Carbon offset: what is it and how does it work?

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carbon offset

Offsetting your carbon footprint consists of financing an environmental project which reduces greenhouse gas (GHG) emissions into the atmosphere. It is usually used as a means of achieving carbon neutrality on a planetary scale, meaning the point of theoretical balance between the amount of CO2e due to an activity and the CO2e reduced thanks to the financed project.

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Carbon offset: meaning and definition

carbon footprint

Carbon footprint offsetting consists of neutralizing the amount of CO2e emissions emitted by a company when an activity is carried out. An example of this is airlines offering carbon offset flights, meaning that when a customer purchases a ticket, they can also make a contribution to a carbon offset programme. Carbon offsetting can also be done at the individual level : it's then said to be voluntary.

A Brit emits, on average, 10 tonnes of CO2 (imported and exported emissions) into the atmosphere, per year. These CO2 emissions come from:

  • Transport ;
  • Food and consumer habits ;
  • Energy relating to the home and indirect emissions.

The phases to offset carbon emissions are the following:

  1. Calculation of the carbon footprint.
  2. Economic investment in an emissions' reduction project (reforestation, renewable energy, energy efficiency, etc).
  3. Carbon offset projects.
  4. Receipt of carbon credits proportional to the contribution made to the project.

Carbon credits

When a person or company wants to offset their CO2 emissions, they acquire the number of carbon credits corresponding to the volume of their greenhouse gas emissions.

1 carbon credit = 1 tonne of CO2e avoided.

The demand for carbon credits is sometimes greater than the number of existing projects. This is why a carbon credit is said to be "ex-ante" when it is sold before the reduction in CO2 emissions has occurred. On the other hand, an "ex-post" carbon credit corresponds to the financing of the project once the emissions have been avoided.

Carbon offset projects in the UK

Carbon offsetting consists of financing projects to reduce carbon dioxide emissions by purchasing carbon credits.

For example, Selectra, buys a number of carbon credits for its clients corresponding to the amount of greenhouse gas emissions that each one wants to neutralize. This economic contribution thus contributes to the financing of a carbon offset project.

There are three types of carbon offset projects:

  1. Forestry projects that promote the sequestration and absorption of CO2 by soils and forests. The Woodland Trust, the National Forest, and Trees for Cities are examples of projects to support carbon offsetting in the UK.
  2. Renewable energy projects that allow the production of cleaner energy and the substitution of polluting energy for green energy, such as the Gandhi project.
  3. Projects related to efficient use of energy that develop clean and sustainable technologies to produce electricity, cold and heat to increase industrial efficiency and limit energy consumption in transport and construction, for example.

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These projects can be implemented all over the world. Indeed, global warming is an issue affecting the whole planet so financing a project in a developing country makes the same sense as one in a developed country.

Most environmental projects are implemented in developing countries to help them in their transition. Generally, developing countries have a very carbon-intensive energy mix (coal, oil, etc.). The energy mix of these countries is usually more polluting and their infrastructures less efficient, unlike developed countries.

A carbon offsetting project implemented in a developed country cannot always be subject to the generation of carbon credits. A reforestation project implemented in the UK, for example, reduces emissions by absorbing CO2 but it is already accounted for in the national reduction targets of the UK government and, therefore, cannot be the subject of carbon credits.

How to offset your carbon footprint?

At Selectra, we offer a carbon-offset service. This objective is to offset CO2 emissions through the financing of environmental projects.

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Offset your carbon footprint by supporting an environmental project!

Reduce your CO2 emissions to the level of your carbon footprint for only £2/month with Selectra.

Offsetting your carbon footprint through an environmental project

Selectra has a portfolio of carbon offset projects which you can find on our project page. All our projects are certified by international labels. At the end of each year, Selectra sends an official certificate to its clients proving that their CO2e emissions have been offset.

  • The service conditions for Carbon Offset includes:
  • No minimum contract duration.
  • Cancellation is completely free.
  • Electronic billing.
  • Payment via direct debit.

In order to complete any transaction or request information regarding the Carbon Offset service, you can contact Climate Consulting in the following e-mail [email protected].

Gandhi project The Gandhi project is the construction of a wind farm in India in order to develop green energy. Up until now, the project has avoided the emission of more than 33,000 tonnes of CO2 through the production of 36 GWh (36 million kWh) of green electricity. The Gandhi project has been certified Verified Carbon Standard and is approved by EcoAct, a consultancy and international developer of offsetting projects. 

Other ways to offset your carbon footprint with Selectra

As well as the carbon offset service, you can reduce your carbon footprint the following ways:

  1. Selectra’s carbon calculator: This carbon offset calculator works out your annual greenhouse gas emissions, identifies your main greenhouse gas emissions and provides you with a practical guide to reduce your carbon footprint.
  2. The Green Pack from Selectra: allows you to raise awareness amongst your loved ones with regards to their CO2 emissions and finances an environmental project to reduce greenhouse gas emissions.

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Don't know what your company can do for the planet?

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Carbon markets - what are they?

With the signing of the Kyoto Protocol in 1997, in addition to other global initiatives such as the Montreal Protocol, the Earth Summit, the Paris Summit and, most recently, the Conference of the Parties (COP), governments have committed to reducing their greenhouse gas emissions by 2050 in order to achieve global carbon neutrality.

Balance with two measuring weights

In addition to these measures, profit or non-profit organisations can use complementary mechanisms by investing, through carbon credits, in greenhouse gas reduction projects outside their borders. Thus carbon offsetting began.

To regulate the mandatory carbon offsetting market, a compliance or regulated market was created, intended only for governments and companies that, by law, are held accountable for their greenhouse gas emissions.

In contrast, in the voluntary carbon market, credit trading occurs on an optional basis. It is aimed at public and private organisations, companies and private citizens who are aware of their responsibility in climate change and who voluntarily want to neutralise their CO2 emissions, offsetting them in clean projects in developing countries.

Corporate Social Responsibility (CSR) and public relations are among the most common motivations for purchasing carbon credits as part of carbon offset efforts in the UK, in addition to certification, reputation, and environmental and social benefits.

Carbon offset certificates

To ensure the transparency and credibility of an offset project, carbon offset certifications have been created.

The Kyoto Protocol includes two key mechanisms that are crucial for the compliance market:

  1. The Clean Development Mechanism (CDM) that provides financing for projects developed by industrialised countries in developing countries.
  2. Joint Implementation (JI) that ensures the investment of projects developed between industrialised countries.

These projects are validated by the United Nations Framework Convention on Climate Change (UNFCCC), which guarantees that emission reductions are real, measurable, verifiable and additional.

The voluntary emission reduction certifications, inspired by the Kyoto Protocol certifications, offer guarantees of reliability similar to offset projects:

Voluntary emission reduction certifications
Certification Features

Verified Carbon Standard (VCS)

Created by the VERRA association in 2006, it is the best known certification. It is present in almost half of the voluntary market. Focuses on the quality of greenhouse gas reduction and ensures that project emission reductions are real, measurable and verifiable.
gold standard

Gold Standard (GS)

Managed by the WWF, this certification establishes requirements, in particular with regard to the benefits for the socio-economic development of the country and the participation of the local population in carbon offset projects.
plan vivo

Plan Vivo

This certification includes projects that provide environmental, social and economic benefits to the area where the project is implemented and to its local communities, such as the reduction of poverty, the conservation and restoration of ecosystems, the conservation and protection of biodiversity, etc.
climate action reserve

Climate Action Reserve (CAR)

The CAR certification has developed its own eligibility criteria, such as verification of the additionality of emission reductions and verification by an independent third party. It has the distinction of making a project eligible only when it is located in the United States or Mexico.

It is also worth mentioning the REDD + programme (Reduction of Emissions from Deforestation and Forest Degradation), which is not a certification but a United Nations programme that aims to reduce CO2 emissions from deforestation and forest degradation in developing countries. By placing a monetary value on the carbon stored by forests, the programme encourages these countries to implement policies to combat deforestation, increase forest resources and manage forests sustainably.

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Green Pack

Raise awareness amongst your family and friends by offsetting their greenhouse gas emissions.

What is carbon neutrality?

Global warming is the cause of many droughts, torrential rains, and many other catastrophic climate changes around the world. This directly threatens biodiversity and disrupts economic activities.

The main cause of global warming is the concentration of CO2 in the atmosphere. This is why it is so important to the environment to offset your carbon footprint. It is an essential step towards achieving carbon neutrality and the 1.5°C target set by the Paris Agreement by the year 2050.

Carbon neutrality is the key to achieving this common Goal. Zero carbon footprint, consists of minimising greenhouse gas emissions and offsetting incompressible emissions. An activity must reach carbon neutrality by reducing its greenhouse gas emissions as much as possible. However, some emissions are intrinsically linked to a company's activity and cannot be reduced. In the latter case, the company can use carbon offsetting to absorb a quantity of CO2 equivalent to that produced by the activity.

What is the Paris Agreement?In 2015, the United Nations COP 21 on climate change took place, with the objective of signing of a new international agreement to limit global warming to 2°C by the year 2100.

Carbon offset: reality or greenwashing?

Whether regulated or voluntary, carbon offsetting is receiving much criticism around the world. According to critics, financing carbon offset projects encourages companies to delay their efforts to reduce greenhouse gas emissions. Others believe that voluntary carbon offsetting amounts to buying an environmental conscience. Carbon offsetting is not an end in itself, it should only be a means to participate in the ecological transition. However, it must enable the person or organization using it to understand the need to reduce its emissions before wanting to offset them.

Carbon footprint compensation is a confusing term. It could be understood that after financing a reduction project, all the emissions produced become zero. Offsetting carbon emissions can only be associated with greenwashing when organisations or individuals avoid reducing their emissions by offsetting them and the amount of greenhouse gases in the atmosphere remains the same...

Project funding is only used to offset emissions by sequestering other emissions. That's why you have to be careful with the term "carbon neutrality".

To combat greenwashing around carbon offsetting, the following recommendations should be taken into account:

  • Even before buying carbon credits, it is important to be transparent about your carbon offset strategy.
  • The purchase of carbon credits must always be in addition to a strategy to reduce greenhouse gas emissions.
  • The acquired carbon credits must meet strict quality criteria.
  • For organisations or individuals who cannot afford to reduce their emissions, the purchase of carbon credits should only be seen as a temporary step towards longer-term decarbonisation.