Carbon Neutral and Net Zero: What Are the Key Differences?
In recent years, environmental and commercial regulations such
as the Paris Agreement, the European Union (EU) Green Deal, and
the Carbon Border Adjustment Mechanism (CBAM) have highlighted
the urgent need for companies, in particular, to take action in
reducing greenhouse gas emissions. Two key concepts that stand
out in efforts to mitigate the adverse effects of global climate
change and limit global warming are:
carbon neutrality and
net zero.
Carbon neutrality and net zero are strategies and commitments
that companies adopt to reduce their contribution to the climate
crisis. However, although these terms are often used
interchangeably, they refer to different approaches to reducing
greenhouse gas emissions. Exploring the key differences between
carbon neutral and net zero, how these two strategies contribute
differently to limiting carbon emissions, and the steps that
must be taken on the journey to achieving sustainability goals
through carbon neutral and net zero pathways.
Carbon neutral refers to the situation where an organization or
company balances the amount of carbon emissions it releases into
the atmosphere with an equivalent amount of carbon removed from
the atmosphere. Essentially, carbon neutral aims to achieve a
"net zero" carbon emissions balance, but this does not require
direct emission reductions.
Becoming carbon neutral typically involves methods such as
purchasing carbon credits, investing in renewable energy
projects, supporting reforestation projects, or financing carbon
capture initiatives.
This process is known as carbon offsetting, which emphasizes the
importance of verified projects that store or reduce carbon,
such as reforestation and renewable energy projects. It also
addresses concerns related to the validity of such projects and
underscores the need for transparent and reliable plans that
integrate real emission reductions with carbon offsetting.
Although the goal is to balance emissions, an organization
striving for carbon neutrality may still emit significant
amounts of carbon into the atmosphere.
-
For organizations that cannot immediately reduce emissions at
the source, balancing their carbon footprint is the first
step.
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The focus is on balancing emissions rather than completely
eliminating them.
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Carbon neutrality is achieved through carbon offsetting or
carbon balancing projects that finance initiatives that remove
or reduce carbon emissions from the atmosphere.
While aiming for carbon neutrality, companies may resort to
carbon balancing strategies instead of directly reducing
emissions. To balance the carbon emissions from their
operations, they may purchase carbon credits or finance
reforestation and renewable energy projects. Although carbon
neutrality is an important and effective sustainability goal, it
does not require businesses to transform their operations or
significantly reduce emission sources.
Net zero refers to the process of reducing greenhouse gas
emissions to nearly zero and balancing remaining emissions
through methods like carbon capture. Unlike the carbon
neutrality goal, net zero focuses on reducing emissions as much
as possible before relying on offsets.
Achieving net zero typically requires significant changes in how
companies operate, including the implementation of clean energy
solutions, improving efficiency, and reducing emissions
throughout the supply chain.
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Net zero focuses on reducing emissions at the source
throughout all operations of a company, including the supply
chain.
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After the reduction process, any remaining emissions are
neutralized through carbon removal or similar technologies.
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Scientific-based targets are set to limit global warming to
1.5°C, in alignment with the goals of the Paris Agreement.
The net zero target is considered a more advanced stage than
carbon neutrality because it requires a greater transformation
towards sustainability. Companies pursuing net zero goal focus
on minimizing emissions in their operational activities,
transitioning to renewable energy sources, and taking strong
measures to reduce emissions in the supply chain.
A company aiming for net zero works to decarbonize its
operations, energy usage, and logistics. After making
significant progress in this area, it should consider balancing
any remaining unavoidable emissions.
Carbon neutral and net zero are two different approaches aimed
at reducing the environmental impact of greenhouse gas
emissions. While both concepts support sustainability efforts,
they differ significantly in the strategies they adopt and the
outcomes they aim to achieve.
Here are the key differences:
| Topic |
Carbon Neutral |
Net Zero |
| Emissions |
Includes Scope 1 and Scope 2 emissions. |
Includes Scope 1, Scope 2, and Scope 3 emissions. |
| Reduction vs. Offsetting |
A significant portion of emissions is offset through
carbon credits.
|
Prioritizes actual emissions reduction with minimal
reliance on offsets.
|
| Long-term Goal |
An intermediate step to achieving broader climate goals.
|
Transforms operations fundamentally to eliminate
emissions.
|
| Verification |
Can be verified through standards such as PAS 2060,
focusing on the reliability of offset projects.
|
Requires adherence to internationally recognized
frameworks, such as the Science Based Targets initiative
(SBTi), ensuring emission reductions align with global
climate goals.
|
| Actions |
Purchase of carbon credits to offset calculated emissions.
|
Efforts to restructure all operations, supply chains, and
energy usage to minimize emissions.
|
| Timeline |
Can achieve targets in a short time frame through carbon
offset projects.
|
Typically requires long-term goals due to significant
operational and structural changes.
|
| Business Impact |
Can be achieved without major changes in business
operations, making carbon neutral goals more accessible.
|
Requires comprehensive changes in business practices,
potentially leading to innovation and new efficiencies.
|
| Public Perception |
May be viewed skeptically due to reliance on offsets.
|
Often seen more positively as it includes a commitment to
real emissions reduction, which can be proven.
|
The concepts of carbon neutral and net zero are crucial in the
fight against climate change. Both terms play different roles in
comprehensive emissions reduction strategies. Understanding the
approaches behind these terms helps governments, companies, and
individuals take meaningful steps toward creating a sustainable
future.
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Is net zero the same as carbon neutral?
No, net zero and carbon neutral are different concepts. Carbon
neutral refers to balancing a company's emissions released into
the atmosphere through various projects and carbon credits. Net
zero, on the other hand, requires reducing greenhouse gas
emissions as much as possible and balancing the remaining
emissions through methods like carbon capture.
How to become carbon neutrality?
To become carbon neutral, a company must first calculate its
carbon footprint. Then, carbon offsetting can be achieved by
purchasing carbon credits, supporting reforestation projects, or
investing in renewable energy projects.
How long does it take to reach net zero?
Reaching net zero is generally considered a long-term goal as it
requires significant structural and operational changes.
Companies need time to develop and implement strategies to
minimize emissions.
Are carbon credits and carbon certificates the same
thing?
No, carbon credits and carbon certificates are different
concepts. Carbon credits are units given to offset one ton of
carbon dioxide emissions. Carbon certificates are documents that
prove a company has achieved a certain amount of emissions
reduction over a specific period.
Why are sustainability goals important?
Sustainability goals help combat climate change while also
enabling companies to use resources more efficiently, enhance
their brand value, and comply with legal requirements.
