Concepts of carbon neutrality
To limit the increase in temperatures to 1.5°C compared to the pre-industrial era, carbon neutrality must be achieved by 2050. GHG emissions generated by human activities have already raised the global temperature by 1.1°C since the industrial revolution, with catastrophic consequences. According to the IPCC, CO2 accounts for more than two-thirds of GHG emissions, and the use of fossil fuels is responsible for the majority of CO2 emissions. One of the main challenges of achieving carbon neutrality, therefore, lies in the dependence on fossil fuels.
The concepts of carbon neutrality, net zero, and carbon offsetting are often used to describe corporate efforts to reduce their GHG emissions. While closely related, there are important differences between these terms.
Carbon neutrality
Carbon neutrality combines "decarbonisation" and "carbon offsetting". Carbon neutrality can be achieved by reducing carbon emissions as much as possible and offsetting the remaining emissions by investing in emission reduction projects elsewhere. The ISO 14068 standard aims to formalise the management procedures concerning carbon neutrality and to prevent companies from erroneously claiming "carbon neutrality."
Carbon offsetting
This concept allows for the offsetting of emissions by funding storage or emission reduction projects elsewhere. This means that a company can continue to emit GHGs but compensates for its own emissions by paying for projects elsewhere (for example, financing reforestation or renewable energy projects). This approach is often used to achieve carbon neutrality. However, to avoid falling into "greenwashing", i.e., deceptively using ecological arguments to enhance one’s image, carbon offsetting should not replace efforts to reduce GHG emissions. It should only compensate for unavoidable emissions.
Net zero
The IWA 42:2022 standard defines "net zero GHG emissions" as the state in which the residual GHG emissions produced by human activities are balanced by removals resulting from human activities over a specified period and within specified boundaries. Removals resulting from human activities include ecosystem restoration, direct air capture and carbon storage, reforestation, and other effective methods. The company must demonstrate a clear commitment and that its objectives cover all GHGs (not just CO2).
Certification of carbon credits
Carbon offsets represent a credit (one tonne of CO2). The purchase of these credits allows companies to "offset" their unavoidable GHG emissions. These credits must be monitored and labelled to ensure that carbon credits are produced responsibly and transparently, and to give confidence to buyers looking to offset their GHG emissions.
The Certifications section of this guide lists the main carbon credit certifications. The price of carbon credits primarily depends on the projects (type, size, location, and implementation methodology).
