What is Carbon Neutral?

According to the Intergovernmental Panel on Climate Change (IPCC), the term "carbon neutral" refers to a state where human-caused carbon dioxide emissions are balanced globally by carbon dioxide removals over a specified period. In other words, the same amount of carbon dioxide that you emit into the atmosphere is offset by an equal amount of carbon dioxide removal

The term is generally used to describe a specific state when the total GHG emissions arising from an entity, facility, product, or event are offset by accredited carbon credits, which may involve either carbon avoidance or removal.

It is common for companies to set a carbon neutrality target covering all their direct operations (usually including Scope 1 and 2 emissions) and some specific Scope 3 emissions for a specific facility, product, brand, or event. A robust verification standard for carbon neutrality can be found in PAS2060.

This should not be confused with the concept of “neutralization” in the taxonomy for net-zero strategy, which only permits carbon removal credits to be used to counterbalance the impact of residual emissions when a company lays claim to “net-zero”.