Carbon offsetting, removal, and markets: a glossary of terms.
The topic of carbon offsetting and removal, as well as the language used, can be complex.
How do carbon neutrality and Net Zero differ? How does permanence relate to carbon offsetting? Why are carbon emissions measured as tCO₂e? We've put together a glossary of terms to help you keep track of all the terminology you'll encounter on your journey to a greener world.
Bookmark this glossary for whenever you need it again!
Additionality: a project has resulted in carbon emission reductions or removals in addition to what would have occurred in the absence of the project or “business as usual” scenario — so the project needed to exist for the extra emissions to be reduced or removed. It is an important, and long-standing principle within the voluntary carbon market.
Afforestation: establishment of a forest or stand of trees in an area where there was no previous tree cover.
Biochar: a carbon-rich material similar to charcoal, but produced by a specific method of heating biomass waste in a low-oxygen environment. It is then applied to soil where the carbon will be safely stored, whilst also improving the quality of the soil for plant growth.
Bio-oil sequestration: waste biomass (typically from agriculture) is converted into a stable, carbon-rich liquid known as “bio-oil”. The bio-oil is then injected deep underground, permanently storing the carbon.
Blue carbon: the carbon captured by living organisms in coastal (e.g., mangroves, salt marshes, seagrasses, etc.) and marine ecosystems, stored in biomass and sediments.
Carbon capture: a process in which CO₂ from industrial and energy-related sources is separated (captured), conditioned, and compressed. It is then stored safely, known as carbon capture and storage, or used to create products such as sparkling water or building materials, known as carbon capture and usage.
Carbon credit: a unit used to represent emissions removal or reduction/avoidance, sold by carbon projects to carbon buyers as a way to compensate for emissions produced elsewhere. One carbon credit is equal to one tonne of CO₂e reduction or removal.
Carbon drawdown: used as a synonym for carbon removal or CDR.
Carbon emissions: carbon dioxide that enters the atmosphere. This happens naturally through biological processes, like respiration, but is also caused by human activities, especially the burning of fossil fuels to generate energy. Carbon dioxide is one of several greenhouse gases that contribute to the greenhouse effect by absorbing infrared radiation, trapping heat and causing global warming.
Carbon footprint: the total amount of greenhouse gas (GHG) emissions produced by the actions of an individual, product, organisation or country, used as a measure of their climate change impact.
Carbon forward credits: carbon credits representing carbon removal or emissions avoidance that will take place in the future e.g. purchase of credits to finance the planting of a forest, where removal will take place once trees grow and sequester carbon.
Carbon market: a market where carbon credits can be bought and sold, creating a system where countries, businesses, etc., can be financially incentivised to reduce their carbon emissions by putting emission limits in place.
Carbon negative: a state in which a company, individual or country is responsible for a negative amount of carbon emissions i.e. less than zero. This means that they are offsetting more carbon emissions than they create via carbon removal or emissions avoidance projects.
Carbon neutral: where the total amount of greenhouse gas (GHG) emissions produced is offset in its entirety by either carbon removal or emissions avoidance, offsetting the impact. The term is usually used in association with products or businesses. NB: this is different to net zero, where offsets need to actively remove carbon from the atmosphere.
Carbon offset projects: projects designed with the purpose of carbon removal or emissions reduction. They use carbon offset credits as a financing mechanism. Once verified by a carbon standard, the project issues carbon credits equivalent to the amount of carbon the project will remove or avoid which can then be purchased by individuals or businesses who want to offset their own emissions.
Carbon offsetting: compensating for carbon emissions by financing projects that claim to make an equivalent reduction in carbon emissions.
Carbon registry: online systems to track carbon credits being issued to project developers and purchased by buyers. This includes retiring credits once purchased to avoid the risk of double counting; a certificate will usually be sent to the buyer as proof of retirement.
Carbon removal or Carbon Dioxide Removal (CDR): physically removing existing carbon from the atmosphere and storing it. This happens in nature (such as forests, soils and oceans) but it can also be achieved by technological solutions e.g. Direct Air Capture. Carbon removal or CDR is sometimes referred to as carbon drawdown.
Carbon sink: a reservoir that absorbs and stores carbon emissions. Usually refers to natural environments such as forests, oceans and soil.
Carbon standard: there’s currently no government-set standard for projects in the voluntary carbon market, so standards are being set by trusted, independent standards. The major internationally recognised standards include Gold Standard, Verified Carbon Standard (Verra), etc.
Co-benefits: important positive implications of carbon offset projects that go beyond carbon, to have other social and environmental impacts e.g. biodiversity or job creation.
Deforestation: the act of clearing a forest. Typically done to harvest wood as a resource, and/or to clear land for some other economic use e.g. as a palm oil plantation.
Direct air capture (DAC): the process of capturing CO₂ directly from the atmosphere. Chemicals are used to bind with the CO₂ in the air, and the CO₂ is then separated to produce a stream of concentrated CO₂. This CO₂ can then be stored or used in an end product (such as construction) — known as direct air capture and storage (DACS).
Double counting or double claiming or double issuing: when a carbon credit is used more than once, even though this would not further reduce or avoid emissions. When projects are certified, their carbon credits will be issued and retired in a carbon registry to prevent double counting from occurring.
Downstream emissions: includes all emissions occurring after the products leave the organisation’s control, i.e. distribution to retailers, consumer use, and waste
Emissions reduction or emissions avoidance: future emissions from fossil fuels are avoided or reduced through a project e.g. building a solar farm close to a city which is currently powered by a fossil fuel plant will result in fewer carbon emissions in the future.
Enhanced weathering: the speeding up of rock weathering or mineralisation as a way of removing and storing carbon. Rocks are ground up into small particles, increasing surface area and removing CO₂ from the atmosphere more quickly.
Ex-ante credits: carbon credits representing carbon removal or emissions avoidance that will take place in the future e.g. purchase of credits to finance the planting of a forest, where removal will take place once trees grow and sequester carbon.
Ex-post credits: carbon credits representing carbon removal or emissions avoidance that has already taken place and been measured.
Forest conservation: protecting a forest from being cut down, typically through incentivising landowners via income from carbon credits.
Forest management: implementing practices for the stewardship of forests. In carbon removal, this refers specifically to land management practices which result in increased carbon storage within forests.
Forestry carbon projects: there is a range of different ways that forests are used to avoid emissions and remove carbon from the atmosphere, which can be grouped together as forestry carbon projects. This includes afforestation, forest conservation, forest management, and reforestation. NB: forestry carbon offset projects are different to tree planting projects.
Greenhouse gas emissions: a gas that contributes to the greenhouse effect by absorbing infrared radiation, trapping heat and causing global warming. The primary greenhouse gases are water vapour (H₂O), carbon dioxide (CO₂), methane (CH₄), nitrous oxide (N₂O), and ozone (O₃).
Greenwashing: a company or product making itself appear to be environmentally friendly without having done the work to meaningfully reduce its environmental impact.
High-quality projects: trusted carbon offset projects that show permanent, additional and measurable carbon removal or emissions avoidance. They’re often verified (or in the process of being), although this isn’t always the case. They’re also more expensive, as they reflect the true cost of carbon removal/avoidance.
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Leakage: when a reduction in carbon emissions in one area simply shifts activity producing emissions elsewhere, reducing or negating the decrease in emissions e.g. a forest conservation project results in deforestation being avoided, but the company responsible for deforestation moves to a neighbouring forest and cuts down trees there.
Long-lived carbon storage: methods that store carbon for hundreds or thousands of years, which have a low risk of being reversed e.g. mineralisation.
Low-quality projects: carbon offset projects which are not verified and have no proof of permanent, additional and measurable carbon removal or emissions avoidance. They are typically cheap to purchase but have little or no climate impact — leaving those who buy them at risk of being perceived as greenwashing.
Mandatory Carbon Market (MCM): include emission trading systems (ETS) (i.e. a “cap and trade” mechanism) where there is a market to buy and sell allowances that permit emissions in order to comply with legal requirements associated with the reduction of greenhouse gas (GHG) emissions. The mandatory, compliance-based carbon markets are regulated by international, national or subnational governments or associated entities.
Mineralisation: occurs when CO₂ in the air reacts with minerals to become a carbonate, permanently storing the CO₂ in solid form. This happens naturally and is also known as “rock weathering”. The process can be sped up by rocks being ground up into small particles, increasing surface area and removing CO₂ from the atmosphere more quickly which is often referred to as “enhanced weathering”.
Nationally Determined Contributions (NDCs): the heart of the Paris Agreement and the achievement of its long-term goals. NDCs embody efforts by each country to reduce national emissions and adapt to the impacts of climate change.
Net zero: when a company reduces their greenhouse gas (GHG) emissions and neutralises the residual amount using carbon removal, resulting in no net impact. NB: this is different from carbon neutral where the emissions offset can be emissions avoidance or carbon removal.
Oxford Offsetting Principles: the Oxford principles for Net Zero-aligned carbon offsetting provide a framework for approaching business offsetting in the right way and supporting the growth of the carbon market; balancing immediate action with long-term impact whilst keeping costs feasible and taking into account how purchases should change over time to maintain the maximum possible impact.
Paris Agreement: a legally binding international treaty on climate change. It was adopted by 196 Parties at COP 21 in Paris, on 12 December 2015 and entered into force on 4 November 2016. Its goal is to limit global warming to well below 2, preferably to 1.5 degrees Celsius (°C), compared to pre-industrial levels.
Permanence: is how durable the carbon benefit from an offset project is. In addition, it considers the risk that that benefit could be reversed sooner than expected, for example, if a wildfire kills trees in a reforestation project before its completion
Project developers: organisations that design and implement carbon offset projects.
Reforestation: turning land that has previously been a forest but has been converted for some other use back into a forest.
Renewables: projects enabling the generation of renewable energy e.g wind turbines, solar farms or reducing reliance on fossil fuels for energy.
Scope 1 emissions: direct emissions from owned or controlled sources e.g. company vehicles.
Scope 2 emissions: indirect emissions from the generation of purchased energy e.g. purchased electricity.
Scope 3 emissions: all other indirect emissions that occur in the value chain, including both upstream and downstream emissions e.g. emissions associated with the use of products or services sold or used by an organisation.
Science-based target: a corporate sustainability initiative that meets three criteria: 1) it has a clearly-defined emissions reduction pathway, 2) it has a defined baseline amount, year and target goal date, 3) it’s set in line with the latest climate science needed to meet the goals of the Paris Agreement.
Sequestration: the process of capturing carbon dioxide from the atmosphere, stabilising it in solid or dissolved form and storing it safely. Usually refers to natural storage e.g. in seaweed or soil.
Short-lived carbon storage: methods of carbon storage which have a higher risk of being reversed e.g. reforestation.
Soil carbon: soil is made in part by broken down organic matter, so it contains the carbon that these plants or animals absorbed during their lifetime. This means that soil is a valuable carbon store or sink.
Sustainability report: a tool for a company or organisation to voluntarily communicate its performance in relation to environmental impact. Typically, these reports lack visibility and accountability as a way to approach business sustainability.
tCO2e: greenhouse gases are typically given as tCO₂e — tonnes of carbon dioxide equivalent. The equivalent means that the measurement includes greenhouse gases which aren’t carbon dioxide, converted into equivalent amounts of CO₂ based on warming potential e.g. methane which has 28–36 times the global warming potential of CO₂, so one tonne of methane would count as 28-36 tonnes of CO₂e.
Upstream emissions: includes all emissions occurring prior to the production activities that are controlled by the organisation, i.e., agriculture, refinement, packaging, etc.
Voluntary carbon market (VCM): a market enabling the voluntary purchase of carbon credits by a company or individual. This offers a mechanism for financing projects that reduce emissions or remove carbon from the atmosphere and a way for companies to take climate action by compensating for their emissions or contributing to carbon projects.
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There is a lot to learn when you're exploring climate change and carbon offsetting in a business setting; this isn't an exhaustive list of all the terminology you might encounter. If there’s anything we haven’t covered that you would like to learn more about, please get in touch.