What is Carbon Neutral?

Carbon neutral describes the balance between the total carbon emissions produced and absorbed by an organisation as part of tackling climate change. To achieve this condition, the carbon emissions emitted by the entity should not exceed the capacity of natural carbon sinks (e.g. the ocean, soil, and forests) to absorb them. Especially for most companies in which producing zero carbon emissions is close to impossible, the number of carbon emissions produced is equally offset to reach carbon neutrality.

Carbon Neutral vs. Net Zero

While the terms ‘carbon neutral’ and ‘net zero’ are sometimes used interchangeably, their strategies are not the same when it comes to greenhouse gas emissions. Both concepts are in pursuit of a balance of emissions, but the implications and approaches that come with each of these differ significantly.

• Carbon neutral focuses on offsetting carbon emissions: This approach allows companies to balance the emissions they produce by supporting initiatives that either reduce or eliminate carbon, for example, planting more trees or buying carbon credits. This does not necessarily require companies to reduce their emissions at the source. They can simply balance it out by compensating for it elsewhere.
• Net zero prioritises cutting emissions first: This means that the lowest possible level of emissions must be targeted at the source before any offsetting is undertaken. This encourages companies to make use of less polluting technologies and more environmentally friendly processes in an overall emission reduction, rather than just balancing them out.
• Carbon neutral is often used as an intermediate goal: Companies are known to adopt carbon neutrality as the first stage of their sustainable development agenda. In that case, the companies start by estimating and offsetting their emissions, although they do expect to achieve net zero eventually by reducing their overall emissions.
• Net zero is the broader goal: As is apparent in the global goal of reaching net zero by 2050, it aims to eliminate as much greenhouse gas emissions, including carbon dioxide gases, and seeks no additional emissions in the atmosphere. In situations where companies cannot achieve full elimination, they can resort to offsetting the remaining unavoidable emissions.
• It is possible to become carbon neutral without making changes to one’s sustainability policies: The principles put forward under carbon neutral do not require a transition to green energy or sustainable practices. The emphasis is on compensating for emissions. This is quite different from zero net emissions which requires substantial changes and improvements in energy efficiencies and transitioning to better energy sources.

Carbon Neutral Examples

These are some illustrations of the decarbonisation initiatives that companies are implementing to reach carbon neutrality:

• Reforestation Projects: Tree planting projects need to be embraced by companies as a model for carbon reduction. Since trees are the plants most efficient in absorbing carbon dioxide, reforestation will always be the easiest way to reach carbon neutrality while also reducing environmental footprint.
• Carbon Offsetting Programs: Purchasing carbon credits, such as certified emission reductions, compensates for the carbon emissions caused by a company’s activities. These projects are able to receive funding for environmental endeavors such as renewable energy or capturing and storing carbon which assist in the overall sustainable developments.
• Transitioning to Green Energy: Companies can reduce their dependency on fossil fuels by incorporating wind, solar, and other technologies to power operations. Such a transition reduces emissions and also makes financial sense in the long run, since the demand for cleaner energy will only grow.
• Recycling and Minimising Waste: Encouraging waste management options such as recycling and composting can greatly reduce the emission of methane from landfills. This is important, especially for industries with the largest amount of waste, as it can assist in reducing the net carbon footprint.
• Monitoring and Reporting: Proper measurement, documentation, and analysis of emissions are imperative for companies in determining the extent of achieving carbon neutrality. Companies may be able to pinpoint essential improvements by measuring emissions through carbon accounting and assessing carbon reduction goals and developments with sustainability reporting.