What is Carbon Reduction & Offsetting?
Carbon reduction is a process where an organisation directly reduces greenhouse gas emissions through efficiencies, whilst carbon offsetting is a trade-off, where companies can get credits for funding external projects that reduce emissions. These processes will form part of the Carbon Reduction Plan for a specific CAB member company on their Journey to Net Zero.
What is offsetting?
Offsetting is the use of GHG emission reductions or removals to compensate for current organisation CO2 / GHG emissions.
A CAB member company will need to put in place offsetting for the residual GHG footprint, whilst undertaking projects under their Carbon Reduction Plan (Carbon Footprint Management Plan), to balance out what’s not (yet) been reduced to make the members’ Net Zero claim numbers balance1.
Fig 1. Are you ‘Net Zero’ or are you on a ‘Journey to Net Zero’?
It is considered best practice to only claim to be ‘Net Zero’ at the point at which you’ve achieved the reduction strategy originally pledged. For example, under SBTi this might mean hitting a 50% near-term 2030 or 90% long-term target for in-house reductions by 2040, and purchasing credits to ‘offset’ the final 10% for that year and subsequent years. The likes of SBTi and Oxford Principles require you to purchase credits to meet that residual 10% through removals credits only.
- Anything up until that point would be defined and communicated as ‘journey to net zero’
- Whilst on a company’s ‘journey to net zero’, you can still purchase credits to compensate against residual emissions, to make a claim of offsetting / carbon neutrality. Further detailed information may be found in BSI PAS2060:2014 – Specification for the demonstration of carbon neutrality, available from the BSI website. British Standards can be obtained from BSI Knowledge knowledge.bsigroup.com
Specialist Partner – Forest Carbon
On this basis CAB have partnered with a nature-based partnerships & projects specialist for carbon capture and ecosystem services, Forest Carbon. To enable CAB members to access offsetting projects in the UK and internationally, in addition to those available from our environmental consultant.
- Forest Carbon was established specifically to support the creation of new woodlands in the UK on behalf of businesses in recognition of their carbon footprints.
- Forest Carbon was at the forefront of developing the UK natural capital and carbon market, being architects of and first users of the government’s UK Woodland Carbon Code launched in 2011 and the UK Peatland Code launched in 2016.
- To date (July 2023) Forest Carbon has created over 200 new UK woodlands, totalling 12 million trees and covering 16,500 acres (plus 11 woodlands in Ireland, for Microsoft, and a further 1 million trees elsewhere). Projects range from approx 5 to 500 acres in size. In addition we have restored 5 peatlands totalling 2,455 acres.
- Partners range from FTSE listed businesses to small enterprises. Forest Carbon has a further 100+ woodland projects under development, with more coming forward all the time. Forest Carbon invests in supporting these new woodlands at its own risk.
- In addition to this UK and Ireland activity Forest Carbon has enabled over 1,500,000 tonnes of nature based carbon capture around the the world through partnerships with our peer project developers and investors in other countries.
Invest in a UK Nature based project or an International Project?
Here in lies the dilemma, in terms of UK projects: These projects are new, and nature takes time to store CO2, the carbon credits arising demonstrate ownership of future carbon savings. Because of this an investment in a UK project cannot be used for claims of carbon neutrality – as the carbon savings have not yet occurred.
International projects: The global carbon market is older than that in the UK, and encompasses different project types. In this light projects are mature enough to have delivered carbon savings, and so the credits can be used for offsetting statements.
UK nature based projects, certified under the Woodland Carbon Code or the Peatland Code
New UK woodland creation or peatland restoration projects, certified under the UK government backed Woodland Carbon Code or Peatland Code respectively. Both standards offer assurance to ISO 14064/5, and provide certainty around quality of project design and implementation, carbon mitigation estimates, long term monitoring, and additionality (the need for carbon funding for the project to have proceeded). Carbon credits created by certification under these standards are listed on the UK Land Carbon Registry – operated by S&P Global – providing transparency around project status and credit ownership.
International nature base projects, certified under Verra VCS or Plan Vivo
Forest creation, forest protection, peatland protection projects in South America and Indonesia, certified under world leading carbon offset standards Verra and Plan Vivo. Both standards provide certainty around quality of project design and implementation, carbon mitigation estimates, long term monitoring, and additionality (the need for carbon funding for the project to have proceeded). Carbon credits created by certification under these standards are listed on the Verra Registry, or the Plan Vivo registry- operated by S&P Global – providing transparency around project status and credit ownership.
Examples of claim wording:
UK offsetting projects: “In recognition of our carbon footprint for [state year] we have made an investment in UK nature, in the form of woodland creation at [Project name]. Over time this woodland will not only recapture our CO2, it will also provide landscape, biodiversity, water quality, flood mitigation and employment benefits to the UK. Projects are certified under the UK Woodland Carbon Code, and you can find a record of our investment here on the UK Land Carbon Registry.”
International offsetting projects: “To offset our carbon footprint for [state year] we have made an investment in global nature, in the form of a forest protection project in [Country name], at [Project name]. As well as offsetting our carbon, this project will provide biodiversity and employment benefits locally. Projects are certified under the [Standard name], and you can find a record of our investment here on the [Name] Registry.”
CAB members will need to publicly display their Carbon Reduction Plans, say on their website, which will need to include information pertaining to offsetting and GHG emissions figures for the given year.
GHG emissions figures are historical previous year (not as a future estimate of the coming year), to substantiate their claim as a Carbon Neutral organisation. Remember – it’s the organisation’s GHG footprint, not the products that is the basis of a Carbon Neutral claim, as noted above, it is considered best practice to only claim to be ‘Net Zero’ at the point at which you’ve achieved the reduction strategy originally pledged.
CAB member companies will need to show certification for offsetting, including Certificates of Retirement against the specific nature based project that has been invested in, in a given year. GHG inventory calculations must be carried out on an annual basis and offsetting put in place for the residual footprint, until the footprint has reached net zero.
Please refer to the above process flow, extracted from PAS2060:2014. Permission to reproduce extracts from British Standards is granted by BSI Standards Limited (BSI). No other use of this material is permitted. British Standards can be obtained from BSI Knowledge knowledge.bsigroup.com
CAB’s team can help with explanations of the above, please don’t hesitate to contact the CAB office, either via the office landline 01453 828 851 or contact: firstname.lastname@example.org