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May 23, 2024

The pitfalls of carbon removal and offsetting

Achieving net-zero emissions has become the holy grail for businesses striving to mitigate their environmental impact. However, as the urgency to address carbon emissions intensifies, the methods used to achieve net zero are under increasing scrutiny. While carbon removal and offsetting have been touted as solutions, recent revelations and emerging frameworks suggest they may not be as effective as once thought. Instead, there is a growing consensus that measuring and reporting financial-grade, auditable CO2e data is the true path to meaningful emissions reductions.

Let’s start with what we mean by ‘net-zero’ emissions. The ‘net’ part refers to the balancing of gross CO2e emissions and removals over a given period (e.g. by 2040) to achieve net-zero emissions. Only offsets that remove (not reduce or avoid) CO2e emissions qualify. The ‘zero’ part refers to the reduction of CO2e emissions to as close to zero as possible and only after that point to the subsequent use of removal offsets to achieve a net zero position.

One major issue with carbon removal and offsetting is the lack of transparency and accountability in the process. A report by the Financial Times, highlighted the pitfalls of relying on forest carbon offsets, revealing that some of the largest providers were essentially selling worthless credits. The investigation found that the offsets did not result in the promised emissions reductions, undermining the integrity of the entire offsetting system.

Similarly an exposé by The Guardian, in January, 2024, shed light on the shortcomings of forest carbon offsets, indicating that they may not deliver the environmental benefits they claim. The investigation revealed discrepancies in the verification and monitoring of forest carbon projects, casting doubt on the reliability of offsetting as a mechanism for achieving net zero.

These revelations along with a recent study by King’s Business School regarding emissions gaming, underscore the inherent risks associated with carbon removal and offsetting schemes. Without robust verification mechanisms and stringent oversight, there is a significant risk of greenwashing, where companies claim to be mitigating their emissions without actually reducing their carbon footprint. This not only undermines the credibility of corporate sustainability efforts but also hampers progress towards meaningful climate action.

In contrast, working with a partner such as Omnevue that measures and reports financial-grade, auditable CO2e data offers a more transparent and reliable approach to emissions reduction. By adopting standardised methodologies and rigorous auditing processes, businesses can accurately track their carbon emissions and identify areas for improvement. This approach not only ensures accountability but also enables companies to make informed decisions about where to invest in emissions reduction initiatives.

Furthermore, auditable CO2e data provides investors, consumers, and other stakeholders with greater confidence in a company’s sustainability performance. With increasing pressure from investors and regulatory bodies to disclose environmental metrics, reliable carbon accounting is essential for maintaining credibility.

The establishment of frameworks such as the EU’s carbon removal certification scheme is a step in the right direction towards addressing the shortcomings of carbon removal and offsetting. However, greater emphasis must be placed on verifiability and accountability to ensure that carbon offsetting initiatives deliver genuine emissions reductions. 

The King’s Business School ‘Emissions gaming’ study advised ‘Handle with caution: ESG data is plagued with gaps and holes – and we must treat it as such.’

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