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What are carbon offsets, why use them and where to buy them?

With so much momentum from companies in the past year transitioning to carbon neutral, (Australia’s Climate Active certification alone has seen a 100% increase year on year) there is a lot of discussion around carbon offsets. So what exactly are carbon offsets, why use them, where to buy them and what to look out for when you do?   

Here’s a simple and quick explainer.  

What are carbon offsets?  

Carbon offsets, or offset units (or carbon credits) are created by projects that avoid, reduce, remove or capture greenhouse gas (GHG) emissions from the atmosphere. There are many different types of offset projects around the world. These span such initiatives as reforestation of forests or wetlands, clean energy from renewables, storing carbon in soil, and savannah fire management.  

In Australia, the official government carbon credits are called Australian Carbon Credit Units (ACCUs). One ACCU purchased, represents one tonne of carbon dioxide equivalent (tCO2-e) stored or avoided by a project.   

Why use carbon offsets?  

Carbon offsets are mostly used when an entity (for example a business or a local council) has compliance obligations or wants to go carbon neutral. Carbon neutral refers to achieving an overall balance between carbon emissions produced – and carbon emissions taken out of the atmosphere.  

The process to go carbon neutral involves an entity measuring their greenhouse gas (GHG) emissions (their carbon footprint) and then developing an emissions reduction strategy. This might include such actions as changing energy use to renewables, installing LED lighting, reducing and recycling waste and encouraging the use of public transport or eclectic vehicles for their workforce.   

When the emissions can’t be reduced to achieve that balance, carbon offsets are purchased to ‘offset’ the remaining emissions down to zero.  

Where to buy carbon offsets and what to look for  

As mentioned, there are a huge range of offset projects around the world, but not all offset projects are created equal. Many of the international offsets are cheaper than Australian offsets, but there can be an issue with the integrity of these projects and some methodologies are frequently linked to environmental or social issues. Recently a large Australian financial institution was found to have purchased offsets provided by a tobacco factory with questionable labour practices. Investigations have also uncovered projects that generate carbon credits that have little or no impact on the climate at all. Even some methodologies under the Australian regime, such as projects that avoid deforestation are being debated extensively. The reputational risk profile very much depends on the specific offset project in question.  

As demand for carbon offsets continues to rise, so does the price. With ACCUs recently reaching an all-time high of $24.50/t. When purchasing offsets, if you want to go down the international route for economic reasons, it’s a good idea to get the project vetted first to ensure you are getting what you pay for to offset your emissions and mitigate reputational risks. You need to know that you are genuinely supporting projects that reduce or remove emissions, authentically support communities (where relevant) and that there is no potential for reputational damage to your brand. There are registered brokers and consultancies (like us) who can help you with that process.  

Image source regenerationinternational.org

Choose verified offsets  

The only carbon offsets you should consider buying are carbon offsets verified under a reputable standard. The government’s Climate Active Standard’s list of eligible frameworks can help with that determination.

  1. If you want to purchase Australian certified carbon offsets, a good place to start is with the Carbon Market Institute’s easily searchable Australian Carbon Project Registry. You can search by industry and type of project you are interested in and learn more about the details of the carbon credit project.  
  2. Then head to the Carbon Market Directory to search for a broker or consultant that can assist with your offset purchase.  
  3. You can also visit the Clean Energy Regulators Emission Reduction Fund project register to see a list of verified ACCUs.  

If you’re not sure what to look for, get advice from an expert, ideally one that is a signatory to the Australian Carbon Industry’s Code of Conduct, and therefore committed to developing and conducting their business in line with industry best practice.  

Help buying carbon offsets  

As mentioned, the market place is a great place to start to help you find reputable brokers and consultancies to help with your purchase. Corporate offset programs such as the Qantas Future Planet Program or brokers such as Tasman Environmental are a great choice in providing verified carbon credits that meet strict standards.  

Organisations such as the not-for-profit Aboriginal Carbon Foundation focus on projects that mitigate climate change and benefit Indigenous communities in Australia.  

Consultants such as us – Ndevr Environmental – can also help with guidance and purchase of your offsets, or with your entire carbon neutral journey. In over 10 years we’ve helped dozens and dozens of businesses large and small with offsets for carbon emissions and also to achieve carbon neutral certification.  

Before you dive in it is worth keeping front of mind, offsets are just one part of your overall emissions reduction strategy. The best way to go carbon neutral is to reduce your emissions as much as possible and put a plan in place to continue to look for best practice strategies to continue reducing where you can – and only use offsets as your final resort. This will benefit you in the long run – and save you money in the long run.

Reach out to our team of carbon neutral experts with any questions or click here to learn moreenvironment@ndevr.com.au or phone P: +61 3 7035 1740.  

Main image credit: Aboriginal Carbon Foundation

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