The Difference Between Carbon Neutral and Net Zero

There is a lot of discussion about the terms “carbon-neutral” and “net-zero” these days, with many organisations and enterprises claiming to have achieved either one, or even both, of these goals.

In the corporate world, these terms are frequently used indiscriminately and inconsistently, making it difficult to figure out what they imply and how to apply them effectively. Definitions for the terms “carbon-neutral” and “net zero” are considerably different, and it is critical to understand the differences between the two. So, what exactly is the distinction?

Definition of carbon neutrality and net zero

Carbon-neutrality refers to the purchase of carbon reduction credits that are equal to the amount of carbon dioxide emitted, without the requirement that any emissions reductions have taken place.

Net-zero means reducing emissions in line with the latest climate science and balancing remaining residual emissions through carbon removal credits.

As the fight against climate change becomes more important, the private sector’s role in decarbonising and reducing emissions is becoming increasingly important. The climate emergency is now accepted, and the level of ambition demonstrated by governmental climate action committees has led to increasingly committed programs such as the UNFCCC’s Race to Zero Campaign or Carbone 4’s Net Zero Initiative in France, which are both aimed at achieving net zero emissions.

The Impact of the Paris Agreement

The Paris Agreement, signed in 2015, established a global framework for avoiding the severe consequences of climate change by keeping global warming far below 2 degrees Celsius. In order to be in alignment with this goal, we must achieve collective carbon neutrality by 2050, which is the purpose of the agreements previously outlined. However, how can individual organisations play a critical part in this endeavour?

Economic actors are progressively attempting to achieve a variety of climate-related objectives, most of which are due by 2030 or 2050. Their promises use a variety of net zero terminology, such as carbon neutrality, net zero, and carbon negative, to describe their efforts. These are the three most important concepts that organisations and countries employ. Despite the fact that they are similar, there are subtle variances that must be considered.

Differentiating net zero emissions

Furthermore, it is critical to emphasise that there is a distinction between net zero emissions at the company level and worldwide net zero emissions. While professing to be neutral, a firm is making a positive contribution to global neutrality. A company’s efforts to achieve carbon neutrality are constrained to mitigating its own greenhouse gas (GHG) emissions. The key difference is that global neutrality refers to the fact that there is a balance between global emissions and absorptions.

The UK and the EU are the world leaders in the drive to net-zero emissions, and COP26 held in Glasgow in 2021 certainly solidified the zero carbon targets through emission reduction initiatives.

Which emissions scope are we talking about?

Firstly, it is vital to realise that the Greenhouse Gas Protocol (the most frequently used and internationally accepted greenhouse gas accounting standard) splits emissions into three categories, each of which has its own set of net zero terms.

• Scope 1: Direct emissions related to on-site fuel combustion or fleet vehicles.
• Scope 2: Indirect emissions related to emission generation of purchased energy, such as heat and electricity.
• Scope 3: Other indirect emissions related to both emissions from upstream and downstream business activities.

Scope 3 emissions are typically far greater than the other two types of pollutants; nevertheless, measuring these emissions is more challenging. When declaring neutrality or having achieved net zero emissions, a firm must define the scope of emissions it is evaluating to provide complete transparency. When discussing a net-zero plan, it is necessary to include all three types of emissions and their sources.

A timeline for a net zero strategy

Aside from that, businesses and governments should establish a timeline for their strategy: are these short-term or long-term actions? Several companies claim to be neutral or to have attained net zero, but they do not specify for how long: is the company neutral for a year, for example, or has it been since the company’s inception?

Most promises from businesses and organisations are based on the terminology used in the IPCC report. Most other publications, including those produced by the Carbon Disclosure Project (CDP) and the Science Based Targets initiative (SBTi), make use of the terms defined by the IPCC as well as their own.

Carbon neutral or net zero CO2

Net zero CO2 emissions are accomplished when anthropogenic CO2 emissions are balanced globally by anthropogenic CO2 removal during a defined time, which is known as carbon neutrality. Organisations and governments should achieve net zero CO2 emissions by 2050, according to the IPCC assessment, to keep global warming to 1.5 degrees Celsius.

Having a consistent climate plan is essential to achieving net zero CO2 emissions. Companies should be aware that net zero initiatives do not consist solely of carbon offsets, as many people believe. It necessitates important preliminary procedures, such as measuring their environmental consequences and understanding their emission sources as part of a complete analysis.

Once a business has identified and understood its various emission sources, particularly the “hotspots,” it may develop a comprehensive sustainability strategy by following the three processes outlined below:

Abatement refers to the elimination of sources of CO2 emissions throughout the entire value chain (scopes 1, 2, and 3); the SBTi refers to reduction. Reduced or eliminated sources of CO2 emissions related to the activities of a company and its value chain until a constant level of residual emissions is achieved is what this term refers to in practice.

Emissions which are unable to be reduced due to a variety of constraints, including economic and technological ones. Some businesses, such as agriculture with crops and livestock breeding, will always have to take residual emissions into consideration.

Can you neutralise CO2?

A process of removing and permanently storing atmospheric carbon to offset the effect of releasing CO2 into the atmosphere through Carbon Dioxide Removal (CDR) activities such as restoring natural carbon sinks or technological innovation is referred to as neutralizing CO2.

It consists of cutting-edge devices that have the potential to divert emissions that are now not in the atmosphere by capturing them immediately after they are released and sequestering them in geological soil. According to the European Zero Emissions Platform (ZEP2019 )’s study, such technologies may incur additional expenses in the short term (ranging from 12€ to 30€ per tonne), but they will be extremely competitive in the long run in the battle against climate change.

The voluntary carbon market

Direct investment in emission reduction initiatives is made possible through purchases of carbon credits on the Voluntary Carbon Market. This type of initiative not only helps to absorb or avoid CO2 emissions, but it also has positive environmental and social consequences for the local populations involved. To maintain a net zero level of emissions, organizations will need to continue to support emission reduction efforts as long as they have residual emissions.

The order in which these acts are performed follows a logic that must be followed by all parties that wish to participate in a net zero strategy. Furthermore, actions for neutralisation and compensation should not be used as a substitute for measures to reduce greenhouse gas emissions.

Net zero emissions or net zero GHG?

While the concept of net zero emissions is quite like that of carbon neutrality, the scale on which it operates is different. Efforts to achieve net zero emissions include reducing emissions of all types of greenhouse gases (GHGs). Due to its longer residence time in the atmosphere than other gases and its contribution to emissions from human activities, carbon dioxide is one of the most significant greenhouse gas pollutants (especially from fossil fuel burning).

There are, however, other greenhouse gases (GHGs), the deadliest of which are nitrous oxide, methane, and halocarbons from human activities, in terms of their contribution to the greenhouse effect and influence on human health. In addition to carbon dioxide, water vapour is a significant heat-trapping gas, but it is a natural occurrence rather than one that is directly related to human activities.

As a result, when human activity no longer contributes to global warming, net zero emissions are reached: anthropogenic emissions of greenhouse gases (GHGs) in the atmosphere are balanced by anthropogenic removals of GHGs from the atmosphere during a certain period.

When can net zero be achieved?

According to the World Resources Institute (WRI) and based on the data supplied by the IPCC’s Fifth Assessment Report, net zero greenhouse gas emissions will only be achieved by 2063, according to the World Resources Institute (WRI). The current actions taken by organizations and countries are insufficient to bring the world’s temperature down to 1.5 degrees Celsius. Net-zero initiatives must be strengthened, and corporations must commit to reducing and offsetting each sort of pollution that they produce.

One of the most difficult aspects of reaching net zero emissions is determining the exact amount of emissions that have occurred. However, whereas CO2 emissions are relatively straightforward to monitor, other greenhouse gas emissions are more complicated. Several climatic measures, such as global warming potential, global temperature change potential, time horizon, and CO2 equivalent, have been established to compare emissions of different gases, such as CO2 equivalent, and all indicate that urgent action is needed across all aspects of society.

The plan for achieving net zero emissions is the same, with the exception that it includes all greenhouse gases, rather than just CO2 emissions, as part of the goal.

Emissions that are carbon negative or net negative

Once an organisation has achieved net zero emissions, it may choose to go above and beyond and offset more than just its residual emissions. Essentially, it means that a corporation takes more carbon dioxide from the atmosphere than it emits, establishing a net positive carbon dioxide balance on a worldwide scale. You may have also heard the phrase “climate positive,” which refers to the exact same thing as “climate positive.”

Some businesses have committed to achieving carbon zero emissions, but Bhutan stands out as a model for others to follow. Despite having huge forests covering more than 70% of its territory, the Asian country was the first to achieve carbon neutrality in 2017. This was made possible by the fact that the country exports renewable energy. According to official figures, the country is producing more hydroelectricity than it requires, and this surplus is expected to generate 17 million carbon offset credits by 2020. Bhutan emits around 1.1 million tCO2 per year on average, whereas its trees sequester three times that amount of CO2.

Does net zero mean zero emissions?

Net zero does not imply that there will be no emissions; rather, it implies that the globe must remove as many emissions as were emitted, if not more. It enables us to make a small but significant contribution to the progressive elimination of emissions that have been collecting in the atmosphere since the beginning of the first industrial revolution.

These days, neither technology nor many trees can completely offset all the pollutants that contribute to global warming. Because of this, it has become critical to invest in the development of new technologies and processes to attain this goal.

For example, this is the goal of a worldwide contest organised by Elon Musk (CEO of Tesla), with the help of a group of volunteers. Individuals, corporations, and academic teams will have the opportunity to propose projects, including novel technology, that absorb carbon emissions from the atmosphere over a four-year period. Participants will have the opportunity to earn cash prizes ranging from $1 million to $50 million to put their ideas into action and further improve them. To combat climate change as rapidly as possible, it is necessary to develop innovative methods of capturing emissions.

The danger of Greenwashing

Even if the climate catastrophe necessitates “action rather than words,” it is critical for organisations and countries to be cautious about the rhetoric they employ. In addition, it strengthens their credibility and protects them from being accused of malpractice due to “greenwashing”.

In this article, we have demonstrated that promises must be linked with either the 1.5° or 2° trajectory, as well as how countries and businesses can take steps to achieve their climate targets by 2020.

So, should we prioritise one type of vocabulary over another? The quick answer is that it does not.

What is critical, though, is that you comprehend the meaning of the various terms and that you apply them effectively.