Offsetting is a mechanism to direct finance to emission reduction or removal projects that otherwise would not be financially viable, in exchange for the right to claim the climate benefits delivered by these projects.. This is achieved by purchasing carbon offsets in the Voluntary Carbon Market. But how do you decide which high quality offsets to support?
Offsetting Projects — Avoidance or Removal?
The first step in understanding an offsetting project is establishing whether it removes — otherwise known as sequestering, or capturing — carbon from the atmosphere, or if it avoids — or prevents — additional carbon from being emitted. Rainforest protection is an example of an avoidance project, while biochar production is a carbon removal project. Some projects, such as improved forest management often include elements of both.
Avoidance and removal offsets are both essential if we are to hit our global net zero targets. Relying just on removal doesn’t prevent new emissions from being released. Ultimately, a diversified offsetting portfolio should include both project types on the path to net-zero, gradually increasing the proportion of carbon removals as the net zero target year approaches, as outlined in the ‘high ambition path to net zero’.
Project Types: Nature Based Solutions Vs Engineered Removals
When choosing offsetting projects to invest in, there’s a second key offset differentiator to be aware of, and that’s whether a removal offset is nature-based, or generated via engineered solutions. As you might expect, nature-based solutions (NBS) refer to projects that address the carbon problem via natural ecosystems such as forestry, oceans, and even the ground we walk on.
Examples of NBS offsets include:
Soil sequestration — the amount of CO2 that can be captured in soil is increased thanks to improved land management.
Reforestation — carbon is captured by re-planting woodland on recently deforested land.
Afforestation — also refers to tree planting, but on land previously not forested.
Improved Forest Management (IFM) — increasing the amount of carbon sequestered in forested areas by improving how the forest is managed, for example by rotating the time between tree harvest.
Ocean restoration — growing and repairing ocean habitats such as sea grasses, algae, mangroves and salt marshes to capture “blue carbon.”
Running Tide — a pioneering ocean carbon removal project.
Engineered removals, in contrast to NBS offsets, rely on technology and infrastructure to actively and (more) permanently sequester carbon. These projects vary in technological maturity, and in many instances, are underfunded or limited in scope because of implications such as cost. However, engineered removal offsets are in many ways far-more effective than NBS removal offsets because of their permanence; biochar for example can sequester CO2 for hundreds or thousands of years compared to an estimated half-century for forestry projects (as trees will eventually die and release their sequestered carbon back into the atmosphere).
Examples of Engineered removals include:
Biochar — organic material carbonised under high temperatures that greatly improves the amount of carbon that can be locked in the ground, while improving fertilisation and water-holding capacity.
BECCS — otherwise known as Bioenergy with Carbon Capture and Storage — refers to the highly-efficient burning of biomass to power electricity-generating turbines and then capturing the released CO2.
Ocean fertilisation — adds nutrients to the top layer of the ocean to encourage plankton growth and subsequent increased photosynthesis.
Enhanced weathering — speed up natural mineral weathering processes to capture carbon in calcium-based sediments that eventually turn to solid rock.
DACCS — otherwise known as Direct Air Carbon Capture and Storage — refers to the industrial process of using electricity to remove CO2 directly from the air through fans, chemicals and filters.
Concrete Mineralisation — inject captured CO2 into concrete mix during production, thus converting CO2 into a calcium carbonate mineral that is stored within the concrete.
Investment in engineered removals is critical if we’re to mitigate greenhouse gas emissions. 101 out of the 116 IPCC emissions scenarios depend on the use of carbon removal including the technologies outlined above.
Carbon Offset Pricing
The cost of offsets varies considerably on a project-by-project basis. While the environmental output broadly remains the same — 1 tonne of carbon dioxide avoided or removed from the atmosphere per offset — the means by which this is achieved are different.
The price of an offset is impacted by a number of factors, including but not limited to: the project type, the registry in which the project is issued, the vintage year, additional certifications of the offset, permanence, project location, and co-benefits delivered.
As mentioned above, engineered removals are generally more expensive than NBS approaches, partly because the underlying costs of the projects are higher, but also because they have a higher “permanence” associated with them — in other words, they may cost more, but can guarantee keeping CO2 out of the atmosphere for longer.
Offset pricing may vary from project to project based on co-benefits delivered beyond the climate benefit. Examples of these include biodiversity protection and increased employment in local communities. Projects that deliver these additional benefits command a higher price compared to similar projects without any additional benefits.
CarbonCure concrete mineralisation — an example of an engineered removal.
Onto the burning question — which offset to choose?
If the world is to contend with the rising threat of climate change, the ongoing development of offsets is critical to long-term success. Building a diverse offset portfolio offers many benefits over focusing on one particular offset model.
Ultimately, there’s no single ‘best’ offset type. Selecting a range of projects is important to ensure your offsetting investment is making the most impact short-term, but also ensuring that climate targets are met in the long-term..