Green RWAs Set to Surpass $5.6 Trillion by 2030 Amid Climate Policy Shifts

The real-world asset (RWA) tokenization market is undergoing a transformation as green RWAs emerge as a promising subsector within the broader onchain ecosystem. Nicholas Krapels, head of research and development at Mantra, predicts the RWA market could surpass $60 trillion by 2035, with green RWAs playing a pivotal role in aligning sustainability and profitability [1].

Currently, tokenized green assets account for less than 1% of total climate assets and RWAs, the latter of which are largely tokenized government securities [1]. However, with the increasing value and tokenization of green assets, the green RWA market is being viewed as an underexplored growth opportunity. Innovations in blockchain-based infrastructure are enabling new investment avenues in climate-friendly projects, particularly in emerging markets [1].

Dimitra is one such project leveraging blockchain and AI to support smallholder farmers in Brazil’s Amazon and carbon credit projects in Mexico. These initiatives offer direct investment opportunities with projected annual returns between 10% and 30% [1]. Similarly, Liquidstar is developing waypoint stations that integrate battery charging, e-mobility, atmospheric water generation, and micro-data centers, creating sustainable electron ecosystems for underserved communities [1].

Green RWAs are not limited to agriculture or energy. Carbon credits, biodiversity tokens, and renewable energy certificates are expanding the green asset economy. CarbonHood’s initiative to tokenize $70 billion in carbon credits is a case in point, representing 3.5% of a much larger $2-trillion asset pool [1]. According to S&P Global, sustainable bonds already make up 11% of the global bond market in 2024, while the Climate Bonds Initiative estimates $3.5 trillion in green assets by the end of 2024 [1].

The global shift toward stricter climate regulations, particularly under the Paris Agreement, is expected to boost demand for carbon credits and green assets. Article 6.4 of the Paris Agreement is set to establish a global carbon credit trading system by 2028, enabling countries and companies to trade credits to meet their emissions reduction goals [1]. The EU’s 2030 Climate Target Plan and the Carbon Border Adjustment Mechanism are further driving demand, with the voluntary carbon market projected to grow by 25% annually over the next decade [1].

The Middle East is emerging as a key player in the green RWA space. The UAE and Saudi Arabia are advancing demand through policies promoting electric vehicles (EVs), solar energy, and blockchain-based carbon credit registries. Dubai’s Mohammed bin Rashid Al Maktoum Solar Park, now at 3.86 gigawatts of capacity and aiming for 7.26 gigawatts by 2030, exemplifies the region’s push for sustainable development [1]. The UAE’s Road and Transport Authority is also encouraging the adoption of electric delivery vehicles, further supporting green initiatives.

Despite regulatory and technical challenges, the potential for blockchain in streamlining verification and enhancing liquidity in the green asset market is evident. Projections suggest the green asset market must expand from $2.1 trillion in 2024 to $5.6 trillion annually from 2025 to 2030 to meet global net-zero goals [1]. While adoption remains in early stages, the combination of regulatory clarity and private-sector innovation is expected to unlock the sector’s multitrillion-dollar potential [1].

Source: [1] Green RWAs recast climate assets as profitable cutting-edge tech (https://cointelegraph.com/news/green-rwas-climate-assets-as-profitable-cutting-edge-technology)