Carbon Credits

WHAT ARE CARBON CREDITS

To understand our core objectives, we first need to provide an overview into the world of carbon credits and the concept of what it means to be ‘net zero’. Conceptually, net zero is a global objective to cut the net greenhouse gas emissions into the atmosphere to zero. This doesn't mean that no emissions are generated but rather that we ensure all of these generated emissions are offset by one of three main methods:

Carbon sequestration (natural absorption), carbon capture (synthetic absorption) and carbon avoidance (prevention of emitting CO2).

We can see from this explanation that this allows for people/organisations to offset any emissions that they generate, by implementing or contributing to projects that help with carbon sequestration. To put it plainly, although it may not be possible for a factory to avoid producing emissions, they can instead plant enough trees to offset this amount. Whilst in a perfect world the emissions being output would be captured (or not exist at all), the reality is that carbon offsetting is a necessary starting point for many individuals and businesses to start taking responsibility and begin making an impact.

Carbon credits were created to solve this very problem of allowing people/organisations to hit their net zero targets in a more standardised and measurable way, such that there is now a standardised market for carbon credits, whereby 1 carbon credit is equal to 1 tonne of CO2 emissions. This system is unfortunately still very centralised, and its complexity is a barrier to entry for people and small organisations that wish to become net zero.

HOW ARE CARBON CREDITS CREATED

There are many possibilities for projects that can produce carbon credits, ranging from forestry and conservation to green energy and community projects. Once the project is ready, they can attempt to gain verification (likely from one of the industry leaders such as Verra (2) , who will apply their methodology and considerable process to calculate accurate estimations of the amount of carbon offset (and therefore credits) it will produce. Once this process is completed, the verification organisation will issue the credits, making them available for purchase, thus providing funding for the project to be implemented.

THE OPPORTUNITY

This process is currently complex and centralised, which we believe is currently a deterrent to SMEs and individuals from participating in the critical goal of becoming net zero. The global carbon credit market is currently worth around $200 Billion (3) . With more and more consumers demanding businesses move to net zero and governments implementing carbon taxes (4) - we believe the demand for carbon credits is only going to increase over time. As that demand arrives, we will be there with our Carbon Balance Service to remove friction and bridge the gap to ensure everyone can get involved in maintaining the sustainability of our home, Earth.