If a company cannot eliminate all of its CO2 emissions, it can compensate them by acquiring carbon offset credits. Carbon offsetting is an inevitable tool created to help companies and individuals to make climate positive actions and at the same time fund initiatives that help clean the atmosphere from CO2 and fight climate change.
What is carbon offsetting?
Carbon offsetting is the process of compensating for GHG emissions produced by your company or organization, which cannot be removed or reduced. By purchasing a carbon credit, you buy a commitment from another organization to remove a certain amount of greenhouse gases from the atmosphere. Carbon offsetting is designed to allow companies and individuals to compensate for their unavoidable GHG emissions.
Offsetting is made possible through carbon credit generating projects, which are initiatives that help reduce the concentration of greenhouse gases (GHG) in the atmosphere. Such projects combat climate change, while also helping to improve people's living standards and solve pertinent social issues. Thanks to carbon offset projects, your company can offset emissions that are currently unavoidable, thus reducing the negative impact on the environment and achieving the set ESG goals.
The system of carbon credits is created not only to help companies compensate for their emissions but also to fund and encourage the creation of climate-friendly initiatives that may otherwise be unprofitable or not financially feasible. Through purchasing carbon credits, you reward and help to proliferate projects that benefit the planet and fight climate change.
How are carbon offset projects carried out?
Carbon offset projects are usually carried out by various NGOs. A typical carbon offsetting NGO that deals with environmental reforestation projects is located in South America. If an organization chooses to carry out the project according to certain verified methodology, then the project is eligible for carbon credits. Applying for credits involves project certification and various audits, which later are approved by a verifying organization, such as Verra or Gold Standard. Projects must meet certain rules, for instance, forestry projects must not cut down trees to make space for new plantations.
When implementing the project, developers must monitor its emissions or emission reductions according to the approved monitoring plan. An independent auditor reviews the monitoring documents, visits the project site, and confirms that its impacts are in line with the principles of the verifying organization. Once the final checks are done, the project verifier issues and registers the carbon credits, which then can be purchased by individuals or companies. Carbon credits can be reissued after a year based on calculations of emission reductions or removals.
What are the types of carbon offset projects?
Carbon offset projects can either be reducing existing carbon emissions or actively removing CO2 from the atmosphere. Emission reduction projects may involve using cleaner energy sources, or switching up old, polluting equipment with new, greener solutions. Such projects do not eliminate CO2, but only reduce the existing emissions. Carbon removal projects, on the other hand, are ones that actively remove CO2 from the atmosphere. Planting new forests, for example, sequesters CO2 and thus eliminates pollution.
Carbon removal processes can be natural, or technology based. Currently, the largest estimated potential for carbon removal comes from the natural capacity of crops, forests, and grasslands to remove and store CO2 from the air. Projects that involve planting trees or other plants are commonly chosen also for a variety of side benefits, such as preservation of ecosystems and habitats of endangered species.
Technology-based carbon offset projects artificially remove CO2 from the atmosphere. One of the most advanced current technology-based solutions is bioenergy with carbon capture and storage (BECCS), which captures and stores carbon emitted from burning biomass, such as in biomass-powered power plants. The carbon can then be stored or used in manufacturing, for example, carbonated beverages. Technology-based carbon removals are currently more expensive and operate on a smaller scale than natural carbon removals. However, they are expected to proliferate more in the future, once the scale of R&D in the field allows the technologies to become more cost-effective.
How to offset your carbon emissions?
Here are the main steps towards fully offsetting your carbon emissions:
• Calculate your carbon footprint
• Avoid the unnecessary carbon emissions
• Reduce all unnecessary emissions by as much as possible
• Choose carbon offset projects
• Buy carbon credits
• Monitor carbon emissions
Offsetting carbon emissions starts with estimating what part of your emissions can be avoided or reduced, and what part is unavoidable and therefore needs to be offset. After making an effort to avoid and reduce all unnecessary emissions, you can opt for carbon credits as a way to be accountable for your impact on the planet and produce positive social and environmental effects.
To choose a carbon offset project a company should decide what type of project would be the most suitable for it. The company can also set more criteria that would cover the region and size of the project, contribution to SDGs, etc. After choosing a project, all that remains is to buy carbon credits, which can be retired in the name of the company immediately or kept until it is necessary to retire them. In all this process the monitoring of carbon emissions will help to continuously maintain carbon neutrality.
What are carbon credit standards?
To ensure carbon credits quality many methodologies, protocols, and guidance documents for carbon offset projects have been developed. However, several standard programs have emerged, such as Verified Carbon Standard (Verra) and Gold Standard, which are international NGOs that apply UN methodologies in their activity and now are recognized and used globally.
These non-profit organisations work as a standards which consist of accounting methodologies, independent assessment, and registry. These key functions allow to ensure the eligibility of projects, and help to monitor, report, verify and certify a project’s performance. Once the projects are implemented, standards confirm the actual GHG reductions and register them. Standards databases with project information are beneficial for ensuring transparency and avoiding double-counting.
Verified Carbon Standard – VERRA
VERRA was founded in 2007 out of necessity to ensure greater quality in voluntary carbon markets. Verified Carbon Standard program is the most widely used voluntary GHG program in the world. Counting from the beginning about 2000 certified VCS projects from individuals and corporations have reduced or removed 957 million tonnes of GHG emissions from the atmosphere. Verra administrates and develops the VCU program so it is always improving and evolving to meet current planet needs as best as possible.
Gold Standard
Gold Standard was founded in 2003 by international NGOs to guarantee that carbon offset projects meet the highest environmental standards and contribute to sustainable development. The standard was launched based on Paris Climate Agreement and Sustainable Development Goals. From the beginning about 2300 certified collectively reduced or removed 195 million tonnes of GHG emissions from the atmosphere. Gold Standard with the mission to catalyse more ambitious climate action to achieve the Global Goals raised a bar for all future climate projects.