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Carbon Neutral vs Net Zero

Carbon Neutral vs Net Zero: Differences you Need to Know

| Alex Dovey |

In order to make more environmentally responsible decisions as the world reacts to climate change, it’s important to understand the difference between carbon neutral and net zero. What do these terms mean, and what are the benefits of each?

What is the difference between carbon neutral and net zero?

Carbon Neutrality and Net Zero share the same objective as they are both ways of offsetting harmful emissions from the atmosphere. However, their difference lie within the type of emissions.

  • Carbon neutral is when an organisation’s carbon offsets are equal to or greater than the amount of carbon they emit.
  • Net zero refers to all greenhouse gases (GHG) instead of just carbon emissions. It is reached when an organisation’s GHG emissions are equal to or less than the amount of emissions they remove.

Let’s look at both in more detail.

What is Carbon Neutrality

Carbon neutrality is the state or quality of having net zero carbon emissions. In order to achieve carbon neutrality, an organization must first calculate its total carbon footprint for a given period of time. Once calculated, steps are taken to remove the equivalent amount of carbon emissions to the amount emitted. There are many ways an organisation can reduce carbon consumption and once they are satisfied with the amount they’ve reduced internally they can invest in carbon offsetting schemes.

Some organisations such as heavy industrial/manufacturing companies would not be able to achieve carbon neutrality if it was not for the carbon offsetting scheme. These businesses simply emit too much carbon and cannot reduce their consumption both feasibility or financially to still operate competitively in their market. The Paris Agreement allows for carbon offsetting which permitted organisations to invest in schemes such as carbon sinks or purchase carbon credits.

Carbon sinks are natural or man-made environments that absorb and store more carbon dioxide than they emits from the atmosphere. Forests are the most common type of carbon sink, but there are other schemes that involve soils and oceans. An organisation would invest in the creation or funding or preserving of these natural environments such as tree planting, reforestation and preservation so they can continue to absorb carbon.

Carbon credits are investments in projects that reduce carbon emissions and the use of fossil fuels, eg, development toward renewable energy projects (wind farms, solar farms etc) or other climate positive means. These investments can be purchased and are measurable, certified and tradable. Once you purchase carbon credits you are permitted to emit the same amount of carbon dioxide or equivalent greenhouse gas as your carbon credit removes. There are critics of the carbon credit policy as high carbon consumers can purchase multiple carbon credits but continue to still burn considerable amounts of fossil fuels and generate high carbon emissions.

What is Net Zero?

Net zero is similar to carbon neutrality, but with a greater emphasis on reducing all greenhouse gases which includes methane (CH4), nitrous oxide (N2O) and all industrial gases such as hydroflourocarbons (HFCs), Perflourocarbons (PFCs,), Sulfur Hexafluoride (SF6) and Nitrogen Triflouride (NF3), these are common in refrigerants and other chemical industrial outputs. As well as all these gas types, to calculate Net zero emissions it most include all scope 3 emissions which is also inclusive of scope 1 and scope 2 emissions.

Scope 1

Scope 2

Scope 3

Fuel combustion
Company vehicles
Fugitive emissions

Purchased electricity, heat and steam

Purchased goods and services

Business travel

Employee commuting
Waste disposal
Use of sold products

Transportation and distribution (up- and downstream)


Leased assets and franchises

To achieve net zero, an organization must first calculate its total greenhouse gas emissions for a given period of time. Once calculated steps can be implemented to reduce emissions by an amount equal to or greater than their total emissions. This can be done through measures like energy efficiency, switching to renewable energy sources, and offsetting carbon emissions.

What are the benefits of Carbon Neutrality?

There are many benefits to achieving carbon neutrality, including reducing your company’s environmental impact and helping to fight climate change. In addition, carbon neutrality can also help improve your company’s reputation and brand image.

What are the benefits of Net Zero?

Like carbon neutrality, the same benefits apply to achieving net zero of reducing your organisation’s environmental impact and showing that your involved in schemes to limit global warming. Net zero is also seen as a more ambitious goal than carbon neutrality as it is inclusive of more harmful emissions than just carbon reduction. Net zero targets include the science based targets of reducing emissions for scope 1, scope 2 and scope 3 but also allow the use of carbon offsets to achieve the reductions. Science based targets alone do not recognise the use of carbon offsetting.

How can we help?

Making the switch to carbon neutrality or net zero can be a big undertaking, but it’s important to remember that every little bit helps. If you’re not sure where to start, Professional Energy Services can help you get started. We offer carbon management services and sustainability consultancy. We also have energy compliance services that reports on both your carbon footprint and greenhouse gas emissions with both SECR and ESOS.