Navigating voluntary carbon offsets is not easy and understanding why, how, and where to invest to make a difference is crucial, say Stantec’s Jonny Riggall and Francis Wiese.
The carbon credit market is currently valued at over £300m a year and is growing fast, as many organisations include carbon offsets in their climate strategies. Navigating the voluntary offsets markets, however, is not easy, nor are all carbon offsets created equal. Due to the sheer volume of organisations and governments declaring carbon neutral or net zero carbon goals, there are emerging concerns in this space.
Good offsets are not cheap, cheap offsets are not good
With plenty of offset providers already established and many more on the horizon, at face value there appears to be no shortage of certified offsets that meet international standards. But certified carbon offsets are not equal in terms of effectiveness at removing CO2, permanency, or sustainability. The voluntary carbon offset market is therefore coming under scrutiny as corporations start to understand the difference between declarations on carbon neutrality versus net zero carbon.
For net zero carbon, every gram of carbon emitted would need to be directly removed from the atmosphere. It also has a geographical condition to ensure double counting of carbon emission reduction benefits are not occurring.
Standards for carbon neutrality (such as PAS2060), alternatively, allows for using any certified carbon offset from anywhere in the world, including paying other actors to avoid their emissions.
Having recently reviewed four commercial offset providers offering a combined 37 potential carbon offset projects, only eight projects offered permanent carbon removal offsets. The vast majority of voluntary offsets on offer by the suppliers relate to carbon emission avoidance projects (i.e. paying someone else to avoid emitting more carbon). In addition, several certified carbon removal projects offer no guarantees on permanency in carbon removal. Your offsets may be going up in smoke. . . literally!
To achieve net zero standards, carbon offsetting would need to focus on direct carbon removal (DCR) projects that result in reduced levels of carbon in the atmosphere and achieve a real physical outcome, through a nature-based solution (i.e. biomass), or technological carbon capture (compress CO2 gas).
The big problem is that avoidance offsets are cheap; it’s cheap to replace a cooking stove (£6/tonne). It is not cheap to directly removed carbon from the atmosphere (£100-£1000/tonne). Cheap avoidance offsets are easier and quicker to deliver, and even easier to sell. But they make no contribution to reduce greenhouse gases currently in the atmosphere to slow down the warming of our planet.
Massive gap between supply and demand
Carbon removal projects, like nature-based solutions, certified to international standards, take years to establish. Currently there are very few DCR projects available in the UK, which means demand for offsetting for is already outstripping the supply of solutions. The current marketplace could fail to meet the need by all those organisations and governments that have pledged to be net zero carbon.
We need DCR projects in all their guises. Biodiversity targets such as afforestation quotas are important, but just one element required to reach net zero. By 2050, the UK needs four times the global capacity for direct carbon capture with no national planning strategy for, yet 2050 is 29 years away. The lack of urgency is impacting the pace at which this industry needs to be supported, financially and through policy.
Achieving net zero whilst supporting high-quality carbon removal projects
The Oxford Principles for Net Zero Aligned Carbon Offsetting published in September 2020 is a fantastic starting point for any organisation looking to inform their climate strategy. It sets out clear consideration of these issues and guiding principles for moving towards a meaningful carbon emission reduction strategy.
Yet the market entry point for direct carbon removal projects is still too high today to encourage most organisations to get to net zero. High-cost, high-quality, certified offset credits, however, are not the only solution. Indeed, given the shortness of supply, other approaches are needed, at least in the short-term.
Navigating the voluntary carbon offsets is not easy. With the carbon credit market growing exponentially, its vital to understand why, how, and where organisations should invest to actually make a difference. Investing in, constructing, supporting, and legislating all the carbon offsetting and removal tactics at our disposal is a matter of global climate urgency.
Jonny Riggall is director, built environment and Francis Wiese is national marine discipline lead, both at Stantec.