A new report published this week places the UK's carbon credit economy at £1.2 billion in annual gross value added and finds it supports more than 11,000 jobs across the country. The study, produced by the City of London Corporation in collaboration with the UK Carbon Markets Forum, is the first comprehensive attempt to quantify the full economic footprint of the sector. It positions Britain as the world's leading hub for carbon market services, but it also carries a clear warning: that advantage is not secure without a stronger and more coordinated government strategy.
The report, titled "Seizing the UK's Carbon Credit Opportunity: Measuring Value to Enable Action," arrives at a moment when carbon markets are attracting significant attention from investors, regulators and energy-intensive industries alike.
Where the UK Stands Today
The UK's position in carbon markets extends well beyond financial trading. London-based Intercontinental Exchange handled $1.4 trillion in carbon value in 2025. The UK is also home to two of the world's top five carbon ratings agencies, Sylvera and BeZero Carbon, and holds a dominant position in carbon project insurance. More than £380 million in carbon value was insured through London markets in 2025 alone.
Beyond the City, the economic contribution of carbon markets reaches across the country. Just 1.5% of UK nature-based carbon projects are located in the South East. Most are based in rural and regional areas, covering more than 100,000 hectares of woodland and peatland. Between 2023 and 2025, roughly $3.5 billion was invested into UK carbon projects and businesses. These projects generate an estimated £500 million a year in wider benefits, including flood protection, biodiversity gains and improvements to air quality.
The Scale of the Opportunity Ahead
The report sets out how large the global carbon market could become. Today, the market is valued at approximately $1.4 billion. By 2050, that figure could rise to anywhere between $15.8 billion and $267.9 billion, depending on policy conditions and demand. That potential is being driven by several forces: the expansion of AI data centres and their energy demands, aviation compliance requirements under the CORSIA framework, country-level trading under Article 6 of the Paris Agreement, and the integration of carbon credits into the UK and EU emissions trading schemes.
The UK currently ranks second in the world for engineered carbon dioxide removal companies, with 65 firms operating in the sector, behind only the United States.
What the Report Is Asking of Government
Despite the strong starting position, the report's authors are explicit that the UK's lead is not guaranteed. They identify six areas where government action is needed: clearer guidance on how businesses can use carbon credits, recognised quality standards, measures to build investor confidence, and a defined domestic strategy on greenhouse gas removals.
Chris Hayward, Policy Chairman of the City of London Corporation, states in the report that carbon markets deserve to be treated as a strategic industrial and financial services priority. Dame Clara Furse, Chair of the UK Carbon Markets Forum, points to the growing demand linked to AI and data centres as a signal that the question is not whether the market will grow, but whether the UK is positioned to lead it.
The report directs its recommendations across several government departments, including HM Treasury, the Department for Energy Security and Net Zero, and the Department for Business and Trade.
