What About Carbon Offsetting?

Hero Bennett

Sustainability Leader

Max Fordham LLP

Where a building cannot generate all its own energy and draws energy from the gas or electrical grids, then some form of carbon offsetting would be required to allow the building to be verified as net zero carbon. Likewise achieving a net zero carbon construction would currently require carbon offsetting to negate the embodied carbon emissions (associated with constructing the building) for a project to be verified as net zero carbon in construction.

Carbon offsetting isn’t a long-term solution to providing net zero carbon buildings. In their Net Zero UK report the Commission on Climate Change (CCC) set out a recommended strategy for the UK to become net zero carbon by 2050. In this report they state: “Most sectors (including buildings and power stations) will need to reduce emissions close to zero without offsetting; the target cannot be met by simply adding mass removal of CO2 onto existing plans”. They do include a small amount of offsetting in their strategy for the whole UK and point out that this needs to be reserved for the hard-to-treat sectors of aviation, shipping and agriculture; not buildings.

Relying on offsetting does not reduce the amount of fossil fuels being burnt which is the primary focus needed to address climate change. The quantity of available carbon offsets is nowhere near enough to offset our current emissions of greenhouse gases. Taking the UK as an example, our annual greenhouse gas emissions are around 450MtCO2e/yr. If one attempted to achieve net zero for the UK by tree planting alone, it would require a land area three times larger than the UK!

If Carbon Offsetting Is Not the Answer, Then What Role Does It Play and What Are the Alternatives?

A new building should aim to reduce its energy consumption as far as possible and install heating equipment which does not burn hydrocarbon fuels (gas, oil, biomass etc). The lower its energy consumption the more likely it is that enough energy could be generated onsite from renewable energy to meet its needs. This should also be the aim for retrofit work to existing buildings.

Where a building cannot generate all its own energy and draws energy from the gas or electrical grids, then some form of carbon offsetting would be required to allow the building to be verified as net zero carbon. Likewise achieving a net zero carbon construction would currently require carbon offsetting to negate the embodied carbon emissions (associated with constructing the building) for a project to be verified as net zero carbon in construction.

Types of Carbon Offset

Many offsetting schemes do not remove CO2 that has already been released, they only prevent further CO2 being added into the atmosphere or support changes which contribute towards a zero-carbon future. Schemes that theoretically do remove CO2 from the atmosphere include forest planting or forest protection. Carbon Offsets need to:

  • Be verifiable - with a robust audit trail
  • Be demonstrably additional – carbon savings additional to those which would have happened anyway
  • Avoid ‘leakage’ - emissions aren’t just moved elsewhere
  • Avoid Double counting – reductions are only claimed once
  • Be Permanent - Savings should be sustained over time, e.g. forest planting is a long-term strategy and needs to be preserved.

For UKGBC net zero carbon verification offsets must be accredited by UN recognised schemes such as those provided by Verra’s Verified Carbon Standard (VCS) scheme or by the Gold Standard organisation. These organisations have a range of procedural requirements geared towards increasing the likelihood that their carbon offsets actually reduce or absorb global carbon emissions whilst minimising the risk of adverse consequences, such as ecosystem damage.

Offsite Renewable Energy Generation

For organisations with large buildings or estates a robust approach to carbon offsetting would be to buy remote (off-site) renewable energy from a renewable energy developer via a power purchase agreement (PPA). This approach guarantees “additionality” of the renewable energy and the carbon benefit of the energy will be assigned to the owner of the PPA and their building.

The Price of Carbon Offsetting

The market price for carbon offsets is currently very low. It is possible to purchase accredited carbon offsetting from a variety of providers for as little as £2/tCO2e. This price does not reflect the cost of the impact that carbon emissions are having or the cost of reaching net zero globally. The Centre for Climate Change Economics and Policy and the CCC think that the price of greenhouse gas emissions needed to incentivise improvements in the UK Building Stock is in the region of £30-£450/tCO2e. The Greater London Authority (GLA) has set a price of £95/tCO2e. Setting a more realistic price for carbon offsets bought would provide an incentive for building owners to continue to reduce their emissions. Pioneering building owners looking to offset their carbon emissions could choose to set their own higher value for their emissions and buy extra carbon offsets to meet this amount.

Choosing the Right Offset for Your Values and Brand

How do you choose the right offset which you can trust? BrewDog PLC are a good example of a business who have enhanced their brand through their offsetting and their aim of being carbon negative. They have chosen to invest in reforesting part of their Scottish homeland reinforcing their heritage. Keeping their offsetting local means that it will benefit from their close oversight. The best choice of carbon offsetting for your business is likely to align with your values and purpose. If you can find a strategy that also supports these or ties into your business strategy you will trust and value it more strongly.

A Last Resort

There is no substitute for reducing your own emissions in a way that you can verify and carbon offsetting should always be the last resort. A net zero future needs more renewable energy generators, it needs more forest to act as a carbon sink and it also needs to protect and rejuvenate biodiversity. It therefore seems reasonable to us (whilst acknowledging their inherent risks of failure) to make use of carbon offset schemes in conjunction with a plan to improve one’s own buildings. For buildings, carbon offsetting is a short-term fix not a long-term solution.