What is Carbon Offsetting?

Carbon offsetting is compensating for carbon emissions which cannot be avoided through internal reductions, through the purchase of carbon credits. By purchasing carbon credits to offset emissions, businesses are supporting low carbon sustainable development projects throughout the world.

A carbon credit represents one tonne of carbon dioxide equivalent (CO2e) that has been reduced, avoided or sequestered by a project.

Each project calculates the number of credits they can sell based on the CO2e emissions saved following the implementation of the project. For instance, a wind power project will calculate the emissions saved by establishing a renewable energy supply, displacing energy which was previously sourced from fossil fuel power stations.

Projects range from improved cookstoves, to solar energy, to forest protection (and more). Each project must follow robust third party standards to demonstrate how many carbon emissions it is reducing or avoiding.  Every tonne of carbon emission avoided or reduced by the project produces a carbon credit, which can be purchased to offset emissions.

For businesses, this offers an effective, immediate and credible way to reduce Scope 1, 2 and 3 emissions and achieve an emission reduction target.