Carbon Offset, Offsetting, Neutralisation

What is Carbon Offset?

A carbon offset is a process to compensate or offset emissions of carbon dioxide or other greenhouse gases.

For example, an institution, business or individual can compensate the amount of carbon dioxide emitted during a flight by investing in a project that provides a carbon offset. This could be to support a project that reduces carbon emissions, such as building a wind farm, generating bioenergy or protecting forests.

There are two types of markets for carbon offsets, compliance and voluntary. In compliance markets, such as the European Union (EU) Emissions Trading Scheme, companies, governments or other organisations buy carbon offsets to comply with mandatory and legally binding limits on the total amount of carbon dioxide they are allowed to emit per year. Failure to comply with these mandatory limits in compliance markets results in fines or legal penalties.

For example, an institution, business or individual can compensate the amount of carbon dioxide emitted during a flight by investing in a project that provides a carbon offset. This could be to support a project that reduces carbon emissions, such as building a wind farm, generating bioenergy or protecting forests.

There are two types of markets for carbon offsets, compliance and voluntary. In compliance markets, such as the European Union (EU) Emissions Trading Scheme, companies, governments or other organisations buy carbon offsets to comply with mandatory and legally binding limits on the total amount of carbon dioxide they are allowed to emit per year. Failure to comply with these mandatory limits in compliance markets results in fines or legal penalties.

In voluntary carbon markets, carbon emitters are allowed carbon emitters to offset their emissions by purchasing carbon credits emitted by projects targeted at removing or reducing greenhouse gas from the atmosphere.

Carbon offset aims to help combat climate change by contributing to the goal of reducing greenhouse gas emissions.

Why Carbon Offset is Important?

Carbon offset reporting is important for several reasons. First, it helps companies to take responsibility for their environmental impact by quantifying the emissions that they have offset. Second, it allows companies to demonstrate their commitment to sustainability and to differentiate themselves from competitors. Third, it provides transparency to stakeholders, including investors, customers, and employees, who can use this information to make informed decisions about their engagement with the company.

Carbon Offset Works Consists of 3 Stages

1. Calculation

A carbon footprint calculation at corporate or product level is conducted in accordance with the relevant standards.

2. Reduction

Balancing the carbon footprint immediately might not be the appropriate action. First of all, mitigation options should be evaluated and the carbon footprint should be reduced as much as possible; the part that cannot be reduced is then balanced.

3. Balancing

After reduction, the remaining carbon emissions are compensated for.

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Can Sönmez

Senior Sustainability Advisor

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