Net Zero and Carbon Neutral are key concepts in climate science. However, these terms are often used interchangeably, leading to uncertainty and sometimes even confusion about their differences. To address this problem, this article will compare both concepts side by side.
At CFP Energy, from sourcing carbon credits to providing power purchase agreements (PPAs), we lead in all aspects of the energy transition.
To see how you can start instantly decarbonising your business to achieve Net Zero, or implement strategies to achieve Carbon Neutral, get in touch with our carbon team today.
Key differences between Carbon Neutral and Net Zero
Net Zero can be defined as the long-term goal to permanently remove greenhouse gases (GHG) at source so they are as close to zero as possible, with any remaining emissions removed from the atmosphere using verified carbon removal methods, such as reforestation projects.
Carbon Neutral, by contrast, refers to balancing CO₂ emissions by purchasing carbon offsets, typically on a project-by-project or annual basis, to ensure that the net amount of CO₂ released into the atmosphere equals the amount sequestered or avoided through offset projects.
Seeking to reduce or offset your carbon emissions? See our Voluntary Carbon page here.
What is Carbon Neutrality? Achieving Balance in a Carbonised World
Carbon Neutrality refers to the balancing of CO₂ emissions with offsets (or reductions) taken elsewhere. Although this approach doesn't equate to a long-term strategy, like Net Zero, many of the pathways used to achieve carbon neutrality are similar or identical to those used in Net Zero, where carbon reductions are typically made at source. These include:
- Soil Carbon Sequestration: this refers to agricultural practices that enhance the carbon storage properties of soil, including no-till farming, cover crops, and rotational grazing.
- Biochar: a stable form of carbon created by heating organic materials in low-oxygen conditions (pyrolysis), biochar can be used as organic fertiliser while permanently sequestering carbon in soil.
- Reforestation and Afforestation: backed by carbon credits, restoring forests (reforestation) or creating new forests (afforestation) promotes both carbon capture and storage.
- Direct Air Capture (DAC): comprised of technologies like solid and liquid sorbent systems, DAC extracts CO₂ directly from ambient air, ensuring that atmospheric carbon dioxide concentrations are actively reduced, regardless of the emission source.
- Community-Based Projects: supported by investment through carbon credits, local initiatives, such as cookstove projects, supplement coal and wood cookstoves with cleaner, more efficient methods that reduce CO₂ and other harmful emissions.
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Reaching for Net Zero: Striving for ‘Beyond Balance’
Achieving Net Zero emissions, as already outlined, is more than just 'balancing' emissions with reductions or offsets elsewhere. To achieve Net Zero, businesses must reduce emissions at source, whether through investment in renewables, including energy contracts like PPAs, as well as reducing emissions within the supply chain (i.e., decarbonising logistics) and transitioning to low-carbon materials in the construction of new facilities and creation of new products.
In practice, to pursue a Net Zero strategy, companies should first conduct a company-wide audit, focusing on Scope 1, 2, and 3 activities (as detailed in the next section below) and, from there, target key areas of the business to address emissions where they are most intensive.
Climate Positive - Aiming Beyond Zero for a Regenerative Future
Climate Positive, a distinct but related concept to those already discussed, is also important to define.
By contrast to Net Zero, Climate Positive refers to the practice of removing more emissions than those produced.
A Climate Positive rating may result from two types of activity. It may result from a deliberate strategy to achieve a Climate Positive result, or it may derive from a Net Zero strategy that ultimately exceeds its aims. In either case, whether investing in renewables or projects or adopting low carbon technologies, sustainable practice should be the ultimate goal.
A Tale of Two Goals: Net Zero vs. Carbon Neutral Explained
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Scope Matters - Defining the Boundaries of Net Zero and Carbon Neutrality
In climate terminology, "scope" carries a special meaning. Devised by the Greenhouse Gas Protocol, the term refers to 3 distinct categories of emissions.
Scope 1 emissions refer to direct emissions. These are emissions that are owned or controlled by a business, and which therefore can be directly traced back to their operations at the source. Emissions of this type might include:
- Plants or factories that create fugitive emissions via gases or vapors
- Heavy industries that produce emissions by furnaces, boilers, or incinerators
- Businesses that create emissions through complex transport networks
Scope 2 emissions, by contrast, refer to indirect emissions. In this category, emissions are typically generated by external facilities that supply energy to a business.
Emissions of this type might include those:
- Generated by electricity purchased to run data centres, manufacturing plants and retail outlets
Scope 3 emissions are another form of indirect emissions. Unlike Scope 2, Scope 3 covers emissions that are more peripheral, and potentially harder to control.
Emissions of this type could include those:
- Generated by employees commuting to and from the workplace
- Produced as a result of a business’s investments in other businesses
- Created by a company’s supplier in the process of transporting goods
- Resultant from franchises beyond an organisation’s direct agency
The Path to Net Zero: A Journey Beyond Offsetting
While this article has sought to distinguish Net Zero and Carbon Neutral, it is important to remember that the two strategies are not mutually exclusive. For any business, while the short-term goal should be to achieve Carbon Neutral, in the long term, optimising for Net Zero targets should also be prioritised: commitment to international pledges, not just industry-specific obligations, should direct your evolution as a business.
CFP's Commitment to Net Zero
As regulations around emissions tighten, at CFP Energy, we proactively work with businesses to achieve Net Zero. Empowering our clients to develop long-term strategies that meet their targets and promote sustainability, our service is fully comprehensive.
To see our innovative carbon reduction strategies in action, watch our Finca Amakella forest restoration video below. Or, to talk to our carbon team directly, contact us here.
