Carbon Offsets and Carbon Removal

How carbon offsets are supposed to work, why many have been criticised, and the role of technologies and nature in removing carbon from the air.

A carbon offset is a credit representing one tonne of carbon dioxide reduced or removed somewhere else. Companies and individuals buy offsets to compensate for their own emissions.

How offsets are meant to work

A company that cannot yet eliminate its emissions pays for a project elsewhere, such as protecting a forest, planting trees or supplying clean cookstoves, that reduces or removes an equivalent amount of carbon dioxide.

The quality problem

Offsets have faced serious criticism:

Additionality: would the emission cut have happened anyway? If a forest was never at risk of being cut down, paying to “protect” it achieves nothing.
Permanence: carbon stored in forests can be released if they burn or are cut later.
Leakage: protecting one forest may shift logging elsewhere.
Over-crediting: investigations, including a 2023 analysis by journalists and researchers of rainforest offsets certified by a major standard-setter, found that many credits did not represent real reductions.

These problems led to calls for stricter standards. The Integrity Council for the Voluntary Carbon Market launched core principles in 2023 to improve quality.

Carbon removal

Carbon removal means actually taking carbon dioxide out of the atmosphere. Methods include:

Nature-based: planting forests, restoring wetlands and improving soil carbon.
Direct air capture: machines that pull carbon dioxide from the air and store it underground. It is currently very expensive, often hundreds of dollars per tonne.
Bioenergy with carbon capture: growing plants, burning them for energy and capturing the carbon.
Enhanced weathering: spreading crushed rocks that absorb carbon dioxide.

Most climate pathways that reach net zero include some carbon removal to balance hard-to-eliminate emissions.

International carbon markets

The Paris Agreement’s Article 6 allows countries to trade emission reductions. Rules were agreed at COP29 in 2024. India launched its own Carbon Credit Trading Scheme under a 2023 framework, aiming to create a domestic carbon market.

The forest that was never threatened

A project sells offsets for protecting a forest, claiming it would otherwise have been cleared. Later analysis shows the forest was in a remote area with little risk of logging. Buyers believed they had offset their emissions, but little real change occurred. This is why checking additionality is crucial.

Thinking offsets cancel out emissions automatically

High-quality offsets can contribute, but many have not delivered the reductions they claimed. Cutting emissions directly is usually more reliable than relying on offsets.

Key takeaways

Carbon offsets are credits for emission reductions or removals elsewhere.
Additionality, permanence, leakage and over-crediting are major quality concerns.
Carbon removal includes forests, direct air capture and other methods, some very costly.
Article 6 rules and India's Carbon Credit Trading Scheme aim to build credible carbon markets.