Carbon offsetting

What is carbon offsetting?

Carbon offsetting aims to achieve an overall net reduction in greenhouse gases. Rather than reducing carbon emissions, individuals and businesses are encouraged to compensate for their emissions to achieve a carbon neutral net result.

Tree planting is the most common form of offsetting, but it can also be achieved through renewable energy and energy conservation.

Consumers are able to offset their carbon emissions by purchasing credits to fund projects which avoid or reduce emissions, such as biomass generation plants and wind farms. The projects sell the offset credits, the emitters buy the offset credits and the intermediary carbon traders make up the 'carbon market'.

A Quality Assurance Scheme (QAS) was launched in 2009 with a Quality Mark, so that consumers could be sure the offset credits they bought were mitigating the effect of their emissions. Only Kyoto-compliant international credits were approved by the QAS. These included:

Certified Emissions Reduction credits (CERs) produced by the UN's Clean Development Mechanism; European Union Allowances (EUAs) produced by the European Union's Emissions Trading System (EU ETS), and Emissions Reduction Units (ERUs) produced by the UN's Joint Implementation mechanism. VERs – Voluntary Emissions Reduction credits – are not compliant with the UN mechanisms and are verified instead by non-government organisations.

The QAS ran from February 2009 to June 2011. The scheme is now closed.

The Government made a commitment in 2005, as part of the UK Sustainable Development Strategy, to offset all emissions resulting from official and ministerial air travel. Subsequently a Government Carbon Offsetting Facility (GCOF) was launched in 2007 to meet this commitment.

Under the first GCOF contract (GCOF1) 305,000 CERs were purchased to offset the total air travel emissions of participating government departments for three years, from the beginning of April 2006 to the end of March 2009.

The second phase, GCOF II, was launched in January 2010 by DECC in partnership with the Government's procurement agency Buying Solutions. GCOF II will cover government air travel emissions from 1 April 2009 to 17 January 2013 and is available for all the public sector to offset emissions from a variety of sources.


Carbon offsetting has proved to be controversial, with many environmental groups questioning its real benefits. Groups such as Friends of the Earth warn the UK cannot "plant its way out" of climate change but instead must reduce its use of fossil fuels. Other groups agree that carbon offsetting does little to counteract the problems causing climate change and does not provide a radical, long-term solution.

In particular the reliance on tree planting to offset carbon dioxide has been questioned. As trees die and decay they release stored carbon back into the environment, meaning benefits of carbon offsetting are lost over the long-term. The government has recognised this and called for a technology based approach.

However, supporters argue tree planting is low cost compared to other mitigation options, making it especially attractive to developing countries, many of which are set to become major polluters.

The Clean Development Mechanism, one of three market-based mechanisms included in the Kyoto Protocol, is also controversial. The CDM allows projects in developing countries to earn CERs which can be traded and sold and used by industrialised countries. The aim of the mechanism is to stimulate sustainable development and emissions reductions, whilst at the same time giving industrialised countries flexibility to meet their emission reduction limitation targets.

However, a recent report from Friends of the Earth entitled 'A Dangerous Distraction' was highly critical of the CDM, suggesting that rather than reducing global emissions or benefiting developing countries, offsetting was merely leading to more ingenious ways to avoid cutting emissions. The report concluded that offsetting was: profoundly unjust, fundamentally flawed and cannot be reformed.


Operational since the beginning of 2006, the Clean Development Mechanism has already registered more than 1,650 projects and is anticipated to produce CERs amounting to more than 2.9 billion tonnes of CO2 equivalent in the first commitment period of the Kyoto Protocol, 2008–2012.

UNFCCC – February 2012


"Carbon offsetting is used by rich societies to carry on polluting but without the guilt.
"Climate change is the single biggest environmental threat. Climate scientists say we need to reduce greenhouse gas emissions now. We cannot carry on polluting. We need incentives for businesses and people to reduce their emissions. Offsetting schemes encourage the very opposite."

Friends of the Earth – 2011