Carbon offsetting was a hive of activity early this century as a way of making a business’s activities greener. But is it still a practical solution in 2021?
The principle of carbon offsetting is a simple one – your business produces carbon, so fund schemes that reduce emissions by the same amount and bingo, your business no longer adds pollution to the environment.
It sounds simple, but controversies around the validity of schemes gnawed away at their reputations, and the rise of electrified vehicles has reduced fleet operators’ impact on the environment. So is carbon offsetting still relevant, and, if so, how should businesses go about it?
Founder of iOffset Mark Hammond admits that the boom in offsetting tapered off around 10 years ago, but says it has returned to prominence in the past two years. “It didn’t progress, that’s down to some lack of governance and auditing,” he says. “However, in the past two years, and certainly the past 12 months, interest seems to have picked up.”
He highlights the UK’s 2050 net-zero goal as an important element in focusing attention on the issue. And he predicts that the UN’s 2021 Climate Change Summit COP26 due to be held in Glasgow this November will only increase attention.
“Net zero is ubiquitous, and that is driving companies and corporates to develop sustainability strategies. Carbon offsetting is a core part of that,” he says.
The principle of it being only part of a solution is key to Hammond. He tells Company Car Today: “The concept is to promote carbon reduction, offset what you can’t reduce and share the message. Reduce, offset, share.”
Case Study: Greenkit
Greenkit hires energy-efficient lighting equipment and accessories to film makers, and as well as running hybrid vehicles and planning to run an electric light commercial vehicle, it has decided to offset its emissions as part of a journey to carbon-neutrality.
Using Webfleet’s Green Your Fleet initiative, the company receives an estimated annual CO2 emissions figure from its vehicles, which is then converted into tree planting by the Justdiggit organisation working in Africa, particularly regreening dry lands in Tanzania. Much of the 2bn hectares of degraded land across the globe is in Africa, where Justdiggit says economic constraints make restoration challenging, and the organisation uses traditional methods such as digging eroded land to restore fertility, re-green the site and improve productivity.
“When we saw the opportunity to contribute to this restoration we jumped at the chance” says Greenkit marketing director Sally McEnallay. “We believe that in the long-term it will be beneficial in tackling global climate change.”
The relevance of offsetting has in part been brought into question by the rapid rise in deployment of electric vehicles by fleets. But zero tailpipe emissions doesn’t mean zero environmental impact.
“Moving to electric vehicles is much more effective than offsetting your carbon,” says Taco van der Leji, European vice-president of Bridgestone-owned telematics giant Webfleet Solutions. “Nevertheless, an EV still consumes energy so you need to get your plan in place. Depending on the car, an EV is maybe 25% of a normal vehicle for CO2 emissions, so you need to do something.”
Then there’s the impact of those company vehicles that aren’t yet electric.
“If you can’t get into an electric vehicle yet, say for budgetary or infrastructure reasons, then offsetting is an answer,” adds iOffset’s Hammond.
According to Hammond, there are three verification bodies ensuring schemes are valid: the California-based VERRA, Gold Standard from Switzerland, in conjunction with the World Wildlife Fund, and the United Nations’ carbon-neutral registry.
But it’s not just in the registration of a scheme itself that a fleet has to beware.
“You need to select a partner that offers a transparent process, and crucially the carbon credits have to be retired in your name,” he advises. “When the credits are purchased they have to be retired or cancelled on the public registry, so they can never be traded again.”
Hammond says having a transparent audit trail and the ability to review projects and have a conversation on which ones suit the business is important. Different projects cost different amounts, and while some businesses will want to offset as cheaply as possible, others will be looking to support certain types of project.
“A renewable energy project is cheaper than forestry, and a project in a developing country is less expensive than a developed country,” continues Hammond.
“So on a matrix, renewable energy in the Far East is the cheapest option on the spectrum, and at the opposite end is tree planting in the UK.” In between that are projects across the world, with iOffset involved in the likes of peatland restoration and conservation in Indonesia, conservation and biodiversity projects in the Tambopata National Reserve in Peru, anti-deforestation work in Brazil, afforestation work in Uruguay and involvement in the Great Bear Forest Carbon Project in Canada.
“There are some people who say I want to offset X many tonnes as cheaply as I can, tell me when you’ve done it; that’s kind of a simple route,” says Hammond. “The opposite is where they want to understand where the projects are and what they do.”
Not everyone is a fan of carbon offsetting. Some question the validity of the schemes in terms of funding renewable energy projects that would have found support from elsewhere anyway, or capturing carbon via tree planting that is then released back into the atmosphere at a later date if the trees are burned.
A 2016 study for the European Commission found that three quarters of UN-sanctioned projects would likely have gone ahead without the carbon-offset funding, and only 2% had a high chance of being classified as “additional”. That’s mainly due to the type of clean energy projects being something Governments will need to encourage to hit their own environmental goals.
“To be a viable offset, the carbon must be locked away for thousands of years and tree planting or peatland restoration can’t guarantee this,” argues Friends of the Earth’s head of science, policy and research, Mike Childs. Friends of the Earth also expresses concerns that offsetting leaves businesses believing they don’t have to reduce the environmental impact of their operations.
“If a business or someone you know tells you they are going net zero, ask them just how far they are going in cutting their emissions,” says Childs. “If someone tries to sell you an offset project, ask them if they will guarantee the carbon will be locked up for thousands of years and that it has zero chance of being funded any other way.
“The reality is that we need to cut our emissions by as much as we can, as fast as we can,” he concludes. “We also need to invest in projects that will remove carbon emissions from the atmosphere. It’s not either/or, it’s both. We need to protect what nature we have left.”
COMPANY THEN CUSTOMER
Fleet Operations is one business that took the decision to commit to a carbon-offset programme internally, and has progressed to be able to offer it to customers.
“As a business, it includes some changes to the office (when we go back) to reduce the carbon footprint, particularly moving our clients to electronic invoicing, and making sure we have the best and most efficient printers and machinery,” Fleet Operations business development manager Mark Gallagher tells Company Car Today. “We have also moved to an energy partner who is engaged in a carbon-offset programme.”
Like Fleet Operations, Webfleet Solutions has been offsetting the carbon its own business creates. “We have been encouraging our customers to move to electronic invoicing,” explains van der Leji. “If they would still like a paper invoice then we ask them to pay for it and donate the money to offset the paper.”
Being seen to be green is in some ways as important as the action itself, and will grow in significance in the coming years.
“More companies are realising that if we don’t have great sustainability then it is a risk for the company,” says van der Leji. “We will all work step-by-step for a better society and this is part of that.”
He predicts that some companies could be forced to prove their green credentials to retain their place in the supply chain. “Most companies have clear guidelines on how they want to do things and they want to create a supply chain that isn’t compromised,” he continues. I think it’s important for all companies, because it’s important for your company and for society, and you are part of that. The next step is that you need to stimulate your partners to do the same, like we have done with asking to offset the carbon output of our production.”
Fleet Operations’ Gallagher concludes: “Carbon offsetting should be considered as part of the make-up for a robust environmental and sustainability policy. Carbon offsetting is an important pillar in the construction of a robust environment and sustainability policy.”