Biodiversity and Natural Capital Credit Market Overview
The biodiversity and natural capital credit market is quickly gaining momentum as the world wakes up to the environmental crisis. A growing number of businesses, governments, and investors are looking beyond carbon to include biodiversity in their sustainability agendas. This shift is being driven by several factors—rising ESG commitments, stronger regulatory frameworks, growing investor interest, and increased consumer demand for eco-friendly products. In addition, international agreements like the Kunming-Montreal Global Biodiversity Framework are pushing nations to set ambitious biodiversity goals by 2030.
The result? A booming market centered on environmental credits that reflect real and measurable biodiversity outcomes.
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Corporate ESG Goals Fueling Market Demand
One of the biggest growth drivers in this market is the increasing number of companies committing to net-positive biodiversity targets as part of their ESG strategies. As pressure mounts from investors, regulators, and the public, businesses are now focusing not only on carbon reduction but also on ecosystem restoration and preservation. This means investing in initiatives like reforestation, habitat conservation, species protection, and sustainable land use.
To support these goals, companies are turning to biodiversity and natural capital credits, which allow them to offset environmental damage or enhance their positive impact by funding conservation projects. These credits are used voluntarily by organizations that want to improve their sustainability profiles, meet stakeholder expectations, or align with international standards. As these ESG commitments continue to expand, demand for credible, high-integrity biodiversity credits is rising.
Global Frameworks like Kunming-Montreal Accelerate Growth
Global efforts to tackle biodiversity loss are also playing a key role in shaping the market. The Kunming-Montreal Global Biodiversity Framework, adopted in 2022, aims to halt biodiversity decline and restore ecosystems by 2030. This agreement encourages countries to integrate biodiversity conservation into national policies and business practices, often through market-based solutions like biodiversity credits.
These international standards are pushing both governments and corporations to invest in biodiversity-positive activities. And since biodiversity credits provide measurable outcomes—like hectares of restored habitat or protected species—they are increasingly becoming tools for accountability and compliance. Businesses see them not just as offsets, but as long-term investments in environmental resilience, supply chain security, and reputation.
It’s important to distinguish between biodiversity credits and biodiversity offsets. Offsets are typically used to compensate for unavoidable environmental damage due to development. Biodiversity credits, however, are voluntary contributions to conservation and often come with added value such as stakeholder trust, customer loyalty, and competitive advantage.
Bundled Credits Create Market Opportunity
An emerging trend in the space is the bundling of carbon and biodiversity credits. Since climate change and biodiversity loss are deeply interconnected, companies are increasingly seeking solutions that address both challenges at once. Bundled credits allow organizations to offset carbon emissions while also investing in nature-positive projects like afforestation or wetland restoration.
This integration not only makes environmental strategies more effective but also more cost-efficient. Companies can meet multiple sustainability targets through a single credit purchase. These bundled solutions are also appealing to a broader base of investors and stakeholders looking for holistic environmental impact.
In short, bundled credits offer a win-win: more impactful projects, streamlined purchasing, and stronger alignment with corporate sustainability and climate strategies.
Technology-Driven Transparency with Blockchain
One of the biggest challenges in environmental credit markets has always been transparency and verification. Enter blockchain—a game-changer for biodiversity credits. Blockchain technology offers a decentralized and tamper-proof ledger, ensuring every transaction is recorded and traceable. This significantly reduces the risk of double-counting or fraudulent claims and increases trust among buyers, sellers, and regulators.
Blockchain platforms are now being used to track biodiversity project progress in real time, record credit issuance, and manage credit retirements. This digital backbone brings new levels of credibility and efficiency to the market, which is crucial as the sector scales.
Several companies are already experimenting with blockchain to facilitate global trading of biodiversity and natural capital credits. The promise of an open, transparent, and secure system is attracting both traditional investors and newcomers eager to support verified environmental impact.
Dominant Credit Types: Biodiversity Leads, Bundled Gains Ground
When it comes to types of credits, biodiversity credits hold the largest share of the market and are expected to continue leading through 2025. These include credits for habitat restoration, species conservation, and avoided ecosystem loss. Their popularity stems from increased awareness about the value of ecosystems and the push from governments and businesses to restore and preserve biodiversity hotspots.
At the same time, hybrid or bundled credits—those that combine biodiversity and carbon benefits—are expected to grow at the fastest pace. These credits appeal to companies and policymakers looking for more integrated environmental solutions. They also offer greater flexibility in meeting regulatory and voluntary commitments across different ecosystems and regions.
Europe Leads the Market, Asia-Pacific on the Rise
From a regional perspective, Europe is currently the largest market for biodiversity and natural capital credits. The EU’s strong environmental policies, financial backing for green initiatives, and advanced sustainability reporting standards make it a hotbed for credit trading and ecosystem restoration. The European Green Deal and initiatives like natural capital accounting have made biodiversity credits a key part of national and corporate sustainability programs.
Countries such as Germany, France, and the Netherlands are at the forefront, with governments supporting credit systems and companies actively participating in the market.
Meanwhile, the Asia-Pacific region is expected to see the highest growth rate over the forecast period. Rapid urbanization, deforestation, and environmental degradation in countries like India, China, and Indonesia are driving urgency for conservation efforts. Governments in the region are promoting green finance, biodiversity-friendly development, and ecosystem restoration through market-based solutions.
In China, for instance, there’s a growing push to link carbon and biodiversity credits as part of its broader climate strategy. Australia, too, is developing robust mechanisms to support habitat conservation and biodiversity markets.
Key Companies and Recent Developments
The market is supported by a mix of environmental NGOs, fintech innovators, credit exchanges, and conservation organizations. Some of the most active players include Terrasos SAS (Colombia), BioCarbon Partners (Zambia), Ekos Kāmahi Ltd (New Zealand), and Climate Asset Management (U.K.). Other notable companies include GreenVest, South Pole, CreditNature, Nature Metrics, and GreenCollar Group.
In recent years, there’s been a surge in major funding rounds and new project launches:
· In September 2024, Climate Asset Management raised over $1 billion for natural capital projects, including regenerative agriculture.
· In January 2024, Terra Natural Capital was launched to scale up financing for high-integrity nature-based carbon and biodiversity credits.
· In June 2022, Ekos Kāmahi Ltd opened a biodiversity credit market in New Zealand, supporting conservation areas like Sanctuary Mountain Maungatautari.
· In May 2022, ClimateTrade (Spain) partnered with Terrasos SAS (Colombia) to offer Voluntary Biodiversity Credits (VBCs) backed by blockchain tech for full transparency. Each $30 credit represents long-term conservation of 10m² of cloud forest.
These projects demonstrate a clear trend: biodiversity credits are no longer a niche. They are becoming central to environmental finance, offering both ecological benefits and business value.
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