Some of the key benefits of carbon offsetting may include:
- Meeting emission-reduction targets alongside working towards long-term sustainability changes and broader decarbonisation goals
- Meeting customer, investor and employe expectations regarding reducing carbon emissions • Enhanced brand reputation and value
- Increased customer loyalty and sales
- Meeting other strategic business goals, such as Reconciliation Action Plan targets and aligning with the Sustainable Development Goals
- Supporting industry leadership
- Marketing synergies from project co-benefits
- Delivering co-benefits beyond carbon reductions, including biodiversity, gender equality and Indigenous employment
- Inspiring employees to engage in sustainability and carbon reduction activities, in turn reducing your costs and supporting your goals.
Carbon offsetting is a critical part of climate risk management strategies, not just at the tail end once all other options are exhausted. Companies can do both offsetting and reduction – it doesn’t have to be one or the other. Only reducing emissions does not compensate for all emissions and is slow as in many sectors the technology to do so may not exist yet, for example.
Only offsetting emissions doesn’t address underlying problems and relies to heavily on carbon credits. Reducing emissions then offsetting unavoidable emissions is also slow. However, offsetting now and reducing emissions towards 2050 as part of a broader long term decarbonisation strategy aims to address all emissions and has immediate impact. There is a scientific consensus that supports using high-quality carbon offsets, avoidance and removals to compensate for residual emissions that have not yet been reduced by other means.
Offsetting today also has the advantage of:
- building internal capacity in carbon markets
- prices in the cost of carbon into doing business today
- helps drive further investment into much needed climate action projects and related positive impacts such as community and biodiversity benefits
- demonstrates sound risk management in terms of new regulatory operating environments.
The main difference between these methods is that carbon removal captures carbon that has already been emitted into our atmosphere, such as through nature-based solutions including reforestation and blue carbon sinks.
Whereas carbon avoidance projects prevent emissions from being released in the first place, through methods including renewable energy displacing fossil fuels and preventing deforestation.
The price of carbon credits can vary depending on the location, size and the type of project. TEM’s team can help you to tailor a portfolio of carbon credits that meets your budget expectations and delivers against the strategic drivers important to you and your business.
Learn more about carbon projects.
One carbon offset represents one metric tonne of greenhouse gas emissions reduced or removed from the atmosphere. A carbon offset is created by either:
- Removing one tonne of emissions from the atmosphere by for example planting forests, or
- Preventing one tonne of emissions from reaching the atmosphere by for example replacing a fossil-fuel burning power plant with a wind farm.
Companies, processes and products become known as ‘carbon neutral’ when they rigorously calculate their carbon emissions, reduce them as much as possible and then compensate for the equivalent of the remaining emissions via purchasing carbon credits that support carbon projects. In Australia, companies become certified carbon neutral via Climate Active, an Australian Government Initiative.
‘Carbon credit’ and ‘carbon offset’ are often used interchangeably by many people to mean the same thing, but they’re not exactly the same.
A carbon credit represents one metric ton of carbon dioxide (CO2) avoided or removed from Earth’s atmosphere (see more on this on our understanding carbon credits page). Carbon credits becomes a carbon offset when used for carbon offsetting. Carbon credits also have other uses as tradable units.
‘Net zero’ refers to achieving an overall balance between greenhouse gas emissions produced and greenhouse gas emissions taken out of the atmosphere. It is the internationally agreed upon goal for mitigating global warming in the second half of the century. The term net zero is important because – for CO2 at least – this is the state at which global warming stops.
The IPCC concluded the need for net zero CO2 by 2050 to remain consistent with 1.5C. The Paris Agreement underlines the need for net zero.
Just like wine, the ‘vintage’ of a creditindicates the year that the credit was created. For example, a 2016 vintage from a forest conversation project denotes the tonne of carbon measured and independently verified through the additional growth of the forest in that year. The vintage of the offset can sometimes influence the price but is part of a much larger picture such as the location, size, verification standard, and value of the non-carbon benefits.
TEM only supports carbon offset projects that are verified at the highest international standards. Of course, it is critical to ensure that the emission reductions generated by these projects are actually occurring. This is the work of accreditors like the VCS Program and the Gold Standard to ensure that once projects have been certified against rigorous criteria, project developers can then be issued tradable carbon offsets.
We go beyond international requirements by carrying out our own extensive due diligence for every project to ensure this. See our approach for more information.
TEM has extensive expertise in carbon project origination and can offer a complete suite of project development services, assisting in the development of projects or taking ownership and management of the entire project. With teams located within Australia and across the Asia Pacific region, our experts have a wealth of knowledge about the process of developing your carbon project.
Owning your own project is suitable for large organisations wanting to secure long-term supply through the acquisition of an existing de-risked carbon project for either compliance reasons or to support their long-term voluntary targets. TEM can also stay on as the project manager to assist you while allowing your company full ownership of the asset.
We can retire offsets whenever fits your business cycle. We typically retire on an annual basis, but can also do it more frequently – e.g. monthly, bi-annually.