The CarbonNeutral Protocol Index

4.6 The use of carbon credits generated by projects which avoid, reduce and remove GHGs

The CarbonNeutral Protocol accepts the use of carbon credits from any type of mitigation project validated under the accepted carbon standards listed in Table 10 (noting specific restrictions as set out there). There are three general types of mitigation projects:

Avoidance: Includes projects which eliminate emissions – examples include renewable energy projects which avoid emissions from the fossil sources they replace; and, REDD+ projects which address emissions from deforestation.

Reduction: Includes projects which reduce emissions – examples include energy efficiency projects such as low-carbon cookstoves which use less fuel through improved combustion; and, manufacturing process improvements which reduce the use of non-renewable energy.

Removal: Includes projects which remove GHGs from the atmosphere – examples include afforestation; agricultural practices that sequester carbon in soils, bio-energy with carbon capture and storage, enhanced weathering, and direct air capture when combined with long-term storage.

The math of carbon neutrality treats interventions that avoid and reduce emissions as equal to those that remove GHGs from the atmosphere. Using the analogy of a bath with the taps on, a balance is achieved either by turning down the taps (avoid or reduce emissions) or by draining an equal amount down the plug (removing emissions from the atmosphere and capturing them in carbon sinks). However, as we get closer and closer to the safe limit of GHG concentrations in the atmosphere, there will be a shift in emphasis from emission reductions and avoidance to removals to ensure we have all mitigation approaches working in concert to achieve a stable climate.

In guidance published in 2019 and 2020, the Science-Based Targets Initiative (SBTi) signaled the rising importance of removal projects in the mix of mitigation approaches aligned with net zero, while also acknowledging the “critical role” of projects that avoid or reduce emissions. In October 2021, the SBTi released its Corporate Net-Zero Standard under which unabated emissions must be “counterbalanced through the permanent removal and storage of carbon from the atmosphere” (SBTi, 2021, SBTi Corporate Net-Zero Standard). In September 2020, Oxford University published The Oxford Principles for Net Zero Aligned Carbon Offsetting, which strengthened the case for a transition to offsetting based increasingly upon removals.

In the near-term, SBTi recommends supporting reduction and avoidance projects, a position they stressed in a September 2022 update, stating “investments in reducing and avoiding emissions are critical right now” in order to help the global economy align with 1.5°C and net-zero.

Given the recognized need for all credible mitigation approaches to address the increasing need for urgency and scale, and the rising importance of increasing capacity for removals, clients should consider a portfolio approach to selecting a mix of project types which over time has an increasing proportion of removals.