Tobias Stalder Corporate Sustainability Zurich, Switzerland, tobias.stalder@ch.abb.com; Anders H. Nordstrom Corporate Sustainability Stockholm, Sweden, anders.h.nordstrom@se.abb.com
Carbon neutrality
Carbon neutrality is achieved when an organization finds ways to eliminate or neutralize its carbon emissions. The neutralization of unpreventable emissions takes place via carbon offsets. Removal of CO₂ from the atmosphere is an example of carbon offsetting, as is the replacement of oil heating by a district heating system with lower emissions. For these carbon offsets to be credible, it is important that the avoidance of the emissions can be clearly attributed to the specific project and would not have occurred otherwise.
Net zero
Net zero is a newer, more precise and more demanding term. In contrast to carbon neutrality, net zero strongly focuses on emission reductions. To achieve net zero, an organization needs to reduce all its direct and indirect emissions as far as possible throughout the value chain. The remaining emissions that are hard to abate need to be physically removed from the atmosphere through carbon removal technology. Carbon removal technology includes methods that capture carbon directly from the air.
The Science-Based Targets initiative (SBTi) has established a net-zero standard – based on which, organizations can set targets that align with the goals of the Paris Agreement toward "curbing global temperature rise to well below 2o C above pre-industrial levels and pursuing efforts to limit warming to 1.5o C” [1]. Organizations committing to the SBTi must define a near-term target to achieve rapid emissions reductions. They may also define a long-term target in line with the net-zero standard. An organization that sets a long-term SBTi target must achieve net zero by 2050 by the latest, as set out in the Paris Agreement.
Emissions reduction is key
While the concept of carbon neutrality has been around for a long time, net zero is increasingly important. Net zero directly links an organization’s emissions reduction efforts to the overall reductions that society needs to make to achieve the aims of the Paris Agreement. Additionally, by focusing on emissions reduction, net zero has gained broad credibility. Carbon neutrality, on the other hand, could theoretically be achieved exclusively by purchasing carbon offsets without any actual emission reductions. Therefore, carbon neutrality aspirations must be combined with solid emissions reduction targets to remain credible.
Reference
[1] SBTi, “Ambitious corporate climate action – Science Based Targets.” Available: https://sciencebasedtargets.org/ [Accessed 28 February, 2023.]
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