Understanding carbon offsets

When discussing carbon offsets, it’s essential to distinguish between two primary categories: carbon avoidance and carbon removal.

Carbon avoidance projects aim to reduce future emissions. Examples include protecting forests from deforestation, developing renewable energy sources like wind or solar, and introducing energy-efficient technologies such as clean cookstoves. These initiatives are beneficial, but they don’t actually remove existing greenhouse gases (GHGs) from the atmosphere; they only prevent additional emissions from occurring. As a result, the net emissions remain the same, and no negative emissions are generated.

Carbon removal methods, on the other hand, actively extract GHGs from the atmosphere, resulting in negative emissions. This can include technologies like Direct Air Capture (DAC) or nature-based solutions like reforestation.

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Key Differences between avoidance and removal:

• Carbon Avoidance prevents future emissions, while Carbon Removal extracts existing CO₂ from the atmosphere.
• Carbon avoidance helps slow down the accumulation of CO₂, whereas carbon removal actively reduces the total atmospheric concentration of CO₂.
• Both are crucial for addressing climate change, but removal is particularly important for long-term goals like reaching net zero and reversing global warming.

The critical advantage of removal methods is that they address existing emissions, making them more effective for companies aiming to achieve Net Zero. This is the the only pathway to stall warming, as they tackle previous and current emissions that are already warming the climate.

On the other hand, recent news has highlighted issues with avoidance-based credits for lacking quality, integrity, and additionality. This clouds the overall integrity of these types of programs due to inability to measure baselines and prove their additionality. With these issues in mind, companies that hope to avoid future risk and remain ahead of the curve must invest solely in removals.

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Taxonomy of carbon credits.

The difference between the majority of carbon credits is whether they remove or avoid carbon. However, carbon removal credits actually differ in many different ways. The variations in method, storage location and type, and climate all affect the way and length of time carbon is stored, or their risk of re-releasing that carbon back to the atmosphere.

Short-term vs. long-term carbon removal

Removals can be further categorised based on their permanence—whether the removed CO₂ is stored for the short term or the long term. Long-term removal methods, which often have a permanence of hundreds to thousands of years, are essential for tackling the long-lasting impact of existing emissions. These methods are more aligned with emerging regulations and the Science Based Targets initiative (SBTi), which increasingly require the use of long-term removals to substantiate Net Zero claims.

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Why shift towards permanent carbon removal solutions?

The Oxford Offsetting Principles emphasise the need to transition gradually but steadily towards permanent carbon removal solutions.

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“An immediate transition to 100% carbon removals is not necessary, nor is it currently feasible, but organisations must commit to gradually increase the percentage of carbon removal offsets they procure with a view to exclusively sourcing [permanent] carbon removals by mid-century.”- Oxford Offsetting Principles

This transition involves two key shifts:

1. From avoidance to removal: Avoidance methods, while useful, do not contribute to negative emissions and are becoming less favoured as regulations tighten. As we move forward, the focus should increasingly be on removal strategies that directly counterbalance emissions.
2. From short-term to long-term removal: Long-term solutions provide a more reliable and permanent solution to GHGs, ensuring that emissions are not only offset but effectively neutralised for the foreseeable future.

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Challenges and the path forward

Transitioning from avoidance to removal, and from short-term to long-term removal, is challenging and cannot happen overnight. The carbon market must rapidly scale up removal technologies to meet the growing demand for permanent solutions. At the same time, companies must be proactive in aligning their carbon offset strategies with upcoming regulations, which are not expected to allow the use of avoidance credits for Net Zero claims.

The key takeaway is that while avoidance projects have played a role in reducing potential future emissions, they do not address the urgent need to remove existing GHGs from the atmosphere. For a credible path to Net Zero, the focus must shift towards removal methods, particularly those that offer long-term permanence. This approach will ensure that companies not only meet regulatory requirements but also contribute meaningfully to the fight against climate change.

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