What is a carbon credit?

Contributing to positive climate action and balance out unavoidable emissions through verified carbon credits

Carbon credit/carbon offset meaning: First created in 2015, a carbon credit represents a digital tradable certificate confirming that one tonne of carbon dioxide (either CO2 or equivalent greenhouse gas emissions) has been averted in a given year by an environmental project or business.

The simple formula is: 1 carbon credit represents = 1 tonne of carbon dioxide emissions, or other relevant greenhouse gases normally represented as 1t Co2e.

Diving a little deeper

The terms carbon offset and carbon credit (or simply “offset credit”) are used interchangeably, though they can mean slightly different things. A carbon offset broadly refers to a reduction in GHG (Greenhouse Gases) – or an increase in carbon storage (e.g. through land restoration or the planting of trees) – used to compensate for greenhouse gas emissions that occur elsewhere.

A carbon credit is a transferable instrument certified by governments or independent certification bodies to represent an emission reduction of one metric tonne of carbon dioxide – CO2, or an equivalent amount of other greenhouse gases. The purchaser of a carbon credit can “retire” it to claim the underlying reduction towards their own carbon footprint or sell carbon credits it no longer needs.

Co2 is the most abundant greenhouse gas produced by human activities, and the most important pollutant to reduce to limit potentially irreversible climate change. There are other greenhouse gases which make up a carbon footprint. (See diagram)

What is Carbon Offsetting?

Offsetting by using a Carbon credit is not the silver bullet or the perfect tool. If used carelessly carbon credits could slow the reduction of greenhouse gas emissions and the progress of climate change. How you might ask? If carbon credits are used to offset greenhouse gases and yet the business or individual buying the carbon credits does nothing to reduce their emissions it’s known as greenwashing. Legislators will be watching this closely particularly where businesses are purchasing carbon credits and then making net zero emissions claims but not actually implementing or achieving emission reduction targets.

Using a carbon credit responsibly first requires a strong plan for reducing carbon emissions before purchasing carbon credits. Carbonhalo always advocates the adoption of a reduction management plan combined with a Carbon Offset Program which in part uses carbon offset credits to fund climate projects.

What is a carbon offset project?

A carbon offset project is a certified emissions reduction project which under strict application and assurance is certified to generate carbon credits. These carbon credits are then made available within the voluntary carbon markets to be purchased by businesses or individuals that wish to offset their carbon dioxide emissions. It’s important to note that projects claiming to reduce greenhouse gas emissions are audited each year by international verification bodies like Verra and UNFCCC making these high-quality carbon credits. These projects are not confined to reforestation or planting trees, there are a number of climate change projects that sell carbon credits in renewable energy, biodiversity, prevention of deforestation, nature preservation, and technology that actually removes carbon dioxide from our atmosphere.

Typically carbon offsets made available by these projects also address some key climate change sustainability goals like extreme poverty, woman’s rights, education, supplying basic living necessities of developing communities, employment of indigenous people, and preservation of habitat.

Projects that are not administered by a verification body have in the past come under scrutiny for generating carbon credits there were not actually there. The point being stick with climate change projects that are certified by leading international bodies.

Offsetting Australia’s business carbon emissions

What is carbon offsetting for businesses?

Carbon offsetting for businesses is when a business chooses to make a commitment and its social responsibility by doing what it can to reduce its carbon dioxide emissions (carbon footprint). Part of their reduction strategy may include: purchasing carbon credits to offset the direct and/or indirect GHG emissions that they create through their normal business practices. 

Carbon offsetting Australia’s business emissions is an important step in empowering climate action that makes a positive impact on the globe.  

Carbon offsets can balance out unavoidable carbon dioxide emissions by funding a certified carbon offset project. Carbon offsets Australia are regulated by the Clean Energy Regulator governing the projects that wish to sell carbon credits within the carbon markets.

Access personal carbon credits in Australia

What are carbon credits for individuals?

Like a business, an individual or family may decide to take responsibility for their own greenhouse gas emissions. This is known as your Personal carbon footprint. Calculating your emissions is not difficult by using our Personal Carbon Calculator. The Carbonhalo calculator will provide categorised results and helpful suggestions for you to reduce your emissions with a little adjustment to your lifestyle.

Once you have your results an individual has the option to buy carbon credits to offset the remaining emissions, through simple monthly subscription plans. Carbonhalo funds climate change projects internationally and combines carbon offset Australia projects within its portfolio.