Introduction
The concept of carbon offsetting has been under scrutiny, misunderstood and over relied upon in the past years, all at the same time. But what is offsetting exactly, how should it (not) be used and what kind of carbon credit project types exist? In this blog we explain the basics of carbon offsetting to get a better understanding of these topics.
Summary
- Carbon offsetting is a practice where businesses compensate for their unavoidable emissions by funding projects that reduce or remove emissions elsewhere.
- Offsetting is based on the principle ‘if you pollute, you pay’
- Offsetting not ‘the solution’ to the climate problem, but one of multiple tools in our arsenal to make impact.
- This helps businesses achieve their sustainability goals and contributes to a cleaner environment.
Unavoidable emissions
Each company has a carbon footprint, consisting of Scope 1-2-3 greenhouse gas emissions. While minimizing emissions is essential, there are certain ‘unavoidable’ or ‘residual’ emissions that businesses will generate due to their operations. Unavoidable or residual emissions refer to greenhouse gas emissions that persist despite the implementation of various mitigation measures and sustainable practices. Certain emissions may simply remain inherent or difficult to eliminate entirely because of technological limitations, economic constraints, or the nature of specific production processes contribute to the persistence of these emissions. This is where carbon offsetting with carbon credits comes into play.
Carbon offsetting with carbon credits
Carbon offsetting involves funding carbon credit projects that reduce or remove greenhouse gas emissions equivalent to those generated by the business. These projects can range from renewable energy initiatives to tree planting projects. By supporting these projects, businesses can effectively compensate for their unavoidable emissions.
A carbon credit is a unit representing the removal of one metric ton of carbon dioxide equivalent from the atmosphere. Businesses purchase carbon credits from verified carbon offset projects. When a company offsets its emissions through carbon credits, it essentially purchases the right to emit a certain amount of greenhouse gases.
Best practice: Reducing and offsetting emissions
The most effective way to take responsibility for company emissions is to adopt a two-pronged approach:
- Reduction: prioritize strategies to minimize unavoidable emissions. This may involve investing in energy-efficient equipment, adopting renewable energy sources, and implementing sustainable practices across all operations. To read more about how you can reduce emissions read this knowledge article.
- Offsetting: for emissions that are unavoidable, offsetting through carbon credit projects is the best way possible. To learn about the importance of carbon offsetting, you can read this knowledge article.
In short, best practice is to work on reducing emissions while funding climate projects to offset residual emission. In this way, companies create an internal cost item that incentivises reductions, pay for the damage their emissions cause today, and have an impact beyond carbon, for example in terms of biodiversity and local job creation.
What kind of carbon credit projects exist?
There are various types of carbon offset projects, each targeting different emission sources and approaches. Carbon avoidance projects reduce or avoid emissions from their source. An example of this is renewable energy such as wind or solar energy that decreases fossil fuel dependency. These projects help to prevent emissions from being released in the first place, which is more effective than trying to remove them after they have been emitted.
Carbon removal projects, another carbon credit project type, are those projects that directly remove carbon dioxide (CO2) from the atmosphere. This can be done through a variety of methods, such as planting trees or using biochar to store carbon in soil. Carbon removal projects can help to offset emissions that have already been released, as well as reduce the amount of CO2 that is currently in the atmosphere. In general, carbon removal projects are more expensive than carbon avoidance projects.
Discover the carbon credit projects that Regreener supports on this page.
Conclusion
Carbon offsetting is a valuable tool for businesses to address their unavoidable emissions, that persist despite mitigation and reduction efforts. It is not the sole solution to climate issues but a tool in the sustainability toolkit. Offsetting is often done with carbon credits, where one carbon credit represents the removal or avoidance of one metric ton of carbon dioxide. The best practice involves both reducing and offsetting emissions. Only in this way can a company take full responsibility for its emissions, pay for the damage their emissions cause today, and have an impact beyond carbon, for example in terms of biodiversity and local job creation.
Are you interested in carbon offsetting? Feel free to reach out to us!
