What Are Carbon Offsets? Everything You Need To Know About Carbon Offsetting

what are carbon offsets_ Everything you Need to Know About Carbon Offsetting
Nasir Khan

Nasir Khan

Businesses are well aware of the race to Net Zero and new ESG guidelines. But if you’re wondering about the new offset market and how to get the most out of it, we cover everything you need to know.

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Grab your notes and jot down 1.5 degrees celsius.

The Paris Agreement outlines the steps needed to stop the Earth’s temperature rising above 1.5 degrees. The mission is mainly dependent on reducing carbon emissions in order to stop climate change. Most recently, the responsibility has fallen on business owners who need to limit their carbon footprint and prevent pollution as much as possible.

To tackle the problem, businesses need to offset emissions from their operations and work towards a Net Zero infrastructure. 

Below you’ll find the complete guide to everything you need to know about carbon offsetting and how you can use offsets to reduce your environmental impact.

What Is Carbon Offsetting?

A carbon offset – or the act of carbon offsetting – is a method of balancing out Greenhouse Gas (GHG) emissions released into the atmosphere. Put simply, the emissions we put into the atmosphere are then also removed. The method used to achieve this process is what we call carbon offsetting. 

Offsets are measured in tonnes of carbon dioxide-equivalent (CO2e), with one carbon credit equating to one tonne offset.

Why Have Offset Schemes Become So Important?

Carbon Offsetting Schemes are now a crucial policy tool used to improve the sustainability of businesses. 

Businesses contribute to over 70% of the world’s emissions, so it is critical that business directors take responsibility for the emissions of their business.  Since we don’t have the option to cease business operations completely, we must find more sustainable ways of working. To compensate for the emissions business release, Offset Schemes can effectively reduce and remove harmful pollution from business operations.

How Does Carbon Offsetting Work?

what are carbon offsets and how does carbon offsetting work natural solutions to carbon offsets
photo credit: Unsplash

Carbon Offsetting typically takes shape in the form of nature-based solutions like forest conservation and ocean conservation, or technological solutions such as renewable energy, landfill gas capture, and hydropower.

Investments are purchased as ‘carbon credits’ and the broker must be certified to issue carbon credits to various businesses. When the number of carbon credits obtained by a company equals the company’s carbon footprint, then that company can be deemed carbon-neutral.

In order to become a carbon neutral firm, businesses must first calculate their carbon footprint. Thankfully, there are many standard tools and protocols that help companies to do this. One of the prominent and internationally recognised accounting standards is the GHG protocol which helps companies to calculate and manage their GHG emissions.

There are also many organisations offering carbon offsetting solutions, including OneTribe, that help businesses to reduce their carbon footprint via forest conservation.

Is Carbon Offsetting Effective?

Over the past few decades, Carbon Offsetting schemes have become increasingly popular. But they have also attracted many critics and environmentalists questioning how effective offsetting is.

When we talk about effectiveness, it’s not just limited to whether offsets are efficient in removing enough carbon or harmful  gases from the atmosphere. It’s about looking whether it is a viable long-term method capable of protecting the planet.

The answer to the above question is dependent on many factors. Offsetting activity isn’t a golden ticket to eliminate emissions and prevent global warming. But it is an interim method we can use to limit  our output as much as possible. 

It is impossible to completely eliminate emissions resulting from our activities due to the significant volumes we are producing but carbon offsets are a vital tool we must use to solve part of the issue. It remains a fact that offsetting does not mean we can comfortably produce more, but rather, use offsetting in an effort to use less.

At this point, offsets are necessary for us to reduce emissions, and they ARE effective in helping us to reduce the damage we are causing. In fact, nature-based offsets are the most effective way to offset large volumes of GHG emissions. So helping to support the conservation of forests  and oceans is one way to guarantee a low carbon footprint.

3 Types Of Carbon Offsetting Schemes

Now let’s look at different types of Offsetting Schemes that businesses can use to improve their carbon footprint.

1. Low To No Emission Technology Projects

what are carbon offsets_ using renewable energy as a form of carbon offseting
photo credit: Unsplash

Renewable energy projects like wind farms, hydropower plants, solar panels, and power generation through landfill gas capture (anaerobic digestion) can turn both natural resources and waste into power and doesn’t emit any greenhouse gases during production.

In sectors like agriculture, farmers can use anaerobic digestion technology to maximise their production and reduce crop wastage to save resources and reduce emissions. 

For airlines, flight paths can be optimised with the help of AI for efficient fuel usage.

In the Auto sector, Electric Vehicles (EVs) have taken charge of completely eliminating air pollution as there is no emissions associated with EVs whatsoever unlike the conventional fossil-fuel based vehicles.

2. Carbon Removal Via Manmade Technologies

To many people’s surprise, there are technologies developed namely Carbon Capture and Storage (CCS) and Direct Air Capture (DAC) which are capable of directly sucking harmful CO2 from the air and purifying it.

CCS involves capturing the carbon emissions from power plants and other industrial production sites before it’s released into the atmosphere, transporting it and then storing it under deep geological formations for centuries or millennia.

Carbon offsets Direct Air Capture method
photo credit: Climeworks

DAC passes through ambient air to a semipermeable membrane designed to soak up carbon particles. The CO2-free air is then released into the atmosphere. The captured carbon is transported and stored permanently into geological formations underground.

3. Nature-Based Solutions

tree conservation as an effective offset
photo credit: Unsplash

Nature has its own solutions to reducing emissions by actively sequestering carbon dioxide from the air and processing back into harmless oxygen. Forests, Soil and Oceans are some of the world’s biggest carbon sinks, and therefore investing in their protection is another way to balance out your emissions. 

Forests conservation projects work by planting and protecting trees to counter deforestation and keep the volume of carbon sequestered at a sustainable level. Planting just 1 tree will absorb 53.1 kilos of Carbon by 2030. But Protecting 20 mature trees has the ability to absorb 3900 kilos of Carbon in the same period of time.

How Carbon Offsets Can Help Businesses

how can carbon offsets help businesses industrial pollution caused by businesses
photo credit: Unsplash

Once businesses have actively reduced their organisation’s carbon footprint, offsetting is a way to take full responsibility for any residual emissions. Offsets are an economical investment that can help support fundamental sustainability projects across the world. For businesses that are looking to combat climate change and compensate for their organisation’s total impact, offsets are a viable solution to helping companies achieve their ESG goals.


Carbon Offsetting is an effective solution to help businesses reduce their CO2 emissions. All businesses must try to actively reduce emissions as much as possible using offsetting schemes to eliminate  any remaining emission targets. 

To learn more about how your business can start its offsetting journey, visit the One Tribe carbon platform to learn more about how we can help.

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