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Monday, 6. February 2023

What is the difference between climate neutral and net zero?

No matter what we do, whether we are engaged in economic activity, moving around, using or offering products and services, one thing is certain: our private and professional activities are associated with a carbon footprint and have an impact on our climate. No matter how sparingly we act, a residual carbon footprint will remain.

Climate neutrality:

Climate neutrality is when carbon emissions caused by an activity, a product or a company are offset by supporting a climate protection project. The carbon footprint is offset via a CO2 sink elsewhere. In the process, it is important to include all greenhouse gases caused. Greenhouse gases are then converted into their CO2 equivalent (also expressed as greenhouse gas potential). This is a universal unit of measurement for indicating the global warming potential, expressed in units of carbon dioxide. One unit of methane (CH4), for example, has about 28 times the climate impact of CO2, and is therefore equivalent to 28 units of CO2-eq.

To calculate a Corporate Carbon Footprint, the entire value chain must be considered. This includes the following three categories:

 

• Scope 1: the direct CO2 emissions of a company, for example the stationary combustion of fossil fuels and company vehicles.
• Scope 2: the indirect CO2 emissions of a company, referring to purchased electricity, steam, heat or cooling
• Scope 3: the indirect CO2 emissions that are often not under the direct influence of a company. A distinction is made here between upstream and downstream CO2 emissions. Upstream CO2 emissions at companies often have to do with the purchase or manufacture of a product or service, downstream CO2 emissions are often associated with the sale of a service or product.

Scope 1, Scope 2 and Scope 3 thus show all CO2 emissions along a value chain.

Therefore, climate neutrality is achieved when, in a first step, the carbon footprint is calculated, CO2 emissions are avoided and reduced if possible, and the remaining CO2 footprint (unavoidable CO2 emissions) is offset or compensated for via a climate protection project. You can think of a climate protection project as a carbon sink outside a company. If this is done in equal parts, the balance of CO2 emissions is offset. It is often difficult for companies to reduce Scope 3 emissions, as a company cannot always influence these directly, because they are often caused by third parties (e.g. upstream or downstream transport by company X). The trio of avoid, reduce and compensate applies 

Net zero

Net zero also achieves climate neutrality, but under stricter requirements. It is a further development of climate neutrality and focuses primarily on CO2 reduction. Net zero always includes a commitment to CO2 reduction. Here, CO2 reductions must be achieved in line with the 2 degree target, ideally with the 1.5 degree target of the Paris Agreement. With net zero, companies and enterprises commit to reducing their Scope 3 emissions by 90% in the long term. This commitment is also a prerequisite for the Science Based Targets approach, a carbon reduction pathway defined with science-based targets. The SBTi only assesses real CO2 reductions over a period of at least ten years - without taking into account carbon compensation (carbon offsetting) through climate protection projects. The Science Based Targets Initiative (SBTi) is currently developing a first net zero standard for setting long-term, ambitious and science-based net zero targets for companies and organisations. Incidentally, a simplified procedure for participation in the SBTi has been created for SMEs.

In the short term, it is impossible to reduce all CO2 emissions to zero. Therefore, carbon offsetting remains an important part of the overall solution. Carbon offsetting can also be described as a bridging technology. Many climate protection projects in the voluntary carbon offset market also support other UN Sustainable Development Goals (SDGs).

For example, many projects create jobs and training places and promote new technologies in the host countries, thus supporting the local population and contributing to economic development. Nature projects contribute to the conservation of biodiversity. In addition to the climate goal (SDG No. 13 Sustainability Goal) climate protection projects have a high added value.

CO2 avoidance projects are implemented by adopting various approaches. Forest protection projects are probably the best-known carbon avoidance projects; here, CO2 emissions are avoided that occur through clearing or deforestation. Planting trees is referred to as carbon removal. These projects remove and sequester CO2 over a long period of time. Technological solutions such as direct air capture and storage are relatively new. Here, CO2 is extracted and stored in the cavities of empty oil and gas fields or in deep sediment layers. However, these new technologies are still very expensive.

carbon-connect AG enables companies, organisations and private individuals to access national and international climate protection projects in all current technologies and standards. The internationally recognised standards include the Gold Standard, CDM, Plan Vivo and VCS/VERRA or Social Carbon Standard, among others.