What is the meaning of carbon-neutral, net-zero and climate-neutral?

There are several terms that describe ambitious climate action targets such as ‘carbon-neutral’, ‘net-zero’ and ‘climate-neutral’, and we are sometimes asked whether these terms can be used interchangeably.

Are the terms ‘carbon-neutral’, ‘net-zero’ and ‘climate-neutral’ the same or are they different?

Whether you are using ‘carbon-neutral’, ‘net-zero’, or ‘climate neutral’ in your goal, they all reflect the same intent to reduce or eliminate your organisation’s impact on the climate system.

In most cases, these terms are and can be used interchangeably, but there are differences in how they are defined and what they are taken to mean in terms of how goals are to be achieved. Let’s have a look at the definitions of the terms first.

How do you define carbon-neutral, net-zero emissions and climate-neutral?

According to the IPCC Special Report: Global Warming of 1.5°C, the definitions are as follows:

Definition of carbon neutrality

Carbon neutrality, or net-zero carbon dioxide (CO2) emissions, is achieved when your organisation’s CO2 emissions are balanced globally by CO2 removal, typically over one year.

Definition of net-zero emissions

Net-zero emissions are achieved when your organisation’s emissions of all greenhouse gases (CO2-e) are balanced by greenhouse gas removals, typically over one year.

Definition of climate neutrality

Climate neutrality is achieved when organisational activities result in no net effect on the climate system. In climate-neutral claims, regional or local bio-geophysical effects have to be accounted for as well, such as radiative forcing (e.g. from aircraft condensation trails).

In summary, a carbon-neutral target relates to carbon dioxide only, whereas a ‘net-zero’ goal includes all greenhouse gases, and a ‘climate-neutral’ goals extends to other effects such as radiative forcing as well. For an explanation of the different greenhouse gases and radiative forcing, please read the appendix.

For most companies, carbon-neutral, net-zero and climate-neutral mean the same.

If an organisation releases mainly carbon dioxide, there is not much difference between using the term carbon-neutral, net-zero or climate-neutral.

Also, for most sectors, net-zero emissions and climate neutrality are the same due to the most important climate impact being the release of greenhouse gases into the atmosphere. However, some sectors, such as aviation, should consider other climate impacts from non-CO2 radiative forcing as well.

Examples of carbon-neutral, net-zero and climate-neutral claims

You can see examples of how these targets can be turned into claims in the graphic below. The horizontal axis shows the potential scope of an organisation’s emissions, from CO2-only to climate neutral. The vertical axis shows the scope of activities that are covered, from site level through to the full value chain of an organisation.

WRI definitions net zero carbon neutral climate neutral

Figure 1: Scopes of carbon neutrality, net-zero and climate neutrality. Source: CDP and SBTi.

For examples of how organisations are phrasing their commitments, have a look at the following:

Apple, which is already carbon neutral for corporate emissions worldwide, committed to be 100% carbon neutral for its supply chain and products by 2030. They plan on ‘bringing their entire footprint to net zero 20 years sooner than IPCC targets’.

H&M, have committed to the following:

  • Climate positive by 2040 throughout H&M Group’s entire value chain.
  • Climate-neutral supply chain for our manufacturing and processing factories owned or subcontracted by our suppliers as well as our suppliers’ own suppliers (i.e. fabric mills, fibre processors, spinners or tanneries) by 2030.
  • Reduce scope 1 and 2 GHG emissions by 40% before 2030 (baseline 2017).
  • Reduce scope 3 GHG emissions from purchased raw materials, fabric production and garments by 59% per product before 2030 (baseline 2017).
  • Increase annual sourcing of renewable electricity from 95% in 2017 to 100% by 2030.

In Australia, Atlassian committed to:

  • running their operations on 100% renewable energy by 2025
  • setting science-based targets to limit warming to 1.5°C
  • achieve net-zero emissions by no later than 2050.

Reaching carbon neutrality/net-zero emissions/climate neutrality

In addition to what climate forces are included in targets, there are also different interpretations of how a particular target will be reached.

For example, most people understand a net-zero or a climate-neutral target to mean that a business puts significant emphasis on reducing or mitigating emissions in their own organisation, and will buy offsets to address residual emissions. For many, a carbon-neutral goal is seen as a strategy that mainly relies on the purchase of carbon offsets. In that sense, a carbon-neutral goal can be seen as an interim goal on the journey to net-zero emissions.

Please read the appendix for further information on offsets.

Carbon neutral under Climate Active

Climate Active is a Commonwealth Government program that allows Australian organisations to achieve certified carbon neutral status for their whole organisation, products/services, events and buildings/precincts. Climate Active is a rigorous program which ensures that your climate claim is credible. For more information on this program, please read our three-part blog series- Part 1, Part 2 and Part 3.

When going carbon neutral under Climate Active, all greenhouse gas emissions must be considered, including your organisation’s emissions, emissions in your value chain, and radiative forcing for flights. In addition, you need to develop a strategy on how to reduce emissions in your organisation, not just offset them.

When committing to be carbon neutral under Climate Active, you can safely assume that your carbon-neutral goal is synonymous with a climate-neutral or net-zero goal in terms of emissions coverage, as shown in the following graphic:

Climate Active definition of carbon neutrality

Figure 2: Climate Active carbon-neutral can be interpreted to be the same as net-zero and climate-neutral

Five factors you should consider when setting your climate target

To ensure that you are setting a credible target and to avoid reputational damage, you should be mindful of the following considerations when defining your carbon-neutral/net-zero/climate-neutral target:

  1. Define what greenhouse gases you include in your claim. Only CO2, or all relevant greenhouse gases?
  2. Define what entity is addressed in your claim. Only operational emissions, or also your supply chain? Will you make an event carbon neutral or one of your buildings or products/services?
  3. Define what emission sources form part of your claim. Will you include all carbon scopes or just a select few? Will you perform a materiality assessment across your emission sources to find out which you should include?’
  4. Define the strategy on how you intend to reach your target. Will you use carbon offsets? How much focus will you place on reducing emissions that fall under your operational control? How much focus will you put on reducing emissions in your value chain?
  5. Define the timeframe. Be mindful of setting the year you want to reach your goal at least in line with science. Consider setting yourself an interim carbon reduction target in line with science.

What comes after net-zero?

Reaching net-zero is an important achievement for any organisation, but it is only one step towards stabilising our climate. Beyond net-zero, we need to remove more greenhouse gases than we are adding to the atmosphere.

Ambitious climate change leaders are starting to turn their attention to balancing out their historical emissions, as well as their current and future emissions. They are also beginning to think about becoming ‘carbon-negative’ or ‘climate-positive’, which means that you are removing more GHG from the atmosphere than you are adding to it.

Appendix

What greenhouse gases are there?

When thinking of greenhouse gases, most people would list carbon dioxide as the main culprit. CO2 is indeed the most prevalent greenhouse gas, but according to the GHG Protocol, there are seven greenhouse gases (GHG) that organisations should report on:

  1. Carbon dioxide (CO2), which is mostly emitted by burning fossil fuels
  2. Methane (CH4), which is mostly emitted by growing ruminant animals such as sheep and cows, and from landfills
  3. Nitrous oxide (N2O), which is mostly emitted by growing crops and decomposing waste
  4. Hydrofluorocarbons (HFCs), which is mostly emitted by refrigeration equipment
  5. Perfluorocarbons (PFCs), which are mostly emitted by the aluminium industry
  6. Sulphur hexafluoride (SF6), mostly emitted by switchgear
  7. Nitrogen trifluoride (NF3), mostly emitted in computer manufacturing

Carbon dioxide is the most important greenhouse gas due to the vast quantities that are being emitted and due to its long life – hundreds of years – in the atmosphere. Another such ‘long-lived’ GHG is nitrous oxide, at more than 100 years.

Methane, for instance, exists in the atmosphere for a much shorter period, but has a much higher global warming potential than CO2, meaning that this gas causes more global warming per tonne than CO2.

Most fluorinated gases (PFCs, SF6, HFCs) have very high global warming potentials, so small atmospheric concentrations can have disproportionately large effects on global temperatures. They can also last in the atmosphere for thousands of years. And whereas carbon dioxide can be absorbed by growing plants, no living organism needs HFCs in any of their processes.

Most organisations are emitting carbon dioxide as their most significant greenhouse gas.

What is non-CO2 radiative forcing?

A recent study called ‘The contribution of global aviation to anthropogenic climate forcing for 2000 to 2018’ shows that global aviation warms Earth’s surface through both CO2 and net non-CO2 contributions.

Aviation contributions involve a range of atmospheric physical processes, including plume dynamics, chemical transformations, microphysics, radiation, and transport, which you can see in the image below. Interestingly, the study reveals that two-thirds of the climate impact from aviation is caused by emissions other than CO2.

Climate forcings from global aviation

Figure 3: How aviation affects the climate system

How can you reach carbon neutrality/net-zero/climate neutrality?

To reach the goal of the Paris Agreement, emissions must be reduced as close to zero as possible, as quickly as possible. By 2030, we need to have halved emissions.

Both CO2 and non-CO2 emissions can be reduced by decarbonising grid energy, building more sustainably, producing our goods and services more sustainably and transporting our goods more sustainably.

In addition, targeted non-CO2 mitigation measures can reduce nitrous oxide and methane emissions from agriculture, as well as methane emissions from the waste sector. HFCs in refrigeration equipment can also be replaced with less harmful substances.

Offsetting

Offsets are a useful way to reach a carbon-neutral target right away. One offset equals one tonne of greenhouse gas emissions that is avoided or reduced elsewhere. However, you need to make sure that you purchase highly credible carbon offsets that meet rigorous selection criteria.

Carbon offsets can be generated from projects that remove carbon from the atmosphere, such as planting trees, which need CO2 to grow.

Offsets can also be generated from activities that avoid emissions (compared to a hypothetical business-as-usual scenario), such as wind farm projects, or energy efficiency projects.

Which is more popular? Carbon neutral, net-zero or climate-neutral?

Analysing past submissions to CDP shows that most companies use the term ‘carbon-neutral’ over terms such as ‘climate-neutral’ or ‘net-zero’. However, the term ‘net-zero’ is becoming increasingly popular.

A search on Google trends over the past three years reveals that in Australia, the term ‘carbon-neutral’ is a more popular search term compared to ‘net-zero’, which in turn is more popular than the term ‘climate-neutral’.

Popularity of search terms on Google

Figure 4: Google search trends for ‘carbon-neutral’, ‘net-zero’ and ‘climate-neutral’[1]

[1] Numbers represent search interest relative to the highest point on the chart for the given region and time. A value of 100 is the peak popularity for the term. A value of 50 means that the term is half as popular. A score of 0 means there was not enough data for this term.

100% Renewables are experts in helping organisations develop their climate action strategies and plans, and supporting the implementation and achievement of ambitious targets. If you need help to develop your Climate Action Strategy, please contact  Barbara or Patrick.

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