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Carbon Neutral vs. Net Zero: let’s get the terminology right!

Alexanne Heurtier
As the fight against climate change becomes more urgent, the private sector’s role is crucial to decarbonize and decrease emissions.
To respond to the climate emergency, hundreds of economic actors are willing to change their way of thinking, producing, and operating. They are increasingly committing to initiatives such as the Race to Zero Campaign by the UNFCCC or the Net Zero Initiative by Carbone 4 in France. In 2015, the Paris Agreement set out a global framework to avoid the dangerous impacts of climate change by limiting global warming to well below 2°C. To be aligned with this goal, we must reach collective carbon neutrality by 2050, which is the aim of the previously mentioned commitments. But, how can organizations play a key role?

The 2018 publication of the Special Report of the IPCC (1) helps us better understand why and how to follow a 1.5°C trajectory. The report analyzes two scenarios (1.5°C and 2°C) and highlights a solution to avoid a catastrophic future: reaching global net zero by mid-century. Between 2015 and 2018 (the targets set by the Paris Agreement and the publication of the IPCC report), no clear definition was given to net zero or neutrality; however, in the annex to the latest report, organizations can now find a glossary of climate neutrality-related terms as well as terminology that can help them define their goals (2).

Economic actors are increasingly seeking to reach different climate goals, mostly by 2030 or 2050. Their commitments refer to different net zero terms including carbon neutrality, net zero or carbon negative. These are the three main notions used by organizations and countries. Although similar, there are subtle differences that are crucial to examine. 
Besides, it is important to highlight that there is a difference between net zero emissions at a corporate level and global net zero emissions. A corporation claiming to be neutral is actually contributing to global neutrality. Being carbon neutral at a corporate level is limited to the offsetting of the company’s emissions. In contrast, global neutrality means that there is a balance between global emissions and absorptions. For more information about this, discover our “Climate contribution vs Carbon offsetting” article: https://climateseed.com/blog/climate-contribution-vs-carbon-offsetting.

1. First thing first: Which scope are we talking about?

Before explaining the three different net zero terms, it is necessary to understand that the Greenhouse Gas Protocol, the most widely used and internationally recognized greenhouse gas accounting standard, divides emissions into three scopes.
  • Scope 1: Direct emissions related to on-site fuel combustion or fleet vehicles;
  • Scope 2: Indirect emissions related to emission generation of purchased energy, such as heat and electricity;
  • Scope 3: Other indirect emissions related to both emissions from upstream and downstream business activities. 
Scope 3 emissions are usually far larger than the two others; however, these emissions are more complicated to measure. When claiming neutrality or having reached net zero emissions, a corporation needs to specify which scopes it is considering to ensure full transparency. When talking about a net zero strategy, all three scopes of emissions need to be addressed.

Furthermore, companies and countries should determine the timeframe of their strategy: are these short-term actions or long-term ones? Some companies claim to be neutral or to have reached net zero, but have not indicated the period: is it neutral for a year? Or since the creation of the company?

Most of the time, commitments from companies and organizations are based on the IPCC report vocabulary. Almost all other reports released by the Carbon Disclosure Project (CDP) and Science Based Targets initiative (SBTi) also refer to the terms defined by the IPCC.

2. Carbon neutral or net zero CO2

Carbon neutrality refers to net zero CO2 emissions and is achieved when anthropogenic CO2 emissions are balanced globally by anthropogenic CO2 removal over a specific period (3). According to the IPCC report, limiting global warming to 1.5°C means that organizations and countries should reach net zero CO2 by 2050. Reaching net zero CO2 means having a consistent climate strategy. Therefore, organizations should be aware that net zero strategies do not only consist of carbon offsetting, as many might believe. It requires essential preparatory steps: they must first measure their environmental impacts and understand their emission sources as part of a comprehensive analysis. 

Once an organization understands its different emission sources, especially the “hot-spots”, it can set up a comprehensive sustainability strategy by following the below 3 steps: 
  1. Eliminating sources of CO2 emissions within the entire value chain (scopes 1, 2, 3); the SBTi refers to abatement. It means reducing or eliminating sources of CO2 emissions associated with the operations of a company and its value chain until reaching a consistent level of residual emissions. Those emissions are the ones that cannot be abated due to constraints, such as economic or technological ones. Some industries will always have to consider residual emissions, like agriculture with crops and cattle breeding.
  2. Neutralizing refers to the removal and permanent storage of atmospheric carbon to counterbalance the effect of releasing CO2 into the atmosphere through Carbon Dioxide Removal (CDR) activities such as restoring natural carbon sinks or technology. It consists of innovative systems that could redirect emissions not in the atmosphere yet by capturing them directly after being released and sequestering them in geological soils. According to the 2019 report of the European Zero Emissions Platform (ZEP), such technologies could add extra costs in the short-run (in the range of 12€ to 30€ per tonne) but will be very competitive in the fight against climate change (4).
  3. Compensating, or contributing, can be used to address value chain residual emissions to reach a net zero status. It includes direct investment in emission reduction projects through the purchase of carbon credits on the Voluntary Carbon Market. These projects not only capture or avoid CO2 emissions, but also have environmental and social co-benefits on local communities. As long as organizations have residual emissions, they will have to continue to support emission reduction projects to maintain a net zero state. 

The order of these actions follows a logic that must be respected by actors that want to be engaged in a net zero strategy. Besides, neutralization and compensation measures should not be a substitute for emissions reduction measures.

3. Net zero emissions or net zero GHG 

The concept of net zero emissions is very similar to carbon neutral, but the scale is different. Net zero emissions strategies include every type of greenhouse gases (GHGs). Carbon dioxide is one of the most significant ones because it remains longer in the atmosphere than others and represents a major part in emissions from human activities (especially fossil fuel burning). However,  one needs to be aware that there exist other GHGs: the most dangerous ones in terms of contribution to the greenhouse effect and impact on health being nitrous oxide, methane, and halocarbons from human activities (5). Water vapor is also a major heat-trapping gas, but it is a natural phenomenon rather than directly tied to human activities.
Thus, net zero emissions are reached when human activity is no longer contributing to global warming: anthropogenic emissions of GHGs in the atmosphere are balanced by anthropogenic removals over a specific period.

According to the World Resources Institute (WRI) and based on the data provided by the IPCC report, net zero GHG emissions can only be reached from 2063 (6). Current measures taken by organizations and countries are not adequate to align with the 1.5°C trajectory. Net zero strategies need to be reinforced and organizations must commit to reduce and offset each emission type. 
IPCC Special Report on Global Warming of 1.5°C and World Resources Institute

One of the major challenges to achieving net zero emissions is the quantification of those emissions. CO2 emissions are relatively easy to measure, but other greenhouse gas emissions are more complex. Some climate metrics to compare emissions of different gases have been developed such as global warming potential, global temperature change potential, time horizon, or CO2 equivalent (3).

The strategy to achieve net zero emissions is the same as explained above, except that it includes all greenhouse gases and not only CO2 emissions.

4. Carbon negative or net negative emissions

Finally, when an organization has reached a state of net zero emissions, it could also go beyond and offset more than just its residual emissions. It means that a company removes more carbon dioxide from the atmosphere than it emits, thus creating a negative balance at the global scale. You may have also heard about the term “climate positive” which means exactly the same thing.
Some companies have committed to reaching carbon negative emission, but an outstanding example is Bhutan. The Asian country was the first one to become carbon negative in 2017 thanks to extensive forests covering more than 70% of its territory, but also renewable energy it is exporting (7). Indeed, the country is producing more hydraulic electricity than it needs, and this production was aiming to represent 17 million carbon offset credits in 2020. On the whole, Bhutan emits approximately 1.1 million tCO2 per year while its forests sequester three times this figure. 
As explained on the graph, reaching net negative emissions consists of having a green part (removing emissions) more important than the blue part (remaining emissions). However, organizations first need to focus on avoiding emissions (the grey part) to achieve net zero emission (when the blue line is crossing the 0-axis).

World Resources Institute

The IPCC presents in its report the role of CDR, or technology based-solutions, as an additional solution since natural sinks are not enough to absorb the huge amounts of GHG in the atmosphere. What are those technologies? For example, one may have heard about bioengineering with Carbon Capture and Storage (BECCS), which is a process that captures biomass emissions, or Direct Air Capture and Storage (DACCS), a chemical process (8).

Net zero does not mean that there won’t be any emissions, but that the world needs to remove as much emissions as emitted or more. It allows us to contribute to gradually eliminating emissions that have been accumulating in the atmosphere since the first industrial revolution. Nowadays, neither technology nor a large number of trees could offset entirely all emissions in the atmosphere. This is why it has become important to invest in the development of new technologies and methodologies to achieve this. For example, this is the aim of the worldwide contest recently launched by Elon Musk, CEO of Tesla. For four years, individuals, organizations, or academic teams will be able to present projects of innovative technologies that capture carbon emissions from the atmosphere. Participants will have the opportunity to win from $1 million to $50 million to implement and develop their ideas (9). Finding new ways to capture emissions is key to fight climate change as quickly as possible.

To conclude, even if the climate emergency needs “deeds rather than words”, it is very important for organizations and countries to be careful of the terminology they use. It reinforces their legitimacy and prevents them from being accused of malpractices.
In this article, we have shown that pledges need to be aligned with the 1.5° or 2° trajectory and how countries and companies can take measures to reach their climate goals.
So, should we favor certain vocabulary over others? The short answer is no. 
What is crucial however is to understand the meaning of the different terms and use them appropriately. 

  1. https://www.ipcc.ch/sr15/ 
  2. https://www.ipcc.ch/sr15/chapter/glossary/ 
  3. https://sciencebasedtargets.org/resources/legacy/2020/09/foundations-for-net-zero-full-paper.pdf
  4. https://zeroemissionsplatform.eu/wp-content/uploads/Cost-of-storage.pdf 
  5. https://www.nationalgeographic.com/environment/article/greenhouse-gases 
  6. https://www.wri.org/blog/2019/09/what-does-net-zero-emissions-mean-6-common-questions-answered
  7. https://www.climatecouncil.org.au/bhutan-is-the-world-s-only-carbon-negative-country-so-how-did-they-do-it/ 
  8. https://www.wri.org/blog/2020/06/6-ways-remove-carbon-pollution-sky 
Article written by Alexanne Heurtier