to nature-based solutions, Microsoft has made significant investments in advanced carbon capture and removal technologies. One of its most notable agreements is with 1PointFive, a Houston-based company specializing in Carbon Capture, Utilization, and Storage (CCUS). Under this deal, Microsoft will purchase 500,000 tons of carbon removal credits over six years through Direct Air Capture (DAC) technology. This marks the largest carbon removal credit transaction involving DAC technology to date, highlighting the growing adoption of this technology in global climate action efforts [23].
Microsoft has committed to purchasing 500,000 tons of carbon removal credits from 1PointFive's DAC technology (Source: 1PointFive)
Beyond DAC, Microsoft has also partnered with Stockholm Exergi to acquire over 3.3 million tons of carbon credits from a bio-energy with carbon capture and storage (BECCS) project in Värtan, Stockholm. This represents the largest technology-based carbon removal transaction in history. The project integrates a biomass-fueled power plant that uses materials from forests, sawmills, and paper production with a carbon capture and storage system, effectively removing 800,000 tons of CO₂ annually [20].
Driving global innovation in carbon commercialization
Recognizing the pivotal role of technology in combating climate change, Microsoft established its $1 billion Climate Innovation Fund to support the development of technologies aimed at reducing, capturing, and removing carbon emissions globally. This investment not only helps Microsoft progress toward its carbon-negative target but also accelerates the widespread adoption of sustainable energy transitions worldwide [19].
Microsoft’s Climate Innovation Fund supports the advancement of technologies aimed at reducing, capturing, and removing carbon emissions globally (Source: The Internet)
From investing in reforestation projects to advancing carbon capture technologies, Microsoft is progressively realizing its commitment to leading the carbon removal market while shaping the future of this sector on a global scale.
3.2. Shell
As one of the largest oil and gas companies in the world, Shell faces significantly greater pressure to reduce emissions compared to businesses in other sectors. To achieve its goal of net-zero emissions by 2050, Shell has undertaken efforts to reduce emissions from its operational activities and has been actively developing low-carbon energy sources, such as electric vehicles, hydrogen, and renewable energy derived from wind and solar power. The remaining carbon emissions are either captured and stored using advanced technologies or offset through nature-based projects [24].
Promoting Nature-based solutions (NBS)
One of Shell's key initiatives is its Nature-Based Solutions (NBS) program, which focuses on direct investments in projects that protect and restore natural habitats. These include the restoration of 3,800 hectares of mangrove forests in Senegal, carbon farming across more than 9 million hectares of land in Australia, and the rehabilitation of 10,000 hectares of degraded land in the Philippines. These projects not only contribute to CO₂ absorption and greenhouse gas emission reductions but also enhance biodiversity, support local communities, and foster sustainable development [24].
By collaborating with non-governmental organizations, governments, local communities, and experts, Shell is committed to advancing nature-based solutions to address global climate challenges.
Shell's Nature-Based Solutions program specializes in investing in projects aimed at protecting and restoring natural habitats (Source: Shell)
Providing carbon offset solutions for customers and businesses
Shell is also a pioneer in offering carbon offset solutions for both individual and corporate customers through its Shell GO+ Rewards program. In the UK and the Netherlands, customers refueling at Shell stations can opt to pay a small additional fee by registering via the Shell app or website. They can then use the Pay at Pump function or scan the Shell app at the store. These fees are invested by Shell into nature-based carbon credit projects, effectively offsetting the CO₂ emissions generated from the fuel used by customers [25].
The Shell GO+ Rewards program offers carbon offset solutions for customers at charging stations (Source: The Internet)
For businesses, Shell provides support solutions to help airlines and enterprises meet quality standards and compliance requirements under international programs such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) by ICAO, with a portfolio of over 120 certified carbon offset projects. Additionally, Shell assists companies in customizing transaction structures and managing carbon products to achieve both mandatory compliance goals and voluntary carbon offset objectives, thereby enabling them to fulfill their climate commitments effectively [26].
Investing in Carbon Capture and Storage (CCS) Technology
Building on its commitment to sustainability, Shell is intensifying its investments in Carbon Capture and Storage (CCS) technology on a global scale. The company currently operates 3 CCS facilities, has 12 projects under development, and is engaged in six strategic partnerships across the Asia-Pacific region to explore and evaluate the potential for developing, operating, and applying this technology [27]. Among these initiatives, the Quest project in Canada stands out, having captured over 7.7 million tonnes of CO2 since it began operations (as of the end of 2022) [28].
Shell's Quest carbon capture and storage facility in Canada (Source: The Internet)
3.3. Coca-Cola Europacific Partners (CCEP)
Driving Internal Emission Reductions with Carbon Pricing
To accelerate its transition to lower-carbon operations across its value chain, Coca-Cola Europacific Partners (CCEP) has piloted the implementation of an internal carbon pricing set at €100 per ton in Europe. This pricing mechanism serves as a strategic tool for internal decision-making, particularly in processes such as capital expenditure (CAPEX) planning, rather than directly applying carbon fees.
The introduction of an internal carbon price not only helps CCEP assess the financial implications of its decarbonization activities but also acts as a catalyst to promote sustainable transitions throughout its value chain. CCEP is committed to regularly reviewing and adjusting the carbon price while gradually expanding its application to other markets as data and management systems continue to improve [29].
Carbon offsetting and Ecosystem conservation
While prioritizing emission reductions across its value chain, Coca-Cola Europacific Partners also implements carbon offset solutions to address residual emissions that cannot be eliminated. Between 2022 and 2024, the company purchased 100,000 carbon credits from two major projects in Indonesia: Rimba Raya and Katingan Peatland Restoration.
The Rimba Raya project, certified under the VCS and REDD+ standards, is globally recognized as the first project to achieve the Sustainable Development Verified Impact Standard (SDVIS), delivering benefits aligned with the United Nations' Sustainable Development Goals (SDG). Meanwhile, the Katingan Peatland Restoration project, rated AAA- on the BeZero platform and ranked among the top 10 projects globally, protects tropical rainforests and peatlands from conversion to palm oil plantations while restoring degraded areas. These initiatives not only contribute to biodiversity conservation but also achieve significant CO2 emission reductions [29].
Katingan Peatland Restoration carbon offset project in Indonesia (Source: The Internet)
Investing in Carbon Capture, Utilization, and Storage (CCUS) Technology
In addition to reducing internal emissions, Coca-Cola Europacific Partners (CCEP) is actively investing in advanced technologies to capture and reuse CO2 in its production processes. Through its investment arm, CCEP Ventures, the company is funding high-potential research projects, such as the development of innovative carbon-absorbing materials in collaboration with the University of Tarragona and the University of Twente. These projects aim not only to minimize CO2 losses during production processes but also to significantly reduce the carbon footprint across the supply chain.
Moreover, CCEP Ventures has partnered with the University of Berkeley and the University of Swansea to explore the potential reuse of captured CO2 in producing components such as sugar or ethylene, a key precursor for PET plastics. If these studies are scaled successfully, they could substantially lower carbon emissions throughout CCEP’s supply chain while adding significant value to the final products [29].
Coca-Cola Europacific Partners collaborates with Berkeley University to research CO2 conversion into sugar (Source: The Internet)
Applying Direct Air Capture (DAC) Technology in the Beverage Industry
To position itself as a pioneer in leveraging technology for emission reduction, CCEP is collaborating with Airhive, a UK-based Direct Air Capture (DAC) technology company, to pilot a DAC system capable of capturing up to 1,000 tons of CO2 annually. This technology captures CO2 directly from the atmosphere and repurposes it to replace fossil-fuel-derived CO2 in Coca-Cola’s beverage products. This initiative represents a significant step in reducing carbon emissions across the company’s value chain while introducing a more sustainable approach to the beverage industry.
The Direct Air Capture project invested by CCEP in Airhive shapes the future of the beverage industry (Source: The Internet)
Airhive's DAC technology utilizes "fluidized bed" techniques, an advanced industrial method commonly used in mineral processing and food drying. Airhive has optimized this technology to capture over 99% of CO2 from the air passing through its system in less than 0.1 seconds, significantly reducing operational costs - one of the major barriers to scaling up DAC systems [30].
Beyond its emission reduction benefits, this technology has the potential to advance the low-carbon industry by supplying clean CO2 at more affordable costs. With financial backing from CCEP and other investment funds, this project not only supports Coca-Cola in achieving its goals of a 30% emission reduction by 2030 and Net Zero by 2040 but also contributes to shaping the future of carbon capture technology in the manufacturing and consumer goods sectors.
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