Can carbon credits help my organization achieve Net Zero?

May 30, 2023

As governments, companies, and individuals seek to reduce their carbon footprint and combat climate change, the concept of Net Zero has come into focus.

Net Zero refers to achieving a balance between the amount of greenhouse gas emissions (GHGs) produced and the amount removed from the atmosphere. This can be reached by reducing emissions through various means, such as:

• reducing overall energy use throughout an organization;
• regulating business travel in ecologically sustainable ways; and
• using sustainable suppliers in a company’s supply chain to reduce Scope 3 emissions.

An important additional option to accelerate progress toward carbon reduction targets is the use of carbon credits.

Net Zero and carbon offsetting

The connection between Net Zero and carbon offsetting might not be clear immediately, so covering the fundamentals may be beneficial:

• Carbon projects, which remove or reduce GHGs in our atmosphere, issue carbon credits.
• These carbon credits are then bought by companies or individuals and retired, which is referred to as carbon offsetting.
• Retiring a carbon credit takes it out of circulation on the Voluntary Carbon Market, reducing the amount of carbon credits available and incentivizing carbon projects to continue operating and scale up their work.

These projects can include activities such as reforestation, energy efficiency, and renewable energy projects. Carbon credits are measured in metric tons of CO2 equivalent (CO2e), which is a unit that accounts for the global warming potential of different GHGs.

As shown in the figure above, most organizations can decarbonize their operations only over long timeframes. This implies that reaching Net Zero is not possible without offsetting some emissions through the purchase of carbon credits. They are an immediate solution to drive positive climate impact and pave the way for future decarbonization efforts.

Carbon credits can also offer several key benefits to organizations that use them:

• They provide a way for organizations to take responsibility for their emissions.
• They enable organizations to attain a leadership role in contributing to global emissions reductions.
• They allow organizations to support the development of renewable energy and other emissions reduction activities that would not have happened otherwise.

Organizations that do make use of carbon credits have recently been found to be reducing their own emissions faster than organizations that do not purchase carbon credits as well.

However, carbon credits cannot come into existence solely due to the work of carbon projects. They need to be verified by established carbon credit standards bodies to ensure you can maximize the impact of the carbon credits you purchase.

Why do carbon credit standards matter for my organization?

In order for your organization to reach Net Zero, you should rely on carbon credits that meet certain integrity standards and are audited by accredited verification and validation bodies. Because of the many different types of carbon credit—each with their own criteria for what constitutes a high-quality credit—qualified auditors are necessary to ensure your organization reaches its emissions targets in a verifiable, trusted manner.

Standards bodies operating in the traditional Voluntary Carbon Market include:

• Gold Standard;
• Verra;
• American Carbon Registry; and
• Climate Action Reserve.

These organizations not only validate the carbon credit projects you need to reach Net Zero but also ensure the credits meet specific criteria, such as demonstrating additionality. Many carbon credits also offer additional co-benefits that are in line with the United Nations Sustainable Development Goals, such as reducing poverty and improving local biodiversity.

The easiest way to purchase carbon credits

With clear information, transparent pricing, and the full traceability that blockchain technology enables, Carbonmark is a nexus for delivering climate finance to impactful projects contributing toward the Net Zero future.

Carbon credit listings on Carbonmark include information about the project’s

• certification standard;
• vintage year; and
• technology type.

After formulating a strategy for your organization to reduce its emissions, the rich information available for each carbon credit on Carbonmark ensures you will be able to find the right carbon credits for your organization. Additionally, Carbonmark is continually working to augment the data provided by carbon registries with additional information via remote sensing solutions, such as satellite monitoring of biomass within nature-based project areas.

To get started on your path to Net Zero, we recommend reading our step-by-step instructions on using our marketplace for your net offset purchase in our guide on how to buy carbon credits.

You may also contact us here if you have specific questions on helping your organization reach its ESG goals.

Sources

• SBTi (2020) Foundations for Science-Based Net-Zero Target Setting in the Corporate Sector. Available at: https://sciencebasedtargets.org/resources/legacy/2020/09/foundations-for-net-zero-full-paper.pdf
• SBTi (2022) Annual Progress Report 2021. Available at: https://sciencebasedtargets.org/resources/files/SBTiProgressReport2021.pdf