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Carbon neutrality : reduction vs offsetting

Paris, 2015. States from all over the world are coming together for COP21. For the first time, we were witnessing global cooperation to deal with global warming, which would then give rise to the Paris Agreement.. Two major objectives are set: a halving of greenhouse gas (GHG) emissions by 2030, and the achievement of carbon neutrality by 2050.

Carbon neutrality: an ambitious goal

Achieving carbon neutrality means that an entity (organizational, state, etc.) emits as much GHG emissions as it absorbs through mechanisms for capturing these gases This is not synonymous with zero emissions, but rather a balance between emissions and sequestration. In Europe, carbon neutrality is a central objective of many climate policies, including in the context of the European Green Deal.. Naturally, some companies have aligned themselves with these goals as part of their ESG (environmental, social and governance) strategy, demonstrating their commitment to the fight against global warming.

The main challenge of carbon neutrality is, of course, the fight against climate change. Naturally, our Earth maintains a form of dynamic equilibrium in which forest fires and volcanic eruptions release large quantities of GHGs, which are then captured and sequestered by the oceans and trees. It is a set of chemical reactions that transforms, breaks down, and absorbs the molecules that make up these gases.

However, at the time of its industrialization, humanity began to use fossil fuels such as coal, oil and natural gas. The increasingly intensive use of these energies has literally extracted titanic amounts of carbon from the ground and let it escape into the atmosphere.

As a result of this massive global development, the concentration of GHGs in the atmosphere has skyrocketed, amplifying the “greenhouse” effect from which these gases are named and thus warming our planet. The average temperature around the globe has already risen by 1.2°C since our industrialization. To limit this warming and hope that one day we will return to the natural temperature of our era, it is essential to reduce our consumption of fossil fuels and develop new, less emitting ones.

However, fossil fuels now support a huge part of our society’s activities, whether industrial or individual in nature. Replacing these energies is therefore a colossal challenge, but not an insurmountable one. In order to achieve this goal, international cooperation, putting in place climate policies that transcend national borders, is essential. Each country’s domestic policy also plays a crucial role in drastically reducing GHG emissions and strengthening natural carbon sinks (e.g., trees).

Of course, the transition to carbon neutrality requires massive investments in renewable energy and energy efficiency. While these can drive innovation and economic growth, they also pose a challenge for fossil fuel-dependent industries. Some will have to go as far as reimagining how they operate and how they operate.

Carbon offsetting, an issue of temporality

Carbon offsetting is a strategy that consists of offsetting greenhouse gas (GHG) emissions, which are often unavoidable, by financing projects that reduce or capture an equivalent amount of these gases elsewhere. Carbon sequestration projects, also known as carbon sinks, can be natural such as trees (which capture CO22), or artificial (technological) such as carbon capture, storage and utilization processes. The latter are, roughly, vacuum cleaners equipped with filters and placed at the outlets of factory chimneys to block carbon molecules during the exhaust of gases. For some systems, this results in a condensed solid carbon that can then be used as a raw material or stored.

It is crucial to distinguish between carbon offsetting and GHG emission reductions. Reduction refers to the direct actions taken by companies to reduce their greenhouse gas emissions. Offsetting, on the other hand, does not act directly on the entity’s own emissions, but finances activities outside the entity that neutralize them. Although complementary, these two approaches are different.

Offsetting, on the other hand, aims to support projects that capture emissions that are not necessarily those of the company. These projects can be geographically very far away from the company. For example, a company can finance the preservation of a forest from deforestation, or replant a new one to create a natural carbon sink. The latter solution poses a significant problem, which is that trees only absorb the desired amount of CO22 after a certain stage of their growth, whereas companies emit these emissions immediately. This difference in the temporality of the broadcasts and their capture is a first point of criticism of compensation.

Another major challenge is to ensure the integrity and effectiveness of offset projects. It is crucial that these projects deliver the announced emission reductions and make a real contribution to the fight against climate change. Transparency, verifiability and sustainability of projects are essential. If we take the example of a forest that is preserved so that it continues to grow and capture carbon, we must ensure that it is never cut down or burned. This verification extends over several years, decades, or even indefinitely. But who can guarantee that a change in regulation or policy context will not contravene this in 30 years’ time? Who can be sure that tomorrow no lightning strikes will cause a cold sore in this forest, especially in a world that is warming at a breakneck pace?

As for more technological capture processes (so-called “filter vacuums”), it is necessary to ensure that their production and energy supply do not emit more emissions than those captured. Still in the development phase, these compensation solutions have promising prospects but should be considered as one solution among others because of their cost, their low efficiency, and the long industrialization time.

Finally, a significant challenge is to prevent deadweight, where organizations could rely solely on offsetting without making significant efforts to reduce their own emissions. It is with this in mind that laws preventing this easy path from being taken are beginning to emerge.

Direct reduction as a leitmotif of DCarbonize

The slippery slope of “greenwashing” arises when an organization creates a gap between its communication and its actions for the environment. In the context of carbon neutrality, this can take the form of misleading claims, such as carbon neutrality, without the necessary efforts to achieve this being actually undertaken. This phenomenon can occur when a company that fully “reduces” its GHG emissions does so through the financing of offset projects, without addressing the emissions it emits itself.

That’s why, in our support projects, we always encourage our customers to reduce emissions directly related to their activities. To do this, we mobilize employees from all ranks of the company through ideation workshops, so that they can think together about these issues. As for neutrality, we try to make our clients understand that having ambitious goals is motivating, but that you have to be realistic about what is actually achievable.

Indeed, when we model our clients’ carbon strategy, we notice that the sum of their reduction solutions only reaches an average reduction of 15% on the total balance sheet. The emissions that remain to be reduced are often linked to their business models (often their products and production). Therefore, the outcome of a carbon footprint mission is only the starting point of a long road, and it starts with awareness. That of understanding that reducing the emissions of a company, a state or a society requires in-depth work that can neither be rushed nor simplified by offset projects.

Like ADEME,D-Carbonize positions itself against the misuse of the concept of carbon neutrality in corporate communications and conceives carbon neutrality as a process of continuous improvement rather than a static goal to be achieved. Thus, companies should not claim their carbon neutrality as a marketing argument, but rather as the result of a deep commitment and concrete actions to reduce greenhouse gas emissions.

By the nature of our business, our position is focused on direct carbon reduction, but we do not neglect some of the benefits of offset projects. Their benefits on biodiversity, other pollutants of the air, water, land, and social impacts are just a few examples that can motivate companies to invest in such projects. These projects take on their full meaning when integrated into a coherent Environmental, Social and Government (ESG) strategy. Let’s keep in mind that carbon is a major criterion in global warming, but it is not the only one.


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