Are You Confused About Net Zero and Carbon Neutral?

What distinguishes the two, and what requirements will the new Greenhouse Gas Emissions standard ISO 14068 entail?

PAS 2060, a Publicly Available Specification for indicating carbon neutrality, emphasises that "carbon neutral" should encompass all scopes, not just scope 1 & 2 (fuels burned on site and in vehicles, as well as electricity consumption). However, the term "carbon neutral" has increasingly been utilized to refer solely to operational emissions in recent years, overlooking the value chain (scope 3) even though it accounts for 70-95% of most companies' emissions.

For a company to be genuinely carbon neutral, it must minimise emissions from all sources as much as possible and offset or actively eliminate any remaining emissions.

Net Zero adopts the same notion but on a broader scale, aiming to reduce emissions from all sources as much as possible and counterbalance any remaining emissions through atmospheric removals. This can be achieved by supporting natural systems that sequester carbon, or via technologies like carbon capture and storage or subterranean solid carbon sinks.

ISO 14068 will be a certifiable standard ensuring that all scopes of emissions are taken into account.

Moving forward, we must exercise greater caution regarding avoided emissions (e.g. technology sharing to decrease reliance on wood burning) since this approach prevents potential emissions without actively eliminating them. Essentially, it transfers emission shares between emitters while the global objective is minimizing total emissions rather than just reducing them in one area and increasing them in another. Supporting low-carbon international development is crucial, but we can expect changes in how avoided emissions are valued in future offsetting. For instance, a 2:1 offset credit ratio for avoided emission projects could ensure overall net zero emissions, with every tonne emitted in location A being compensated by two tonnes prevented in location B.

In summary, a carbon-neutral company is also net zero (calculated annually), as both scenarios necessitate an equal balance between carbon emissions and removals.