Net Zero Carbon vs. Carbon Neutral: What You Need To Know About The Energy Sector

Carbon versus Greenhouse Gas (GHG) Emissions

Before we look at net zero and carbon neutral, we should clear up carbon emissions versus greenhouse gas (GHG) emissions. The terminology used for climate change action varies depending on what emissions are being discussed. Carbon emissions will just include the CO2 output from a process such as combustion. However, when GHG emissions are quoted, this includes carbon and a number of other gases that contribute to global warming. These gases are methane, nitrous oxide, and F-gases.‍

Source: Our World in Data

Carbon Neutral versus Net-Zero Carbon

Now that we have clarified carbon emissions v GHG emissions, let’s look at carbon-specific targets.

What is the difference between carbon-neutral and net-zero carbon?

While the two concepts are similar, the mainstream view is that Net Zero Carbon is more ambitious than just being Carbon Neutral. This comes down to one key difference.

Carbon Offsetting

Carbon offsetting plays a key role in both Net Zero Carbon and Carbon Neutrality targets. It is the approach to compensate for carbon dioxide emissions. Most companies do this by participating in schemes designed to make equivalent reductions of carbon dioxide in the atmosphere.

How do Net-Zero and Offsetting work in the Energy Sector?

Carbon emissions are split into three categories in accordance with the GHG Protocol. These are Scope 1, 2, and Scope 3. Scope 2 primarily relates to a company’s use of grid electricity. Depending on the sector, this could be responsible for a large portion of a company’s emissions from operations.



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FlexiDAO is a software provider in the energy sector aiming to accelerate the transition toward a decabornised world, leveraging on blockchain applications.