What are the practical uses of carbon offsetting to achieve Net Zero at asset level?
After a few dents to its reputation, carbon offsetting has emerged as a viable and necessary part of the Net Zero puzzle. Vicky Cotton, head of ESG at Workman, explores how the property sector can maximise its use within asset-level carbon reduction strategies.
On the road to Net Zero buildings, there’s a clear hierarchy of carbon reduction steps. It begins with reducing carbon within construction, next is reducing operational energy use, followed by increasing renewable energy supplies onsite, through solar PV, for instance. To ignore these fundamental steps and instead divert straight to offsetting to meet the Net Zero target, is where perceptions of cheating, or greenwashing, can creep in.
However, once a Net Zero strategy is established, the UK Green Building Council says any remaining carbon can legitimately be offset to compensate for residual emissions: “As an interim measure towards Net Zero 2050, carbon offsetting should be seen as the last step in a proactive approach to; reduce construction carbon, reduce operational energy and increase renewable energy supplies.”
Window of opportunity for major interventions is ever decreasing
So, the question for asset managers should be centred around how carbon offsetting fits within a wider Net Zero Asset Plan. What part of the carbon reduction jigsaw can it fulfil, and how should this be planned into a Net Zero strategy?
Given that many organisations have set Net Zero targets for between 2030 and 2040, the window of opportunity for major interventions is ever decreasing. Carbon offset strategies can be used effectively as part of a Net Zero Asset Plan to fill the gap.
For many, this is where the complexity of the solution reveals itself. For example, if a gas boiler is due for replacement with an efficient low carbon alternative in three years, offsetting its carbon emissions for the interim period is a positive solution. But first, carbon credits would need to be assessed and calculated for the boiler’s remaining lifespan.
Each carbon credit – equal to one metric tonnes of reduced, avoided or removed CO2 – can be used to compensate for one tonne of CO2 or equivalent gases. Once a credit is used, it becomes an offset, moved to a publicly available registry for retired credits, and is no longer tradable. The carbon offset market could provide a tenth of the effort needed to cut greenhouse gas emissions in line with staying within 1.5C of global heating, according to The Taskforce on Scaling Voluntary Carbon Markets.
Is carbon offsetting effective?
In the absence of immediate action, offsetting by planting trees is still a positive step. Even better, says the UKGBC, if these projects are close to the location of the building itself. If asset managers are simultaneously striding towards the primary steps in the hierarchy, for example by introducing solar PV panels, at least steps towards Net Zero targets have been taken.
The key to making carbon offsetting effective is to ensure offsets are invested in schemes that build in additionality: ways of reducing carbon that would not otherwise have existed. Put simply; investing in an existing forest to protect it from logging, or investing in land where a forest can be created are both theoretically highly effective.
Additionality is also derived from switching energy supplies from fossil fuels to a renewable energy supplier such as Good Energy, Green Energy or Ecotricity. These companies not only source, but also create proprietary renewable energy by building their own wind, sun, and green gas mills.
The bottom line: offsetting must work in tandem
The bottom line is that offsetting must work in tandem with an ambitious internal carbon reduction strategy. The priority should always be to reduce carbon footprint before offsetting, but not every business can do that quickly. Some also believe that offsetting can be a catalyst for further carbon reduction action.
As the UKGBC states in its Renewable Energy Procurement & Carbon Offsetting report: “Carbon offsetting presents an opportunity, beyond emission reductions, to develop a broader value proposition that is aligned to long-term business strategies and supports the UK and global transmission to Net Zero.”