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What are carbon offsets?

Carbon offsetting

Carbon credits are given to projects that can scientifically prove that due to their implementation they have removed or avoided greenhouse gases from entering the atmosphere. One credit is given to every tonne of these gases removed or avoided.

Carbon offsetting is the process of buying and retiring carbon credits to mitigate your company/product/individual carbon footprint.

As the effect on the climate is the same wherever greenhouse gases are emitted, avoided or removed. Once a company has measured its footprint and reduced its emissions as much as possible, there is scope to take responsibility for your current footprint and to re-balance or ‘offset’ the emissions.

There are a plethora of different offset projects, creating carbon credits across the globe. Offsets can vary in price based on the project that creates them and the volume of offsets available and bought. Project type, location and the additional social, community and biodiversity benefits can all affect attractiveness to different buyers subsequently affecting their price.

Carbon offsets can be divided into two groups:


Carbon avoidance credits are produced by projects which prevent emissions from entering our atmosphere. These projects must demonstrate that without their implementation greenhouse emissions would have occurred and that the carbon finance was essential for the project to have taken place.

Avoidance credits form the vast majority of available credits and are used for annual carbon offsetting for carbon neutrality. There are a wide array of project types to support, such as:

  • Forest conservation
  • Renewables – wind, solar and hydro
  • Biomass and biogas
  • Improved cookstove programmes
  • Waste management and recycling
  • Energy efficiency


Carbon removal credits are produced by projects that remove and permanently store greenhouse gas emissions from the atmosphere. These projects remove harmful gases from the carbon cycle and should be encouraged if we are to achieve our net zero ambitions. Huge efforts are being made to develop nature-based and technology-based removals and volumes will begin to increase in the coming decades. Nature-based removals offer the best access and affordability for organisations today.

Nature-based removals

  • Afforestation/reforestation
  • Soil carbon sequestration/regenerative agriculture
  • Biochar

Technology-based removals

  • Direct Air Carbon Capture and Storage
  • Bio-Energy Carbon Capture and Storage

What is the difference between carbon neutral and net zero offsetting?

  1. Both pathways must encourage emission reductions, however carbon neutrality can be achieved from year 1 whereas net zero requires demonstration of annual reductions towards a net zero target date.
  2. Carbon neutrality can be achieved for a product, service, event, individual or company. Carbon neutrality must include scope 1 and 2 emissions but scope 3 emissions are discretionary.
  3. Net zero must be achieved from organisational perspective and include all three emission scopes.
  4. Carbon neutrality can be achieved annually whereas net zero is seen as a long term target to work towards.
  5. Residual emissions can be addressed with avoidance and removal offsets to achieve carbon neutrality whereas only removal offsets can be used in net zero claims.
  6. All offsets demonstrate an atmospheric reduction in greenhouse gases, whether prevented or removed. As climate change is a global issue, one tonne of greenhouse gases emitted is relative to another avoided or removed no matter where it takes place.
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Why offset your carbon emissions?

By purchasing carbon offsets, you are joining many others supporting global efforts to reduce greenhouse gas emissions and investing in a marketplace that will drive the development of carbon removal technologies, helping us move to net zero emissions globally by 2050.

Positive climate action through offsetting is viewed favourably by stakeholders, customers and the wider community. You can market your actions to stakeholders, to encourage others, including your supply chain, to also act responsibly and to distinguish yourselves amongst your competitors, challenging them too.

Furthermore, you can use your offsets to help achieve the following:

Corporate social responsibility (CSR) goals

Net zero

Carbon neutrality

Sustainable development goals

Increased environmental social and governance (ESG) rating

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