What is Carbon Neutral? Explaining the Term Everybody is Using Now

What is Carbon Neutral? - Carbon Herald

Being carbon neutral has been talked about a lot around the world in the last couple of years. What does carbon neutral mean? It basically means generating the same amount of carbon dioxide emissions into the atmosphere that is offset by a variety of possible means. Another carbon neutral definition is capturing back and sequestering no less greenhouse gas emissions than the amount being released from either an individual, business, or national economy. 

Almost everything we do can produce a certain amount of emissions. Driving our car, using electricity at home, or traveling by airplane are examples of that. In order to achieve carbon neutrality, we have to counterbalance all our emissions some way or another. 

We can offset the emissions from let’s say using our car, by some carbon reduction methods like planting trees, buying carbon credits from carbon capture companies or participating in wetlands restoration projects. The goal is always to have a zero at the end of the carbon calculation (emissions created – emissions offset = 0) so that our output has a net neutral impact on the environment. 

The amount of carbon dioxide equivalent emissions can be calculated by using online carbon footprint calculators. There are many governments now that have developed such services as well as environmental organizations and nonprofits that provide calculators for free

There is another approach that individuals or organizations can take to be considered carbon neutral. They can just reduce their overall GHG emissions instead of sustaining and offsetting them by some way. 

Carbon Neutral Vs Net Zero

Here comes another term, often used interchangeably with carbon neutral and that is net zero. Net zero means reducing emissions down to zero all together. And when after the best measures are taken, there are still some small amount of leftover GHGs, then they can be offset by other means. 

In comparison, carbon neutral does not require a commitment to cut down overall GHG emissions. A carbon-neutral business, for example, would need only to offset the emissions it produces, even if those emissions are increasing. 

Therefore, carbon neutral can be referred to both keeping emissions and offsetting them, or reducing them all together. In contrast, net zero is referred only to reducing emissions until they come down to none. A business that is net zero can offset emissions only in the case where no more reduction can be done but the balance is still positive.  

In general, the best way to tackle the emissions problem is to try and reduce GHGs by ending polluting activities or switching to available low carbon alternatives. If no reduction is possible, then a way to offset could be approached. 

How Can Carbon Neutrality Be Achieved? 

Because there are various spectrum of activities that result in carbon emissions, there are many ways through which carbon neutrality can be achieved and therefore indefinite answers to this question. 

As the topic is overwhelming, the first step that could be taken is calculating the amount of emissions being incurred. The emissions differ between types of activities and strongly depend on the composition and origin of gases being emitted. 

The second step involves cutting the amount of those emissions by ending the respective polluting actions or switching to a less emissions-intensive option. An example of switching is replacing the internal combustion engine vehicle with an electric one charged with 100% renewable electricity. That is expected to curb emissions from driving a car by at least 50%. 

A hydrogen fuel cell vehicle powered with green hydrogen as a fuel is also an option. Switching to carbon neutral fuel or biofuels is another alternative as they carry less emissions than fossil fuels. Whenever possible, switching to biking is one of the most eco-friendly alternatives. The third step would be to try and balance out the leftover amount that cannot be eliminated.   

There are many ways to tackle your carbon footprint and reduce emissions. An example would be a person switching from fossil-fuel energy consumption at home to 100% renewable energy supply. Since fossil-fuel electricity takes almost half of a person’s carbon footprint, a renewable electricity usage would considerably reduce everyone’s environmental impact. 

A company can install energy-efficient equipment, source recycled materials, or also sign a power-purchasing agreement to buy renewable energy. An ecommerce can minimize packaging materials to reduce its impact. Under the carbon neutral definition, a business might support land-use projects that soak up and sequester carbon to offset unavoidable emissions. 

For an industrial plant for example, a company can use the opportunity to deploy carbon capture and storage equipment to reduce emissions. Wherever that’s not a viable option, direct carbon capture services could be used. 

There are companies who offer the purchase of carbon credits for a certain amount of CO2 permanently removed. Climeworks is a direct air capture company and one of its subscriptions provide the capture of 600 kg of CO2 for 49€ per month. 

Carbon Neutral Certification

A mechanism for mitigating climate change emissions are carbon credits or carbon certificates. A carbon credit is a certificate that permits the emissions of one ton of CO2 or any other equivalent amount of other greenhouse gas. 

Since some policies cap the amount of emissions industries or companies are allowed to generate, a carbon credit is created to measure up the impact and keep pollution up to a certain limit. It is hard for some companies to eliminate their GHGs impact immediately, so they are awarded credits that allow them to continue emitting emissions up to a certain amount. 

The European Union Emissions Trading Scheme (EU ETS) is a policy that puts a cap on the carbon dioxide emitted by businesses. It creates a market and a price for carbon credits. If a company doesn’t reach its emissions cap, it can sell the unneeded carbon credits to another company and subsidise carbon reduction projects with the money it receives. 

EU ETS is the world’s largest carbon trading scheme. It aims to incentivize companies to take measures to reduce their emissions as they can then sell their surplus allowances. The scheme was initiated in 2005 as part of meeting the target under the Kyoto Protocol of 8% reduction in GHGs from 1990 levels.

A carbon offset or carbon offset credit is another carbon neutral certification that represents an emission reduction certificate of one ton of CO2 or equivalent. It is an instrument transferable by governments or certification bodies to reward a carbon cutting activity or initiative. They are often purchased by companies to compensate for their emissions by enabling an equivalent emission-reducing activity somewhere else in the world. 

The carbon offset credits could be purchased from carbon offset companies and projects locally or internationally. The credits being bought allow those projects to be funded and thus balance the individual or business’s carbon footprint. 

Carbon Neutral Policies

Being carbon neutral is increasingly seen as an important social responsibility imperative. In many countries though, it has become more than just an affair of good will, it has become a law. A growing list of policies are pushing the world towards reaching carbon neutrality. 

The Paris Agreement is an example of that. It is an international, legally binding treaty to limit global warming to well below 2 degrees Celsius or preferably to 1.5. It does not set a specific amount of emissions targets for countries or a deadline. Each country needs to set a plan itself and report regularly on the progress. 

The Kyoto Protocol is effective from 2005 and precedes the Paris Agreement. It also involves the commitments of currently 192 countries to reduce their emissions. It implements the objectives of the UNFCCC. In the first commitment period of the Protocol – from 2008 to 2012, just 36 countries that fully participated compiled with their reduction targets. 

The second commitment period from 2012 till 2020, known also as the Doha Agreement to the Kyoto Protocol, has 34 countries confirming legally binding commitments to cut their GHG emissions. As of October 2020, 147 countries have accepted the Doha Amendment. Some of the countries without emissions reduction targets for the second period are the US, Canada, Japan, Russia and New Zealand. 

The Paris Agreement is also an instrument under the UNFCCC and resulted separately rather than as an amendment to the Kyoto Protocol. It aims to achieve more ambitious commitments than the Protocol and serves as a framework after Kyoto Protocol’s second period. 

Carbon Neutral Countries 

There is a very small number of countries that have succeeded in reaching carbon neutrality and beyond. Bhutan and Suriname are the only countries in the world that are carbon negative. A carbon negative economy means it absorbs more CO2 emissions than it emits. 

The Bhutan government has achieved that by giving up from economic growth as a compass and placing environmental protection as a top priority. The government put a ban on log export, forbade the forested areas in the country to drop below 60%. The country also uses hydroelectric power instead of fossil fuels and provides free electricity to rural farmers. 

Carbon Neutral Pledges

Numerous countries have pledged carbon neutrality, mostly by 2050 and as part of meeting the targets of the Paris Agreement of limiting climate change to 1.5 degrees warming. 

The EU has one of the most ambitious climate policy commitments. The European Green Deal was introduced in 2019, calling for carbon neutrality by 2050. It also wants to achieve 60% emissions reduction compared to 1990 levels by 2030. 

The European Commission is expected to set a target for 2040 to sustain the progress towards net zero by 2050. Right now, just five EU countries have set a law for the target of climate neutrality: Sweden wants to reach net-zero emissions by 2045 and Denmark, France, Germany and Hungary – by 2050.

The US has recently set a carbon neutrality target. Since Biden won the US elections last year, it has pledged that the US will achieve a 100% clean energy economy and net-zero emissions by 2050. The implementation of a carbon tax is also among the agenda of the new US government to achieve those targets. 

China, the world’s top polluting country has claimed to become carbon neutral by 2060 and peak its emissions by 2030, although it has a lot of societal and political pressure to move ahead with a robust plan on how to achieve those targets. 

The UK has committed legally to curb emissions by 2050 and has planned substantial investments into carbon sequestration projects. In December 2019, the Canadian government joined the club and formally announced its target to be carbon neutral by 2050. 

Ethiopia is one of the countries that has pledged the most recent deadline for a net zero economy – 2025. It plans to do that by maintaining sustainable agriculture and regenerating millions of hectares of degraded forest. 

Carbon Neutral Companies

Companies are also becoming all too aware of the consequences of global warming and only recently in the past couple of years, a growing number of them have started to pledge their net zero ambitions. Becoming a carbon neutral business or even a startup has become a mainstream marketing lurk so attention must be paid beyond claims and on the actions being taken.  

Corporate greenwashing is a term created since the 1960s and is a marketing practice of companies to claim their products are more environmentally friendly than they are, in order to increase sales. Since consumers are getting more and more conscious and educated, companies started to move towards emissions reduction practices to back up their pledges. 

According to a recent report published 23rd of March 2021, 21% of the world’s biggest 2000 public companies have commited to reach net zero emissions. They meet the robustness criteria for their commitments by having interim targets, a published plan and a reporting mechanism.

A third of the UK’s largest businesses have pledged to eliminate their contribution to carbon emissions by 2050. That mostly came as a response to the UK government’s commitment to be also net zero by 2050. 

Big Oil And Tech Companies

Some of the richest and biggest tech companies in the world have also committed officially to reach carbon neutrality. Google announced back in 2020 that it has become carbon neutral in 2007 by buying high quality carbon offsets. It claimed to be the first major company to achieve carbon neutrality. Google also targets to run all of its data centres and offices on carbon-free energy by 2030. 

Amazon aims to reach net zero carbon by 2040. It co-founded in 2019 the so called Climate Pledge – a commitment by businesses across various industries to be net zero 10 years earlier than the Paris Agreement. More than 100 companies so far have joined the pledge and want to be carbon neutral by 2040 or sooner. 

Microsoft has announced that it will be carbon negative by 2030, and by 2050 it will remove all the emissions the company has emitted either directly or by electrical consumption since it was founded in 1975. Achieving those targets is one of the reasons why the company plans to invest $1 billion in carbon capture technologies. 

Global giants like Apple, Verizon, Ford, PepsiCo, BlackRock, American Airlines have also taken bold leadership and set carbon neutrality targets. Even oil companies Shell, BP, Equinor, Total, Repsol, and Eni have already pledged to become net-zero by 2050 or sooner. Others like Chevron and ExxonMobil have not made such commitments but Chevron has unveiled plans to eliminate routine flaring by 2030. 

What Is Carbon Neutral Shipping?

Carbon neutral shipping means offsetting the emissions incurred by the shipping companies. In 2009, UPS – one of the biggest global shipping and logistics companies, launched a carbon neutral shipping program. UPS carbon neutral program allows customers to pay a small fee added to the bill for every package they send in the US and internationally. 

The fees range from 5 cents for local to 75 cents for international packages. UPS is offsetting the carbon footprint of its shipments by purchasing carbon offset credits from climate action projects that reduce the equivalent amount of emissions in other regions in the world. 


The term carbon neutral is increasingly used to describe a more robust commitment on balancing GHG emissions. Carbon neutrality is referred to offsetting carbon emissions being emitted. Many businesses and economies adopt the carbon neutrality approach as they are not able to stop carbon emissions immediately because of various reasons. 

Moving beyond climate neutrality and going towards net zero emissions involves carbon reduction activities as opposed to relying solely on offsetting. Cutting CO2 emissions and switching to carbon free activities is the most sustainable way of dealing with climate change. 

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Posts
Translate »