Our thinking

Zeroing in on offsets

21 January, 2021

We’ve said it before and we’ll say it again: we welcome the large number of net zero commitments coming out from businesses, with PepsiCo and Aegon most recently joining the list.  

While often accompanied by ambitious targets for emissions reductions, net zero commitments rely on carbon dioxide removal (CDR) to rebalance the remainder of emissions. This is a practice the IPCC considers will be a requirement if we are to limit warming to 1.5°C. However, offsetting, including CDR, has well documented problems including trade-offs with food security and biodiversity. Given the limited amount of guidance on the requirements for net zero, there are many shades of green when it comes to net zero commitments. 

A recent report from Greenpeace analyses the extent to which businesses rely on CDR as part of their net zero strategies. It raises important questions – when the commitments are taken as a whole –regarding how viable this reliance is and the impact of these trade-offs. For example, Eni and International Airlines Group each anticipate using forests to offset 30 MtCO2 per year by 2050: just these two companies could account for up to 12% of the available total land for organic CDR.  

It is a complex debate. For example, some industries, such as materials production are much harder to decarbonise and should perhaps have priority access to CDR options. There is a limited supply of CDR offsets, which will drive the price up. And technological solutions, such as direct air capture, remain hugely expensive. They also require a large amount of energy and don’t address removal or reduction of other greenhouse gases.  

However, one thing is clear. More than ever, there is a need for businesses to work together to drive down emissions. This means in their own operations and supply chains, as part of robust and future-proof climate strategies that effectively address the core of the climate crisis. 

By Patrick Bapty