Moving from carbon neutral to net zero

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'Net zero' and 'carbon neutral' are two terms that are often used interchangeably. Both refer to the balancing of emissions, but they differ in several ways.

With so many companies claiming to have achieved net zero or carbon neutrality, it's important to understand the difference between the two, and the benefits of net zero over carbon neutrality. This is made all the more important by the news of an incoming EU ban on consumer products’ claims of carbon neutrality that rely on offsetting.

This quick-read will outline the terms and give high-level options to explore when considering both approaches.

What does carbon neutral mean?

The parameters for carbon neutrality are set out in the PAS2060, which is an internationally recognised standard upheld around the world.

If an activity or an event is considered carbon neutral, then it has no net carbon emissions. Emissions will be compensated for by offsetting with carbon credits.

Carbon neutrality is achieved when the amount of carbon dioxide emitted is equal to the amount removed from the atmosphere. CO2 removalis evidenced by carbon credits. Companies can therefore purchase carbon creditsto offset their emissions without having to make a discernible effort to reducethe carbon they emit.

Crucially, carbon neutrality is a term that can be applied at different levels. A company can be carbon neutral, but a certain product or service can also be neutralised more specifically. Net zero, on the other hand, is a phrase applied to the entire company.

What does net zero mean?

If a company is to reach net zero, it must reduce its emissions as much as possible. This could involve switching to renewable energy sources, improving efficiency, or utilizing green technologies. Any remaining emissions recorded should be compensated for through carbon removal activities that extract carbon dioxide from the atmosphere, such as planting trees.

Net-zero is a longer-term operation, where emissions reductions should be prioritised and any necessary offsetting should be minimised as much as possible.

Carbon reduction versus carbon removal

Carbon reduction is the process of reducing the amount of carbon dioxide released into the atmosphere from human activities, such as burning fossil fuels. To reduce carbon emissions, a firm could:
·       Choose to use cleaner energy sources
·       Use electric vehicles
·       Upgrade heating systems
·       Recycle
·       Optimise processes and improve efficiency

Carbon removal is the process of actively removing CO2 from the atmosphere. This is typically done through the uptake of carbon from the atmosphere by plants and trees. To remove carbon, a firm could:
·       Fund reforestation or afforestation initiatives to plant more trees
·       Endorse blue carbon initiatives to expand oceanecosystems that remove carbon dioxide from the atmosphere
·       Displace carbon from the atmosphere into the ground through soil carbon sequestration and biochar techniques
·       Capture carbon from the environment using Direct Air Capture (DAC) or Bioenergy with Carbon Capture and Storage (BECCS)

To achieve carbon neutrality, emissions can be offset through carbon reduction measures, as well as through carbon removal. However, to achieve net zero, a company must remove carbon.

Looking to the future

Carbon neutrality is considered a short-term fix,whereas net zero aids broad sustainability goals that seek to reduce global warming and limit emissions. This is in line with the 1.5 degrees pathway established in the Paris Agreement.

Carbon neutrality alone will not allow us to collectively adhere to the 1.5 degree pathway. If a company has the resources available, it should seek to strive for net zero. Robust ESG reporting systems allow companies to not only track and evidence their progress towards either carbon neutrality or net zero. These systems also reveal areas for improvement, helping decision-makers to identify new ways in which emissions could be mitigated, reduced, or eliminated altogether.

To see how your emissions could be improved, book a demo of KEY ESG's innovative and intuitive software. For tips and tricks on how to reduce your emissions, feel free to contact one of our experts!

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