The difference between Carbon Neutral and Net Zero

It’s becoming more and more common for businesses of all sizes to announce that they have committed to becoming 'Carbon Neutral' and 'Net Zero'. Although the terms appear interchangeable, they involve quite different levels of commitment and resource to achieve. With some businesses being accused of 'greenwashing' when using the terms incorrectly, it’s important to get the messaging right in your marketing.

Below, we’ve laid out the fine-grained differences between the two terms. However, to help you understand the overarching distinction, think about it this way.

The overarching distinction is as follows:

-         A Carbon Neutral business has measured and offset its carbon footprint. It is an action taken now and does not necessarily entail reducing emissions.

-         A Net Zero business has committed to significantly reducing its emissions and offsetting the residual. It is a stronger, long-term commitment.

Read on to learn more about the fine-grained differences.

Carbon Neutrality focuses on carbon; Net Zero includes all greenhouse gases

While CO2 is the largest contributor towards climate change, other greenhouse gases (GHGs) have an effect too: for example, methane and nitrous oxide which are more potent in their warming potential that CO2 on a like-for-like basis, though less abundant.

Carbon Neutrality requires businesses to offset their carbon emissions only. Net Zero covers all GHGs by asking businesses to offset their CO2 equivalent footprint (CO2e), a measure that captures the warming potential of various GHGs.

However, most Carbon Neutral accreditation schemes (including Seedling’s) require businesses to offset all GHGs.

Carbon Neutrality can be achieved immediately; Net Zero takes time and effort

It’s possible to become Carbon Neutral as soon as you’ve completed a carbon footprint of your business. The next step is to invest in climate action projects that offset the amount of carbon emitted. You might also become Carbon Negative or Climate Positive – interchangeable terms – by offsetting more CO2 than you emit.

Net Zero, on the other hand, first requires businesses to reduce their emissions from a chosen base year (usually your first emission assessment) by at least 90% and by no later than 2050. This is designed to commit your business to an emission reduction pathway that aligns with the global goal of limiting global warming to 1.5^oC. It’s an ambitious target that will require your business to implement meaningful carbon reduction measures, as well as taking advantage of wider advances in technology and infrastructure, such as electric vehicles and greener energy, as they develop in the coming years.

Carbon Neutrality requires Scope 1 and 2 emissions only; Net Zero requires Scopes 1, 2 and 3

For Carbon Neutrality, it’s strictly necessary to offset only your Scope 1 and 2 emissions:

Scope 1 – emissions from sources your business directly owns or controls (e.g. gas combustion for an office’s central heating, or fuel combustion to power company vehicles).

Scope 2 – emissions from purchased energy (e.g. emissions generated to produce your office electricity).

Net Zero goes further, requiring businesses to measure, track and set reduction targets for 90% of their Scope 3 emissions:

Scope 3 – all other emissions from sources not directly owned or controlled (e.g. employees commuting to work or travelling for business purposes, or emissions from your suppliers).

However, many Carbon Neutral schemes (including Seedling’s) require businesses to offset some Scope 3 emissions. This is particularly important for service businesses where Scope 3 emissions typically constitute the majority of a carbon footprint.

Carbon Neutrality accepts all types of offset; Net Zero accepts removal offsets only

There are two broad types of offsetting project:

Reduction/prevention of GHGs - These projects implement changes that reduce or prevent an amount of carbon entering the atmosphere. For example, investing in a developing country’s wind power capacity means that the country will be less reliant on damaging fossil-fuel based energy. These projects usually focus on green energy in some form – either at the national grid level (e.g. solar, hydro, wind) or local/domestic level (e.g. replacing gas cook stoves with electric).

Removal of GHGs - These projects actively remove carbon from the atmosphere, storing it for the long-term. They may involve the creation of nature-based carbon sinks (e.g. planting forests) or technology-based capture (e.g. using chemicals to capture CO2 from point sources, such as power plants, or the atmosphere). They are more expensive than reduction/prevention credits on average (up to £200 per tonne of CO2).

While it’s possible to be Carbon Neutral using both types of offset, Net Zero requires residual emissions to be offset using removal credits. This reflects Net Zero’s higher level of commitment and ambition. Reduction/prevention offsets encourage sustainability and stop the problem from getting worse; but removal credits have the potential to reduce the concentration of GHGs in the atmosphere.

Summary: the best of both worlds

Carbon Neutral or Net Zero – which, ultimately, is best for your business? At Seedling, we believe that this is a false choice: both are critical and, in fact, highly complementary.

Carbon Neutrality has (rightly) been criticised as being “too easy” – committing to Net Zero indicates a serious, long-term and science-based commitment to making difficult choices to help fight climate change. But it’s also “too easy” for a business to commit to a Net Zero target 30 years in the future and do very little now – the planet needs immediate climate action!

Therefore, the optimal sustainability strategy marries the two. It combines material ongoing investment in climate action (Carbon Neutrality, year after year) with a genuine, long-term commitment to emission reduction (Net Zero).

Seedling is designed to make it easy for any business to adopt this strategy. Contact us at hello@seedling.earth to find out more.