What is Carbon Offsets?
Credits purchased to compensate for emissions by funding projects that reduce, avoid, or remove greenhouse gases elsewhere. Examples include reforestation, renewable energy projects, and methane capture. One offset typically equals one tonne of CO₂e.
Why it matters
Offsets can play a role in a transition strategy, but they should not replace genuine emission reductions. Regulatory bodies and procurement teams are increasingly sceptical of offset-heavy claims. Credible reporting distinguishes between reductions and offsets clearly.
Example
After reducing operational emissions by 30%, a travel company purchases 150 verified carbon offsets from a UK peatland restoration project to cover residual emissions while it works on longer-term supply chain reductions.
Related terms
Carbon Credits
Tradeable certificates representing the right to emit one tonne of carbon dioxide or equivalent greenhouse gas. Carbon credits can be traded on voluntary or compliance markets and are used to meet emission reduction obligations.
Carbon Neutral
A state where an organisation's net carbon emissions equal zero, typically achieved through a combination of emission reductions and carbon offsets. Carbon neutral differs from net zero as it allows greater use of carbon offsets.
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