What is the difference between carbon neutral and net zero?

Intuitively, it might seem like the terms ‘net zero’ and ‘carbon neutral’ mean the same thing. They are often (mistakenly) used interchangeably, when in reality they refer to different concepts.

Both net zero and carbon neutrality refer to a state where carbon emissions have been neutralised, and rely on the use of high-quality to varying degrees.

However, it is important to note that carbon neutrality does not put any limits on GHG emission outputs and requires a far higher capacity for offsetting, whereas net zero typically refers to more rigorous emissions reduction efforts, with the aim of achieving a future where few residual emissions exist. But, both rely on solid efforts to measure, understand, and take action on organisational GHG emissions.

What does it mean?

• Net zero: Net zero refers to reducing all GHG emissions as much as possible – up to 90% – and tackling the remaining emissions with durable carbon removal.
• Carbon neutral: Achieving carbon neutrality involves offsetting GHG emissions, focusing mainly on carbon dioxide emissions. More achievable in the short-term compared to net zero.

What kinds of emissions does it cover?

• Net zero: Involves eliminating then offsetting all GHG emissions, including Scopes 1, 2, and 3 (the entire value chain).
• Carbon neutral: Focuses on compensating for CO2 emissions through reduction or removal initiatives, typically covering Scopes 1 and 2 emissions.

How does it work?

• Net zero: Requires a fundamental reduction in emissions through changes in technology, energy efficiency, and processes across all sectors and actively removing carbon from the atmosphere using technologies such as carbon capture and storage, or enhancing natural processes like afforestation and reforestation.
• Carbon Neutral: Focuses on reducing carbon emissions and compensating for the remaining emissions through offsets.

What are the relevant standards and certifications?

• Net zero: Science Based Targets Initiative's Net Zero Standard, Oxford Offsetting Principles for Net Zero Aligned Offsetting
• Carbon neutral: PAS 2060
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Carbon neutral vs net zero – which approach is better?

Net zero and carbon neutrality both have their strengths and weaknesses, and which approach is more appropriate depends on the circumstances of the individual case.

Below, we will take a closer look at the advantages and limitations of each approach.
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Net zero: advantages and limitations

Advantages:

• Comprehensive approach: Net zero encompasses all GHG emissions – not just carbon dioxide emissions. This makes it a more holistic approach to climate change mitigation.
• Encourages innovation: Because it requires significant changes and innovations in technology, business practices, and lifestyle, net zero is a driving force for long-term sustainability. 
• Aligns with climate goals: Net zero aligns closely with global climate goals – e.g. the Paris Agreement, which aims to limit global warming to well below 2°C.

Limitations: 

• Complexity and cost: Due to the need for systemic changes and potentially new technologies, achieving net zero is more complex and potentially more expensive than achieving carbon neutrality.
• Longer time frame: Net zero often requires a longer timeline to achieve, as it involves significant reductions in emissions across all operations. 

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Carbon neutrality: advantages and limitations

Advantages:

• Feasibility: Carbon neutrality is often easier to achieve in the short term because it allows for offsetting emissions rather than requiring immediate and deep cuts in emissions.
• Flexibility: Carbon neutrality provides flexibility for organisations that are unable to make drastic changes to their processes immediately.

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Limitations:

• Lacks guidance for reductions: Carbon neutrality does not give parameters for deep emission cuts. Thus, companies may rely heavily on low-quality offsets, which can sometimes be seen as a way to ‘buy’ environmental responsibility without making significant internal changes.
• Potential for greenwashing: Due to its lack of a robust methodology, companies may be accused of greenwashing for relying on the cheapest, fastest way to neutrality without ‘doing the work.’ 

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Which approach is better?

As mentioned above, the choice between net zero and carbon neutrality depends on the specific circumstances and objectives of the entity considering them.

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Net Zero:
Net zero is the preferred long-term commitment to sustainability that aligns with global climate targets, emphasising transparency and scientifically backed methodologies. It is best suited for organisations with the resources and capability to invest in innovative technologies and processes. Achieving net zero often carries a stronger public commitment, reflecting leadership in sustainability and enhancing brand reputation.

Carbon Neutral:
Carbon neutrality is a practical starting point for organisations, offering immediate, short-term reductions and valuable experience as long as genuine efforts are made. It is particularly suited for smaller entities or those with limited resources. While carbon neutrality still demonstrates responsibility and can positively impact public perception, it is increasingly seen as a stepping stone rather than a final goal.

However, carbon neutrality has fallen out of use as a claim due to anti-greenwashing regulations in the Nordics and EU. These policies such as the Green Claims Directive point to the weaknesses of carbon neutrality, including having no requirement for deep emission cuts or potentially incentivising the cheapest, quickest way to neutrality. This undermines integrity in offsetting and makes it more confusing for consumers to know what is a green product. Yet, aiming for neutrality is a great way to get started, gain experience alongside genuine efforts and pushes for transparency.

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Why is reaching net zero so important?

Reaching net zero is crucial for several reasons. If global emissions continue unabated at current rates, we are set to exceed 2°C of global warming, with severe consequences for society and the environment.

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The primary goal of reaching net zero is to limit global warming to well below 2°C, with efforts to limit the increase to 1.5°C. Achieving this goal is essential to prevent the most severe impacts of climate change, such as extreme weather events, rising sea levels, and loss of biodiversity.

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Tackling this crisis requires a multi-pronged approach, beginning with emissions reductions across Scopes 1, 2, and 3 where relevant, followed by carbon removal via thoroughly vetted credits.

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Carbon removal: A vital step on the road to net zero

Carbon removal technologies play a crucial role in achieving net zero emissions by actively removing carbon dioxide from the atmosphere. From afforestation to direct air capture, these technologies offer diverse pathways to sequester carbon and offset emissions.

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Among other things, carbon removal:

• Addresses residual emissions by capturing and storing an equivalent amount of carbon dioxide from the atmosphere
• Compensates for historical emissions that have accumulated over time
• Enhances natural carbon sinks through practices like reforestation, afforestation, and improved land management
• Bridges the transition to low-carbon economies by allowing time to develop and implement more sustainable technologies and practices

And much, much more.

Net zero targets have the potential to increase global carbon removal capacity, alongside reduction efforts. Multiple frameworks and certifications exist to guide and validate companies’ net zero claims. However, it’s crucial that companies do not overlook the need for high-integrity carbon removals alongside emission reduction.

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