Decarbonisation - How is this achieved?

For a household to reduce or eliminate your carbon footprint, direct emission reduction is really the simplest avenue to decarbonisation. However, for a company, there are two main ways of reducing carbon output in their endeavour to the carbon neutral - emission reduction, or carbon offsetting through carbon credits.

Emission reduction:

Some examples of direct emission reduction include:

1. Achieving greater energy efficiency - even an email has a carbon footprint.
2. Switching to renewable energy.
3. Optimising transportation via low emissions vehicles and reducing transportation waste in long haul or inefficient usage.
4. Some manufacturing companies have the ability to reduce their carbon footprint via carbon capture and storage or reuse the carbon in their processing.

So what is carbon offsetting and carbon credits ?

Companies can purchase carbon offsets to compensate for their carbon emissions to become carbon neutral. Carbon credits are a type of financial instrument that allow organisations to offset their carbon emissions by investing in carbon reduction projects. The basic idea behind carbon credits is that companies that emit large amounts of carbon dioxide (CO2) into the atmosphere can purchase credits that represent a reduction in CO2 emissions from another organisation or project.

Here's how it works:

1. A carbon credit represents one tonne of CO2 equivalent (tCO2e) that has been avoided or removed from the atmosphere.
2. Projects that reduce emissions or remove CO2 from the atmosphere are certified by a third-party organisation. These projects could include renewable energy projects, forest conservation projects, or methane capture projects.
3. Once a project is certified, it can generate carbon credits, which can then be sold on the carbon market.
4. Companies that need to offset their emissions can purchase carbon credits on the market. The price of carbon credits is determined by supply and demand and can vary depending on the type of project and the location.
5. By purchasing carbon credits, companies are effectively funding projects that reduce emissions or remove CO2 from the atmosphere, which helps to mitigate the environmental impact of their own emissions.
6. Carbon credits are often used as a way for companies to meet regulatory requirements, such emissions reduction targets, or as part of their corporate social responsibility initiatives.

It's important to note that carbon credits are not a substitute for reducing emissions at the source. They are meant to be used in conjunction with other strategies, such as energy efficiency measures and renewable energy adoption, to help reduce greenhouse gas emissions and mitigate climate change.