Rising environmental concerns over increasing emission levels is expected to drive the market for emission trading schemes over the forecast period. Emission trading schemes are a market based approach to curb emission levels by providing financial incentives for achieving emission reductions. Emission allowances are allocated to participating companies which can be traded in the market to obtain maximum allowances. Implementation of Kyoto Protocol and increasing importance of Clean Development Mechanism (CDM) is expected to have a positive impact on emission trading schemes market to control emissions. In January 2005, European Commission implemented the “European Union Emission Trading Scheme” to meet its emission limit set in the Kyoto Protocol. The scheme covers 11000 carbon intensive installations with energy capacity over 20 MW through power plants in 31 countries. Increasing importance of emission allowances with the implementation of Phase III (2013-2020) is expected to have a positive impact on emission trading schemes market over the forecast period. Inclusion of aviation emissions in the scheme is expected to open new markets over the next seven years. Growing energy demand in Germany, France, UK and Italy is expected to drive the demand for energy allowances and is expected to have a positive impact on the emission scheme market. Upcoming projects such as European Union Emission Trading Scheme Phase IV in January 2021 are expected to have a positive impact on the market. Increasing importance of earning carbon benefits in manufacturing industry is expected to open new markets over the forecast period.
Asia Pacific is expected to be a major market for emission trading schemes in the near future. In September 2008, the government of New Zealand implemented the New Zealand Emissions Trading Scheme to control the rising emission levels at domestic manufacturing industry. The scheme covered energy, manufacturing and forestry industry and was amended in November 2012. Increasing importance of acquiring emission allowances on account of growing demand for consumer goods and automobiles is expected to have a positive impact on market for emission trading schemes over the next seven years. The government of Australia introduced Carbon Taxing to curb its greenhouse emissions in July 2012, which is expected to have a positive impact on emission trading schemes market over the forecast period. In April 2010, Tokyo Metropolitan Government enforced the Emission Reduction Policy in Tokyo, Japan, covering top 1400 emitters in Tokyo. In 2011, the government of China started the phase wise deployment of emission trading schemes in Beijing, Tianjin, Shanghai and Shenzhen which together account for 4 million tons of emission quotas. Regulatory inclination in Japan and China for promoting at domestic level is expected to be a major driver for market over the forecast period. In December 2009, India committed to voluntarily reduce its carbon emissions by 2020 and has set up the Perform, Achieve and Trade Scheme in 2012. This scheme is expected to tap new markets for emission trading schemes market over the next seven years.
North America is expected to witness a positive growth in emission trading schemes market over the forecast period on account of increasing implementation of policies meant for carbon trading by U.S. states such as Washington, Oregon and California. In June 2014, the US EPA drafted a rule to regulate emissions from fossil fuel powered power plants aiming to reduce CO2 emissions by 2030. This trend is expected to result in increasing implementation of emission trading schemes by state governments and is expected to have a positive impact on the market. In November 2013, Mexico government launched MEXICO2, which is a platform to trade carbon credits on the market aimed at cutting 30% emissions by 2020. This is expected to have a positive impact on market for emission trading schemes over the forecast period.
The key players in the emission trading schemes market include, Carbon TradeXchange, Orbeo, Carbonica, RBC Capital Markets, Ecosur Afrique, Delphi Group, Total, British Petroleum, BNP Paribas and Chevron. Oil and gas manufacturers such as Chevron and ExxonMobil have included sustainable growth in providing environment protection as a part of strategic plan. As a result, companies have increased their expenditure on the development of eco-friendly products with reduced carbon emissions, which is expected to challenge market growth over the next seven years.
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