Companies claiming Carbon Neutrality

Large internet companies are at the forefront in the battle to reduce carbon footprint of the internet. Companies choose where the electricity they consume comes from and the mix of energy they are using. While some companies have not made any efforts to using renewable energies, many are committed to using renewables and being Carbon Neutral.

Internet companies that want to be Carbon Neutral, choose Carbon Offsetting to reach that goal.

What are Carbon Offsets?

Carbon offsets are one of the ways how to reduce carbon footprint globally. Carbon offset are the reason why many companies are able to make promises of being carbon neutral. How is that possible? How can a data center, for example, be carbon neutral when they use massive amounts of energy? The answer, or rather, the proposed answer is by using carbon offsets.

An example of using carbon offsets is when a company realizes they have to make upgrades to their plant in order to keep in line with carbon reduction agreements. The upgrades happen to be too expensive to make business sense. So now what? Somewhere else another company is thinking about building a coal plant. Coal happens to be very bad for the environment, as we all know. What if the first company would pay a little money for the coal plant builders, so they would build a renewable energy plant instead?

This is where carbon offsets come to play. The first company skips upgrades and buys carbon credits. The second company earns carbon credits by creating a more sustainable power plant. Credits exchange hands. Carbon has been offset from the first company. In the end carbon offsetting is a great idea, but in practice, it is often difficult to know how much carbon is actually being offset. Other questions also are still there. Will the effect of carbon offset last? Would the carbon be reduced if it was not for a certain project? How are the results verifiable?

Types of carbon offsetting projects

There are three very common ways to do a carbon offset project. Landfill gas capture, agricultural gas capture, and forestry projects. Each with their pros and cons.

Landfill gas capture

Landfill gas capture means methane gas is captured from decomposing waste. There are differences across the globe in waste management laws and this creates opportunities to create carbon offsetting projects. Some countries have very little legislation and some are more strict. In the US small and medium-sized waste plants do not have to process their waste and there are possibilities to collect a lot of methane.

The collected methane can be burned to create energy or heat, or after some processing, the gas can be sent to a natural gas grid, or sold as compressed gas. If there are no other options available, the methane gas can be set on fire. This creates carbon, but methane is considered much worse for the environment than carbon.

Agricultural methane capture

The process of agricultural methane capture is similar to landfill gas capture, but animal waste is used. The waste is collected and processed into a usable form to be sold or used for energy consumption.

Forestry Projects

Carbon is stored in forests as they grow. Once the wood is burned or rots away, the stored carbon gets released. Some carbon offsetting projects protect forests from destruction or degradation. Others try to create new forests. Many companies, such as Google, consider forestry projects to problematic at times. In fact, there are numerous examples where forestry projects have gone wrong.

Leakage becomes a problem with forest protection and also political climate. Leakage means that if an area in a forest is protected from logging through a carbon offsetting project, will the loggers be able to just drive a few miles down the road and start logging there? The political climate, on the other hand, might change and agreements to protect the forests get ignored.

What about Carbon Credits then?

Basically, a Carbon Credit is a certificate to offset 1 kWh worth of Carbon. A credit must contain the following information to be a Carbon Credit:

  • Where does the Carbon Credit come from?
  • Who does the Carbon Credit belong to now?
  • A unique serial number belonging to the Carbon Credit
  • How the Carbon Credit was generated?
  • Standard of the Carbon Credit
  • The permit for a right to be worth 1 ton of carbon

How do carbon credits work then? Someone has to keep track of the credits right? If no one would keep track of the carbon credits, who would prevent the same piece of forest being protected over and over again?

Carbon Credit Registry

That someone, the track keeper, of carbon credits is a Carbon Credit Registry. Their job is to make sure the credits do not get used again and again and also give the exact numbers how much carbon can a company offset. The process involves four parties, the credit buyer, the credit seller, a third party verifier, and the Carbon Credit Registry.

When Carbon Credits are used, they follow roughly the following:

  1. A company wants to buy the credits to offset their carbon footprint
  2. Another company wants to sell carbon credits
  3. Someone outside those companies verifies how many kWh 1 credit means
  4. The verified credits are issued to the Carbon Credit Registry
  5. Ownership of the credits is transferred to the buyer company X
  6. Company X uses the credits and the credits are designated retired

A Carbon Credit Registry must make the Carbon Credit data available to everyone.