2.5 Carbon Offset: Compensating for residual emissions

This article sets out the requirements for offsetting the carbon emissions of the organisation.

In order to have net zero emissions over a given reporting period, an organisation needs to offset the emissions they have not managed to reduce through their reduction initiatives alone. The way these emissions are offset is through the retirement of an equivalent number of eligible carbon offset units (see below).

This purchase and retirement of eligible units can be done using the Pathzero platform or can be done independently as long a certificate of retirement can be provided as evidence of the purchase of retirement of the carbon offset units.

Approaches allowed under this protocol

The following two approaches can be followed to purchase and retire carbon offset units:

  1. Monthly Offsetting: this involves estimating the average monthly emissions for the current reporting period and retiring that number of eligible offset units every month of the year. This must be followed up by a true-up process to ensure that the number of retired offsets is a least equal to actual measured emissions for the 12 month reporting period.
  2. Offsetting in arrears: this involves retiring offset units for the reporting period after the end of the period.

Recommendation: Pathzero recommends the adoption of the first approach as it will publicly demonstrate a more credible carbon neutral status.

A Strategy for purchasing and retiring

The organisation should develop and maintain a strategy for purchasing and retiring eligible offset units. This includes decisions regarding the amount of renewable energy purchased as well as the technology used for emissions reduction or avoidance.

The strategy should clearly lay out a multi year plan for how the emissions arising from the activities of the company will be appropriately compensated for over time.

Eligible offset units

 As discussed in Core Principles, Carbon offsets must meet the integrity principles, per the International Carbon Reduction & Offset Alliance (ICROA) Code of Best Practice.

Pathzero has reviewed the credibility of the offsets available and currently only accepts the following as eligible under this protocol.

  • Verified Emissions Reductions (VERs) issued by the Gold Standard
  • Verified Carbon Units (VCUs) issued by the Verified Carbon Standard
  • Australian Carbon Credit Units (ACCUs) issued by the Clean Energy Regulator in Australia.

Pathzero deems Certified Emissions Reductions (CERs) issued as per the rules of the Kyoto Protocol from the Clean Development Mechanism as ineligible for the requirements of this protocol.

Proof of retirement/cancellation of offsets

To effectively attribute the carbon abatement activities to a particular organisation, an organisation must purchase and then retire (also referred to as cancel) the carbon offset unit on a recognised offsets registry. 

The cancellation should be clearly attributed to the carbon neutral claim and the organisation or responsible entity making the claim. The cancellation and attribution of eligible offset units is important to prevent resale or double counting of offset units.

Any carbon offset units purchased on the Pathzero platform automatically provide 3rd part evidence of the retirement of the carbon offset units.

Disclosure of purchased offsets

The carbon offset projects underlying the carbon units retired for a given period must be transparently disclosed to the public.

Pathzero's Company Profile displays the required information about the Carbon Offset project being supported in order to offset the emissions arising from the business activities of the organisation.