Carbon neutral v net zero – understanding the key differences

In recent years, the conversation around climate change has intensified, bringing attention to the urgent need to address carbon emissions. Among the various strategies and terms used to describe efforts in tackling this crisis and to limit global warming, two concepts stand out: carbon neutrality and net zero. Though these terms are often used interchangeably, they represent different approaches to reducing carbon emissions, each with its own specific implications and methods.

To truly understand how these strategies work and how they contribute to limiting global warming, we must first explore what each term means and then examine their key differences, applications, and potential pathways toward creating a sustainable future.

What does carbon neutral mean?

Carbon neutrality refers to a state in which an organization, government, or individual balances the amount of carbon they emit with an equivalent amount of carbon removed from the atmosphere. In essence, carbon neutrality means achieving a “net-zero” balance of carbon emissions, but it does not necessarily require reducing emissions directly.

Instead, achieving carbon neutrality often involves offsetting carbon emissions by purchasing carbon credits, investing in renewable energy projects, supporting reforestation efforts, or financing carbon capture initiatives. 

This process, known as carbon offsetting, emphasizes the importance of verified projects that store or reduce carbon, such as reforestation and renewable energy initiatives, while also addressing concerns regarding the validity of such projects and the need for clear, credible plans that integrate genuine emission reductions along with carbon offsetting. While the goal is to counteract emissions, the entity pursuing carbon neutrality may still release a significant amount of carbon into the atmosphere.

Key points about carbon neutrality include:

• It focuses on balancing carbon emissions rather than reducing them entirely.
• Carbon neutrality can be achieved through carbon offsets, which compensate for emissions by funding projects that remove or reduce carbon from the atmosphere.
• It is often seen as a first step in addressing climate change, especially for entities that are unable to immediately reduce their emissions at the source.

For example, a business may continue to emit carbon through its operations but claim carbon neutrality by purchasing enough carbon credits to offset the emissions it produces. These credits may support initiatives such as renewable energy projects or reforestation programs, which help absorb carbon dioxide from the atmosphere.

While carbon neutrality is an important goal, it does not necessarily involve transforming the way businesses operate or significantly reducing the volume of emissions at the source.

What does net zero mean?

Net zero refers to the process of reducing GHG emissions to nearly zero and balancing any remaining emissions through removal methods like carbon capture. In contrast to carbon neutrality, net zero focuses on reducing emissions as much as possible before relying on offsets. Some companies aim to go beyond net zero to achieve a carbon-negative status, actively reducing more carbon emissions than they generate. 

Achieving net zero typically requires substantial changes in how companies and governments operate, including implementing clean energy solutions, improving efficiency, and lowering emissions across the supply chain.

Key points about net zero include:

• Net zero emphasizes lowering emissions at the source, across an organization’s entire operation, including supply chains 
• Any remaining emissions after reductions must be neutralized through carbon removal or other similar technologies.
• It requires setting science-based targets that align with the global goal of limiting global warming to 1.5°C, as set out by the Paris Agreement.

Net zero is often considered a more ambitious target than carbon neutrality because it requires a fundamental shift toward more sustainable practices. Businesses on a net zero trajectory typically set aggressive goals to eliminate emissions from their own operations, adopt renewable energy sources, and push for reductions throughout their supply chains.

For instance, a company pursuing net zero will work to decarbonize its operations, energy usage, and logistics, and only after making substantial progress toward eliminating emissions will it consider offsetting any residual emissions that cannot be completely avoided.

Key differences between the terms carbon neutral and net zero

While both carbon neutrality and net zero aim to reduce the environmental impact of GHG emissions, the approaches and ambitions differ significantly. Here’s a breakdown of the key differences:

Can net zero help to achieve carbon neutrality?

Net zero strategies can indeed help to achieve carbon neutrality, but the relationship between the two is not as simple as it may seem. While carbon neutrality can be achieved without drastically reducing emissions, net zero strategies involve significant efforts to cut emissions at the source, making them a critical component in achieving long-term carbon neutrality.

For example, a company on a net zero trajectory might first focus on reducing its emissions as much as possible by implementing renewable energy sources, improving energy efficiency, and redesigning its supply chain to be less carbon-intensive. Once these measures are in place, the company can then achieve carbon neutrality by offsetting any remaining emissions that cannot be eliminated.

In this way, pursuing a net zero strategy often puts organizations on the path toward carbon neutrality, but it is a more rigorous and thorough approach. While carbon neutrality may be achieved in the short term through offsets, net zero ensures that emissions are minimized, making carbon neutrality more meaningful and sustainable in the long run.

What does absolute zero mean?

While net zero allows for a small amount of emissions that can be offset through carbon capture and other technologies, absolute zero refers to the total elimination of global emissions. In other words, an entity that achieves absolute zero emissions emits no carbon or other greenhouse gases at all, without the need for offsets or compensatory measures.

Achieving absolute zero requires a complete transformation of energy systems, industrial processes, and transportation, as well as addressing emissions from all sectors of the economy. It involves phasing out fossil fuels entirely, switching to 100% renewable energy, and creating zero-emission technologies across all industries.

Key points about absolute zero:

• There are no residual emissions left to offset, meaning that all emissions have been eliminated entirely.
• Absolute zero is an ambitious goal that requires a full-scale shift to clean energy, zero-emission technologies, and decarbonized industrial processes.
• It is more difficult to achieve than net zero but represents the ultimate goal for addressing climate change in the long term.

Absolute zero represents the most comprehensive and ambitious approach to addressing climate change. While it may be difficult for many industries to achieve in the short term, particularly those heavily reliant on fossil fuels, it is the long-term target that aligns with the most stringent climate goals.

What are the standards and certifications for carbon neutrality and net zero?

Achieving carbon neutrality and net zero requires adherence to recognized standards and frameworks that guide businesses, governments, and organizations in measuring, managing, and mitigating their GHG emissions. These standards ensure transparency, accuracy, and accountability in the pursuit of sustainability goals. Below are some of the key certifications and frameworks for both carbon neutrality and net zero.

Carbon neutrality standards and certifications

PAS 2060: Specification for the demonstration of carbon neutrality

PAS 2060 is a widely recognized international standard developed by the British Standards Institution (BSI) that specifies how entities can demonstrate carbon neutrality. It requires organizations to quantify their carbon footprint, reduce their emissions, and offset any remaining emissions through verified carbon credits. PAS 2060 ensures transparency and accountability by requiring regular reporting and independent verification.

The CarbonNeutral Protocol

This is a global standard that provides a framework for achieving and certifying carbon neutrality. The CarbonNeutral Protocol helps organizations measure their carbon footprint, reduce emissions, and balance any remaining emissions through high-quality carbon credits. It is widely used by businesses to achieve credible carbon-neutral certification and is updated annually to reflect best practices and scientific advancements.

ISO 14064: Greenhouse gases

ISO 14064 is an international standard that provides guidance on quantifying and reporting greenhouse gas emissions, as well as verifying emissions reductions. It includes methodologies for measuring carbon footprints and calculating emission reductions and serves as a foundation for achieving carbon neutrality. Although it does not certify carbon neutrality directly, it forms a part of the process by establishing a transparent and standardized approach to emissions accounting.

Net zero standards and certifications

Science Based Targets initiative (SBTi)

The SBTi is one of the most recognized initiatives for setting and verifying science-based targets for reducing greenhouse gas emissions. It aligns corporate strategies with the Paris Agreement goals of limiting global warming to 1.5°C. The SBTi’s Net-Zero Standard provides guidance for companies to achieve net zero by focusing on deep emissions reductions across their value chains. Companies that meet the SBTi criteria are certified as having credible net-zero strategies based on the latest climate science.

The Climate Pledge

Launched by Amazon and Global Optimism, The Climate Pledge encourages businesses to commit to achieving net zero GHG emissions by 2040—ten years ahead of the Paris Agreement targets. Signatories must regularly measure and report greenhouse gas emissions, implement decarbonization strategies, and neutralize any remaining emissions with credible offsets. The Climate Pledge certification is a mark of leadership in net zero ambition.

ISO 14067: Carbon footprint of products

ISO 14067 specifies principles, requirements, and guidelines for quantifying and communicating the carbon footprint of products. It supports organizations in identifying emission hotspots in their product life cycles and reducing emissions accordingly. This standard helps in the transition to net zero by enabling companies to manage and mitigate their own emissions and those of their supply chain.

Race to Zero Campaign

The Race to Zero is a global campaign initiated by the United Nations Framework Convention on Climate Change (UNFCCC) to rally companies, cities, regions, and investors around net zero emissions by 2050. Participants commit to science-based targets and the pursuit of net zero through transparent reporting and accountability. The campaign has gained global momentum and serves as a platform for entities demonstrating leadership on the path to net zero.

The importance of verification and accountability

Adhering to recognized standards and certifications ensures that businesses, governments, and organizations follow credible pathways to carbon neutrality and net zero. These standards provide frameworks for:

• Accurately measuring greenhouse gas emissions across an organization’s own emissions and supply chain.
• Establishing science-based targets for emissions reduction that align with international climate goals.
• Relying on verified carbon credits for emissions that cannot be eliminated, ensuring that offsets are real, measurable, and permanent.
• Regularly reporting progress, with third-party verification ensuring accountability and transparency.

By aligning with these standards and pursuing certifications, organizations not only demonstrate their commitment to addressing climate change but also position themselves as leaders in sustainability. Certifications help build trust with stakeholders, including customers, investors, and regulatory bodies, showing that an organization’s carbon neutrality or net zero trajectory is both credible and verifiable.

How can you set effective net zero emissions targets? 

Setting effective net zero targets involves a strategic approach that aligns with scientific consensus and practical business considerations. Start by measuring your current greenhouse gas emissions across all scopes—Scope 1 (direct), Scope 2 (indirect from energy), and Scope 3 (indirect from the supply chain).

Next, set ambitious yet achievable targets based on the latest climate science, such as those recommended by the Science Based Targets initiative (SBTi). Effective targets should cover all significant emission sources, integrate into overall business strategy, and include a clear roadmap with interim milestones.

Engage stakeholders across the organization to ensure broad support and consider offsetting residual emissions through credible and verifiable carbon credits. Regularly review and adjust targets based on progress and evolving scientific guidelines to stay on track with your net zero trajectory.

Achieving long-term sustainability

The concepts of carbon neutrality, net zero, and absolute zero are all critical to the fight against climate change, and they each play a different role in comprehensive emissions reduction strategies. Understanding these terms and the approaches behind them helps businesses, governments, and individuals take meaningful steps toward creating a sustainable future.