Monday 13 December 2021

What is carbon offsetting and how does it work?

What is carbon offsetting and how does it work?

To meet ambitious net zero goals, countries, businesses and communities must now pull together to counteract carbon emissions, through practises such as carbon offsetting.

While reducing emissions is key to sustainable decarbonisation, the transition to a low-carbon economy will take time. It can be a challenge to avoid or reduce emissions, given our current infrastructure and technology. Carbon offsetting can help businesses in the short term and foster restorative projects that will act as natural carbon sinks for centuries to come.

So, what is carbon offsetting, and how is it beneficial?

How does it work?

The planet has a natural way of ensuring atmospheric balance. Emitting CO₂ from wetlands and forest fires, the Earth absorbs it again through trees, soil and oceans. But unfortunately, an unsustainable growth in the population, along with the industrial revolution and the continued exploitation of natural resources, have all contributed to the disruption of this natural cycle.

Modern practices have resulted in excessive amounts of greenhouse gases being pumped into the atmosphere, destroying our natural carbon sinks. This has made it harder for the Earth to heal itself. By investing in carbon offsetting projects, individuals and businesses can keep their carbon footprint low. In addition, they will be supporting carbon sequestration projects, which are largely located in developing economies.

If carbon emissions are released through business activity, these companies can purchase carbon offset credits to balance out their emissions elsewhere in the world. Essentially making that activity carbon neutral.

Offsetting projects fall into 3 main categories:

  • Emissions removal – These projects actively remove or sequester carbon, usually through the planting of trees or mangroves which are natural absorbers of carbon.
  • Emissions avoidance – These projects avoid greenhouse gas emissions that would otherwise be released into the atmosphere. For example, nature conservation, renewable energy, and the distribution of efficient cookstoves in developing countries.
  • Emissions capture – Similar to emissions removal, although not nature-based. For example, capturing methane from wastewater or landfills.

The benefits of carbon offsetting

Carbon offsetting allows individuals and businesses to take responsibility for their emissions, by offsetting what they emit.

Reducing your carbon emissions in this way can also give a much needed boost to your green credentials. As consumers become more aware of their environmental impact, they will also become attracted to businesses sharing the same ethos. Demonstrating your commitment to becoming environmentally friendly could also entice new investors, who are looking to work with environmentally responsible organisations.

Investing in carbon offsetting could also help to secure funding for environmental projects that would otherwise struggle to get off the ground. These projects are often in developing countries and contribute to sustainable development, in addition to reducing greenhouse gas emissions. Carbon offsetting projects include a 15MW solar power plant in Gujarat, India and a reforestation project in Fazenda Sao Nicolao, Brazil.

How can EIC help?

At EIC, we understand that your corporate social responsibility credentials are key to maintaining the reputation of your business. We offer a comprehensive Carbon Management Plan service, ensuring that your business is transparent and accountable with regards to its carbon emissions.

We can help you to formulate an effective carbon management plan. As well as helping you to set carbon reduction targets, measure emissions and monitor your progress on an ongoing basis.

In addition, we offer a verified carbon credit scheme to assist you where you may require carbon offsetting to supplement your emissions reduction strategy.

Download our new guide to read more about how carbon offsetting could benefit your business. Or get in touch to find out how we can help you to become compliant.


Written by

Bruna Pinhoni

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