Introduction to Carbon Offsetting project

By:Edmond Research and Development | 03/12/2022

More and more the words like Carbon Neutral or Carbon Credit or Carbon Offsetting are present in the world of sustainability. Entities, they can be private or public companies or associations, can leverage on Carbon Offsetting projects on their path to become Net Zero.  

It would important, for our perspective, that the Carbon Offsetting solutions are left as a final step of a wider sustainability strategy where the actions to reduce the CO2e emissions play the majority of the efforts, otherwise it would become a weak strategy subject to so called “green washing” criticisms. 

How do carbon offset projects and credits work?

Being our Earth a closed set, every tonne of emissions reduced by an environmental project creates one carbon offset or carbon credit. Companies can invest in these projects directly or buy the carbon credits in order to reduce their own carbon footprints.

Which kind of projects they can be? Here is a macro categorization: 

Nature-based carbon sequestration. Biological sequestration absorbs CO2 emissions through the growth of vegetation and the continued storage of some of the carbon in plant tissues and organic materials derived from plant tissues (e.g. stored in the soil). Other examples include biochar (long term carbon storage from biological sources), and afforestation initiatives (e.g. tree planting on degraded landscapes).

Renewable energy. Renewable Energy projects include hydro, wind, and photovoltaic solar power, solar hot water and biomass power and heat production. Many renewable energy projects have high up-front capital costs, although they may offer high rates of return, and their operating costs are often minimal once built. Carbon offsets help support these projects by providing an additional revenue stream to offset their high up-front capital costs.

Methane capture. Methane’s global warming potential is about 28 times greater than that of CO2, and thus preventing methane emissions can have significant environmental benefits. Methane is emitted by landfills, during wastewater treatment, in natural gas and petroleum systems, from agricultural activities (livestock and rice cultivation), and during coal mining. Methane is basically ‘natural gas’ and can therefore be captured and used as a source of energy. Such projects include those that capture and purify methane in wastewater treatment plants or landfills and use it for electricity production or the production of another form of energy. 

Not all initiatives can be classified as real Carbon Offsetting Projects.  Based on  ICROA: The International Carbon Reduction and Offsetting Alliance, each project needs to be:

  • Real: All emission reductions and removals – and the project activities that generate them – shall be proven to have genuinely taken place.
  • Measurable: All emission reductions and removals shall be quantifiable, using recognized measurement tools (including adjustments for uncertainty and leakage), against a credible emissions baseline.
  • Permanent: Carbon credits shall represent permanent emission reductions and removals. Where projects carry a risk of reversibility, at minimum, adequate safeguards shall be in place to ensure that the risk is minimized and that, should any reversal occur, a mechanism is in place that guarantees the reduction or removals shall be replaced or compensated. The internationally accepted norm for permanence is 100 years.
  • Additional: Additionally is a fundamental criterion for any offset project. Project-based emissions reductions and removals shall be additional to what would have occurred if the project had not been carried out.
  • Independently verified: All emission reductions and removals shall be verified to a reasonable level of assurance by an independent and qualified third-party.
  • Unique: No more than one carbon credit can be associated with a single emission reduction or removal as one metric ton of carbon dioxide equivalent (CO2e). Carbon credits shall be stored and retired in an independent registry.

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