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Carbon offsetting: What you need to know

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carbon offsetting

A carbon offset refers to a credit that an organization or individual can purchase to reduce their carbon footprint. Once the carbon offset credits are equal to your business’s carbon footprint, your company is considered to be carbon-neutral. Income that you generate from buying carbon offsets is usually, though not always, invested in some projects that are environmentally friendly.

By now you may be asking yourself, what is carbon offsetting? Carbon offsetting is any decrease of greenhouse gas emissions so that you can make up for emissions that happen elsewhere. Therefore, carbon offset credits can show that your business has reduced its remissions. Remember that you can use the term carbon offset to describe both the act of carbon offsetting and the credit. A carbon offset credit can be an emission of at least one metric ton of carbon dioxide. The purpose of carbon offsetting is to lower a portion or all of the carbon footprint. This article discusses carbon offsetting.

Understanding carbon footprints

A carbon footprint is simply an amount of carbon dioxide as well as other greenhouse gas emissions that organizations and individuals generate. It can include both direct and indirect emissions. Remember that a direct emission comes from sources that reporting businesses own. For instance, carbon dioxide from the combustion of fossil fuels inside delivery trucks your business owns. On the other hand, indirect emissions can come from your company’s activities, though they can also come from sources your company doesn’t own. They are sometimes called either upstream or downstream activities.

You should note that producing t-shirts can create indirect emissions at different points in the supply chain. This includes growing the cotton, shipping raw materials, and the final product. Besides these, the decomposition of materials in landfills can also cause indirect emissions. This indirect emission contributes to both the carbon footprints of the producer and consumer.

Companies and individuals tend to comply with regulations or volunteer to pursue carbon offsetting. A company can choose to pay brokers to get rid of portions of carbon from the atmosphere. Usually, it can be in another country. You can calculate your carbon emission levels, and the broker charges a certain fee that depends on these levels. The broker can then invest some of the cash in a project that lowers carbon emissions.

For instance, you can take a flight that releases a specific amount of greenhouse gas into the atmosphere. You can utilize a tool to calculate the gas emissions that the flight released and then purchase a carbon credit from any broker to offset this amount of emissions. The potential broker can then subtract its fee and utilizes the rest of the cash to invest in emission projects like a reforestation project.

When you buy a carbon offset, you receive a certificate or anything that stands as proof of your initiative. You can then utilize it as proof that you have shown compliance with regulations.

Steps to help you offset your carbon emissions

There are a couple of steps that your company can take to offset the carbon emissions. You can calculate and measure emissions. Keep in mind that there are some protocols that can help your business to do this. For Example, the GHG Protocol is a globally recognized accounting standard that can help your company to measure and manage greenhouse gas emissions.

This protocol splits emissions into three scopes or areas. This includes scope 1 which is direct emissions from sources your company controls or owns. There is cope 2 which is indirect emissions from steam, electricity, heating, and cooling resources your company purchases. The last one is called scope 3 which are other indirect emissions that originate from your company’s value chain.

Remember that the emission can be expressed in tons of CO2 equivalent and may include other greenhouse gas emissions like nitrous oxide and methane. Companies should always regularly check their carbon footprints and highlight them in sustainable reports as well as other reports.

There are at least forty countries that require these emission reports. For instance, some countries set up a minimum amount of metric tons of carbon dioxide emissions that companies have to report annually.

Another step is to reduce carbon emissions. When your company measures its carbon emissions and identifies the sources, you can develop sustainability strategies. You can find guidelines for lowering emissions that are listed in the Science-Based Target Initiative. This initiative has guidelines that work well with the Paris Agreement’s goals. You should note that the Science-Based Target Initiative recommends companies to utilize eighty percent renewable electricity by 2025. You can also lower carbon in smaller ways via individual actions like using cars and trains that have hybrid locomotives.

Also, you need to offset emissions. Emissions that you cannot lower outright can be offset. It’s worth noting that reduction projects refer to the ones that absorb or remove carbon dioxide. A project needs to be certified to have carbon credits.

Carbon reduction is the goal of offsetting. Therefore, businesses need to reduce their carbon emissions before they decide to offset. When certified, a third-party monitoring entity can verify that your project meets the criteria. The criteria can include meeting net-positive emission removal. A credit has to represent emission reduction or removal that may not have occurred otherwise. You should remember that this needs monitoring of your company so that you can inspect and make sure that your project is utilizing verified science and methodologies in your calculations.

Another criterion is to check that there is no leakage. Creating a carbon credit should not lead to emissions elsewhere. For instance, if there is a forest that is projected by your project, then another unprotected area should not experience a rise in deforestation because of this.

Lastly, a credit represents an emission reduction that is irreversible. For instance, a project may want to store carbon underground. There is a small chance that this carbon can find its way back into the atmosphere.

In conclusion, your company needs to opt for a certified offset project that gives credits that meet these criteria. Aside from this, you should opt for a project that meets your social and environmental criteria like supporting biodiversity.

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Kossi Adzo is the editor and author of He is software engineer. Innovation, Businesses and companies are his passion. He filled several patents in IT & Communication technologies. He manages the technical operations at

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