Fresh from inking a deal that will see it move into the Japanese market, UK-based carbon offset provider The CarbonNeutral Company has confirmed it is also considering setting up operations in the Middle East as part of its global expansion plans.

Sue Welland, co-founder and executive director of The CarbonNeutral Company, said that the firm had a number of business customers in the Middle East, particularly in the property development sector, and was considering working with an associate partner in the region that could resell the company's carbon credits.

The revelation comes just days after the company inked a partnership with Japanese environmental consultancy Recycle One that will see its new partner act as a reseller of the CarbonNeutral Company's offsets in the emerging Japanese market.

"The focus of the next twelve months is to continue our push in the US, where we opened offices last year, and break into Japan," said Welland. "We are working closely with [Recycle One] to train up their staff and they already have a number of clients they are talking to."

The market for voluntary carbon offsets is still experiencing exponential growth, according to Welland, driven by burgeoning demand from the business sector. "My instinct is that there is massive potential consumer demand… but it is not as strong as I'd expect at the moment," she said. "The business side of the market is much stronger."

The nature of The CarbonNeutral Company's business clients is also evolving, Welland said, with business-to-business operations such as law and professional services firms increasingly joining the consumer-facing businesses that made up the first wave of offset customers.

"Demand is accelerating and we're getting two or three multi-million pound tenders a month," she said. "We're also seeing that companies aren't necessarily going carbon neutral but are using offsets to make up the shortfall if they miss their internal carbon reduction targets. The offset acts as a penalty if they miss the target and provides an extra financial incentive for them to stay on track with emission reductions."

In a wide ranging interview that will appear on BusinessGreen.com next week, Welland also confirmed that the company would continue to limit its involvement in forestry-based offset projects, which can take up to 100 years to deliver projected carbon savings.

Originally called Future Forests the Carbon Neutral Company has previously invested heavily in forestry projects, but Welland said that such projects now made up just 10 per cent of its offset portfolio and that she could envisage a scenario where the company would cease to offer forest-based offsets altogether. "Obviously it would depend on customer demand and reforestation is back on the political agenda after Bali," she said. "But technology based offsets deliver faster reductions… and I can see us continuing to reduce our involvement in forestry."

In separate news, the US Federal Trade Commission undertook its first roundtable on carbon offsetting this week as it begins the process of updating its guidelines for how firms should market and advertise environmental initiatives.