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Although offsetting and becoming carbon neutral are often used interchangeably, they are not the same thing. Offsetting is a crucial aspect of achieving Carbon Neutral Certification, but it is vital to understand the distinctions between them to generate reliable measurements and carbon reports for an organisation.

What is Carbon Neutral?  

An organisation can achieve carbon neutrality by either reducing its emissions or purchasing carbon offsets, which neutralise the impact of its carbon footprint. This requires the organisation to measure both direct and indirect emissions and quantify them in tonnes of carbon dioxide equivalent for a reporting period, typically one year. 

A recognised standard like the Greenhouse Gas Protocol is usually followed for the calculation. After implementing emission reduction initiatives, any remaining emissions are offset through the purchase of carbon credits. To achieve carbon neutrality, the quantity of carbon credits purchased must be equal to or greater than the organisation's total emissions inventory.

Although reducing emissions from significant sources is vital, it's nearly impossible to eliminate an organisation's entire emissions inventory. Therefore, offsetting any remaining carbon emissions is a mitigation strategy that lowers the overall impact. Through the purchase and retirement of carbon credits, an organisation can become carbon neutral.

What is carbon offsetting?  

To compensate for the release of Greenhouse Gas (GHG) emissions, organisations employ carbon offsetting, which involves using environmentally beneficial projects such as wind farms, forest regeneration, or energy efficiency to reduce, remove, or avoid greenhouse gas emissions in the atmosphere. Carbon credits are generated through these projects by comparing the emissions from the project to what would have happened if the project did not exist. Each carbon offset signifies one tonne of carbon dioxide equivalent (t CO2-e) that has been reduced, avoided, or removed. Carbon credits are created under government and international programs, using approved quantification methodologies.

To claim the benefits of a carbon credit, an organisation must buy and retire it. When a carbon credit is bought and retired, it offsets one tonne of CO2-e from the organisation. Therefore, by purchasing and retiring a sufficient number of carbon credits that equates to the organisation's emissions inventory (tonnes of CO2-e) for a certain period of time, the organisation is claiming reductions from the offset project(s). While it's hard to completely eliminate an organisation's emissions inventory, carbon offsetting helps reduce an organisation's overall impact.

How is Carbon Neutral Certification different from offsetting

One misconception about Carbon Neutral Certification is that it only involves measuring and offsetting carbon emissions. However, this certification demands a series of steps that go beyond these two activities. While there are numerous free online carbon calculators available, they lack the stringent requirements necessary to ensure accurate and credible carbon neutral claims. To address this issue, standards have been established by various entities to enable organisations to have audit-ready and certifiable emissions inventories recognized by international standards. Carbon Neutral Certification requires a methodical process that ensures credible achievement of carbon neutrality.

The main difference between Carbon Neutral Certification and simply purchasing carbon credits to offset emissions is the level of credibility and recognition involved. For Carbon Neutral Certification, an organisation must measure its carbon footprint, actively reduce emissions as much as feasible before offsetting emissions, and reflect its carbon-neutral status for a total reporting period of 12 months. In contrast, an organisation can purchase carbon credits to offset some of its emissions without following these requirements. However, doing so will not earn official recognition, though it can contribute to a smaller overall carbon footprint.

Becoming Carbon Neutral Certified showcases an organisation's long-term commitment to sustainable action, provides a clear picture to stakeholders, and reflects a positive image of the organisation. While additional steps are required, including implementing measures to reduce emissions, this ensures that the carbon neutral claim is credible and that the organisation is serious about reducing its environmental impact. Carbon Neutral Certification also offers additional benefits such as a carbon-neutral badge, a range of marketing assets, and a better understanding of climate-related risks.

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