Carbon offsetting
Using reductions or removals outside an activity's boundary to compensate for its emissions.
Example
A purchaser may retire eligible credits to support a compensation claim.
The catch
Claim validity depends on quality, accounting and applicable rules.
In more depth
Carbon offsetting, explained.
Carbon offsetting works by subtraction on paper. A buyer measures its emissions, retires credits for an equal number of tonnes and claims the two cancel out. The GHG Protocol keeps that arithmetic outside the inventory, so a company's reported emissions stay gross and any credits appear separately. The atmosphere keeps its own books. The buyer's emissions happened, and the balance depends on the credits delivering what they promise.
Several things can break the equation. A reduction credit prevents emissions elsewhere without removing the buyer's, so at best the two together leave global emissions where they would have been. Forest carbon can burn. A credit from a methane project swaps a short-lived gas for a long-lived one at a fixed exchange rate, which changes when the warming occurs. And if the host country also counts the reduction towards its national target, two parties claim one tonne, a form of double counting.
Good practice puts offsetting last, after avoiding and cutting emissions, and EU law has narrowed what it can support. Directive (EU) 2024/825 rules out offsetting as the basis for telling consumers that a product has a neutral, reduced or positive emissions impact. Buyers can present the same purchases as a contribution claim, keeping the funding out of their own totals.