Carbon offsets projects are climate projects that can decrease future greenhouse gas emissions (GHG) or remove existing emissions, allowing organisations to offset their own emissions.

Examples include the planting of trees or the installation of a solar farm. However, as the name suggests, they are meant to neutralise the carbon emissions generated somewhere else.

Many companies today, in light of the devastating effects of the climate crisis are turning to carbon offsets as one strategy to address their carbon footprint. Doing so can allow them to go carbon neutral. But what are carbon offsets?

A company or organisation, for instance, that is looking to make their operations carbon neutral can use carbon offsets to do so. They can purchase a carbon offset credit, which is simply a credit certified by either a government institution (like the United Nations Framework Convention on Climate Change) or non-governmental certification organisations (such as The Gold Standard).

To be certified as a legitimate carbon offset credit, a reduction of one metric tonne of greenhouse gas emissions needs to be created by the offset project, per credit.

You will find that there are many different carbon offset projects and programmes to choose from.

Renewable Energy Projects

Biomass and Biogas

Human beings have long used solid biomass, (wood, animal feces, etc) as a source of energy. Usually, in the past, it has been used in smaller-scale agricultural contexts. Now, however, there are dozens of carbon offset projects looking to replace fossil fuel usage with the burning of biomass and biogas. These projects rely on locally sourced biomass to produce clean, renewable energy to reduce GHG emissions, especially in local industries. You will find that biomass carbon offset projects are usually located within developing countries, especially in Africa, where their use is generally widespread. Many biomass offset projects aim to reduce GHG emissions by reducing the use of fossil fuels while also providing another avenue for sustainable waste management.

Nevertheless, the biomass industry is struggling with scale in some places, notably the United States. Yet, other countries, such as China, are rapidly expanding their biomass industries. Biomass is challenging to scale because it takes a significant amount of fuel to produce enough electricity to offset fossil fuel usage. It can also be an expensive source of energy that requires large amounts of space. Its use can also lead to detrimental environmental effects considering some biomass fuels still emit greenhouse gases. Yet, there are many active technological and sustainable land-use efforts underway aimed at minimizing/solving these issues within the biomass industry.

Carbon credits with biomass offsets such as these are available for as low as $3-$10/ton.

Solar

One of the most common carbon offset projects is generating renewable energy through the building of solar farms. These solar farms are constructed to replace fossil fuel usage, which is how their carbon credits can represent a reduction in GHG emissions. Solar energy has made great strides in recent years in terms of scalability and cost. Technological improvements to solar storage capacity are underway, and solar is more affordable than ever. Meaning solar power is both a scalable and cost-effective carbon offset option. Solar carbon offsets are also some of the most popular and numerous offsetting projects there are.

Nevertheless, it does come with its fair share of problems. In particular, solar generates a lot of waste (see our nuclear energy article), considering solar panel recycling projects are still in their infancy. Its inherent dependency on sunlight has led to criticism of its reliability. They can require significant amounts of space to generate enough electricity to replace energy from fossil fuels. However, with the many rapid advances in solar technology, there is no reason to think that the issues with solar panel offset projects cannot be solved.

Carbon credits from solar power carbon offset projects are available for as low as $10-$12+/ton.

Wind

Large turbines can generate electricity through the movement of the turbine blades using the power of the wind. Wind turbines are very efficient uses of space that can provide clean energy for very low operating costs. The wind is one of the most cost-effective sources of electricity out there. However, like solar, it is also dependent upon weather conditions. Many people are also concerned about the noise and visual pollution of wind turbines. Not only that, but they affect some animal species if not constructed sustainably. Constructing commercial-sized wind turbines costs several million dollars each. There are many wind-based carbon offset projects available to support. Many of which are located in developing countries.

Many wind-based carbon offset credits are available for around $5-$10/ton.

Hydropower

Hydro projects generate electricity using the flow of water, usually from rivers or reservoirs. Typically, you will find most hydropower carbon offset projects being located within developing countries throughout the world, especially those with significant sources of water to use for generators.

There are many pros and cons to hydropower carbon offset projects. First and foremost, hydropower plants often complement other renewable sources of energy very well. Working in tandem, hydropower and other energy sources like wind or solar can meet the electricity demands of our communities. Hydropower, considering the water flow out of a reservoir can be consistent over time, is much more reliable than solar or wind, which are weather-dependent. Nevertheless, hydropower plants are generally very expensive to construct, even being the most expensive generating technology in the US. Hydropower-based carbon offsets, as a result, can be more expensive than other renewable carbon credits. Hydropower plants can also be challenging to scale, considering they need sufficient water reservoirs to operate. Their construction could affect the local ecology of lakes and rivers if not developed correctly.

Hydropower projects can vary in size, and thus their price can vary, as well. You will find them sold for $3-$18/ton, with some as high as $100/ton.

Forestry and Reforestation

Trees and forests play a vital role in maintaining and managing the climate and biosphere. They improve air quality, conserve water, preserve the soil, and support an abundance of wildlife. Trees, through photosynthesis, sequester carbon out of the atmosphere and replace it with oxygen. As a result, many carbon offset programs are centered around forestry and reforestation, whether it be planting more trees or managing forests.

There are a variety of forestry-related carbon offset projects that do some of the following:

  • Prevent Deforestation

  • Improve Forest Management

  • Afforestation

  • Soil Management

However, of all the other carbon offsetting projects, these can be some of the most costly when done well. This reforestation project in Nicaragua, for example, sells carbon credits for $34/ton, which is significantly more expensive than carbon credits for solar, wind, or biomass. And while afforestation is a viable way to sequester carbon out of the atmosphere, it is unlikely that these projects alone will be capable of sequestering all that is necessary to achieve net-negative emissions globally.

But forests are still vital parts of the ecosystem, and they play countless ecological roles for both humans and many species. A notable example of carbon offset focused upon this is the Yarra Yarra Biodiversity Project, a reforestation project in Australia that strives to recreate a healthy, functioning forest in an area that has long suffered habitat loss and degradation while giving many animal species new regions to live and prosper.

Carbon credits for forestry and reforestation offset projects can range from $5 and up per tonne.

Methane Capture

Of all the greenhouse gases that exist, methane has one of the greatest warming potentials of all. Over a 100 year period, it contributes roughly 30x more warming than CO2 emissions (see our article explaining all greenhouse gases). There are many sources of methane emissions, but the most notable is waste management systems. Landfills, natural gas systems, and agriculture are some of the biggest culprits. As such, some carbon offset projects focus on reducing and capturing these methane emissions. The kinds of methane projects vary, with some burning methane gas, which converts it into CO2 (still a warming GHG, but one that leads to less warming, overall).

However, these carbon offset projects are not immune from their share of problems. It is possible for these methane projects to disincentivize local governments or companies to regulate their waste systems or agricultural waste. The thinking goes that if enough profit is made selling methane-based carbon credits, a negative incentive could form that could hurt support for mandatory capturing and destroying of methane emissions. Not only that, methane carbon offsets are especially inefficient in reducing the emissions they strive for. Most waste management projects can only reduce a fraction of their projected emissions.

But, as we mentioned, methane is a particularly dangerous greenhouse gas. As such, it is safe to say that any reduction in methane emissions (even if only a fraction of projected) would still constitute a vitally necessary climate initiative.

Methane carbon offset credits are priced anywhere from $2-$40/ton, depending on the scale of the project.

Energy Efficiency

There are several kinds of energy-efficiency carbon offset projects that are available. Typically, they are focused on community based energy efficiency initiatives, especially in developing countries. The idea behind these kinds of carbon offsets is this: energy-efficient products or systems, by definition, will require less energy to operate and thus will require less fossil fuel usage to produce that energy. What is commonly seen in the Voluntary Offset market is expanding the use of energy-efficient stoves and heating systems in the developing world.

Energy-efficiency carbon offset projects may vary significantly from one another, some big and some small. Most, however, are designed for implementation on industrial scales. But, while these projects may be cost-effective in the long run, they can be very labor-intensive to execute. Smaller-scale community-based projects can be tremendously beneficial for local populations. Many, especially those focused on cookstoves, provide many benefits in addition to reduced emissions, such as improvements to public health.

Some of these energy-efficient carbon offset credits can range between $15-$25/ton.

Carbon Capture & Storage

There are many carbon capture & storage offset projects. As the name suggests, these are projects designed to capture carbon emissions. Either from emitting sources themselves or the atmosphere. Then, the carbon is stored underground. However, to be a certifiable offset program, at least the kind you want to put your money in, the stored CO2 cannot later be sold, considering it would only result in it being emitted once more, as is the case for all certified offset programmes.

While carbon-capturing will be necessary to reduce carbon emissions, CCS projects and technology are currently in their infancy. Many large-scale projects are not possible or viable. This does not mean that CCS projects do not exist, however. Stripe, for instance, allows its customers to direct some revenue to CCS projects such as SeaChange or Mission Zero.

As we mentioned, many reforestation projects can sequester carbon out of the atmosphere. While technically not CCS projects, you can still purchase carbon credits with these offset projects if you are interested in the sequestering of CO2.

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