Carbon offsetting is a crucial tool in the journey to net zero, but the terminology around it can sometimes feel overwhelming. To help you navigate some of the key concepts, we’ve put together a glossary of common terms. Whether you’re new to the topic or looking for a refresher, this guide will help you better understand how it works and its role in climate action.
Additionality
A key principle in carbon offsetting that ensures a project’s emissions reductions or removals would not have happened without the financial support provided by carbon credit purchases.
Beyond value chain mitigation (BVCM)
Actions that companies take to reduce emissions outside their own value chain, often through carbon offsetting. BVCM is an essential part of achieving net zero, as it allows businesses to support global decarbonisation efforts beyond their immediate operations and supply chain.
Carbon credit
A tradable certificate that represents the reduction or removal of one metric tonne of carbon dioxide (or equivalent greenhouse gases) from the atmosphere. These credits are generated by verified projects and can be purchased to offset emissions.
Carbon neutrality
A similar concept to net zero but often used to describe a more immediate, short-term balance of emissions and carbon offsetting. Many companies aim for carbon neutrality while working towards longer-term net zero goals.
Carbon offsetting
A mechanism that allows businesses and individuals to neutralise their greenhouse gas (GHG) emissions by funding projects that reduce or remove emissions elsewhere. Carbon offsetting should always be used alongside direct emissions reductions. Atmoz can help you find the perfect project to finance.
Carbon removal
The process of physically taking carbon dioxide out of the atmosphere through natural or technological means, including direct air capture, soil carbon sequestration, and biochar.
Climate financing
The funding of projects and initiatives that aim to mitigate climate change, including carbon offset programs. High-quality carbon credits are a form of climate financing, directing money to projects that would otherwise lack funding.
Co-benefits
The additional positive outcomes of a carbon offsetting project beyond emission reductions, such as biodiversity conservation, job creation, or improved local air quality.
Compliance carbon market
A government-regulated market where businesses are required to purchase carbon credits to meet legal emissions limits. Examples include the EU Emissions Trading System (EU ETS) and California’s Cap-and-Trade Program.
Gold Standard
Gold Standard is an internationally recognised certification for climate financing projects ensuring that they deliver measurable environmental and social benefits in addition to carbon reduction. Read our article about Gold Standard and why it matters.
High-integrity offsets
Carbon credits that meet strict environmental and ethical standards, ensuring real, additional, and permanent emissions reductions. Verified programs such as Gold Standard and VCS help maintain high integrity.
Leakage
When emissions reduced in one location lead to an unintended increase in emissions elsewhere. For example, protecting a forest from deforestation might push logging activities to a different area.
Nature-based Solutions (NbS)
Nature-based Solutions are projects that harness the power of ecosystems to benefit people, nature and climate. They leverage natural processes to capture and store carbon, such as reforestation, afforestation, and wetland restoration.
Net zero
A state where a company, country, or individual balances its greenhouse gas emissions with an equal amount of removal or carbon offsetting. Achieving net zero requires a combination of emission reductions and high-quality offsets.
Permanence
Refers to how long carbon is kept out of the atmosphere. Some projects, like reforestation, store carbon for decades or centuries, while others, like direct air capture with underground storage, aim for near-permanent removal.
Scope 1, 2, and 3 emissions
Categories of emissions defined by the Greenhouse Gas Protocol:
- Scope 1: Direct emissions from owned or controlled sources (e.g., company vehicles, factory emissions).
- Scope 2: Indirect emissions from purchased electricity, heat, or steam.
- Scope 3: All other indirect emissions in a company’s value chain, including supplier emissions and customer use of products.
Verified Carbon Standard (VCS)
A leading certification programme, managed by Verra, ensures that carbon offsetting projects meet rigorous quality and integrity standards.
Voluntary carbon market (VCM)
A marketplace where businesses and individuals can buy carbon credits to finance climate action voluntarily, rather than as part of a regulatory requirement.
Understanding these terms is essential for making informed decisions about carbon offsetting and climate action. Atmoz helps businesses navigate the complexities of emissions management, ensuring they take meaningful and effective steps toward sustainability.
Want to learn more about carbon offsetting and emissions reductions? Get in touch with our team to explore how Atmoz can support your climate strategy.
