10 Questions to Ask Your Offsetting Partner

Carbon offsetting plays an important role in most companies’ sustainability journeys. But with a range of offset projects on the market, it can be difficult to know where to begin.

You might choose to work with an agency, consultancy or a digital carbon marketplace to help you build an offset portfolio that aligns with your company’s sustainability goals. Such partners might operate solely in the carbon offsetting space, or might offer integrated services, which also include emissions measurement and reduction. Whichever type of solution you opt for, it’s important to conduct your due diligence. We’ve compiled a handy list of questions to ask prospective offsetting partners before you make your choice.

1. What criteria do you use when selecting carbon offset projects?

There are several key factors that carbon offset partners should bear in mind when selecting the projects that they work with. Examples include:

Additionality: GHG reductions are additional if they go above and beyond the reductions that would have occurred without the implementation of the project. Additionality is important, because it ensures that the financial investment in a project makes a quantifiable, positive difference to our climate.

Verifiability: One easy first step is to check whether the projects that your offsetting partner works with have been verified by an independent third party, is by looking into whether they are affiliated with one of the main voluntary carbon market registries. These include Verra, The Gold Standard (GS), The American Carbon Registry (ACR) and Climate Action Reserve (CAR). These registries typically verify nature-based projects while other verifiers may focus on other specific project types such as the European Biochar Certificate (EBC) which focuses on biochar projects as its name indicates. Additionally, certain projects may also have been rated by independent experts such as BeZero, Carbonplan, Perennial or Sylvera, subject to their types.

Permanence: One of the biggest challenges with offsetting GHG emissions, is that they are on the whole very long-lived. Up to 25% of carbon emissions remain in the atmosphere for hundreds of thousands of years. This is why it’s so important that our efforts in reducing and offsetting emissions are not just effective, but also permanent. This means that the GHGs removed can’t return to the atmosphere at a later date. Permanence is directly linked to project type. For example, concrete mineralisation, which is a chemical reaction, is permanent for over a thousand years, whereas a reforestation project is limited to the life of the tree species (which generally ranges from forty to a thousand years).

Leakage: Leakage occurs when efforts to reduce emissions in one place simply shift emissions to another location or sector where they remain uncontrolled or uncounted. There are two main types of leakage: activity shifting leakage and market leakage. The former refers to leakage at the project’s location, e.g. when a forest conserved in one area leads to deforestation in another area close by. The latter refers to mitigation policies having an effect on commodity prices, which in turn leads to changes in investment patterns, potentially favouring other high emissions activities. There are a number of both product-specific and standardised approaches that can be used to address leakage, and it’s worth asking your prospective offsetting partner about these.

2. What’s the difference between avoidance and removal offsets?

As the name suggested, carbon removal projects effectively remove carbon from the atmosphere. Such projects can be split into two approaches: nature-based solutions and engineered solutions (see Question 3 for more detail).

By contrast, carbon avoidance projects prevent carbon that would have been released into the atmosphere from actually being released. Examples include building a wind farm to reduce reliance on fossil fuels, or reducing forestry loss and preserving the existing biomass.

3. What’s the difference between nature-based and engineered removals?

Nature-based solutions (NBS) involve conserving, restoring, or better managing ecosystems to remove CO2 from the atmosphere. One example is regenerative agriculture, which works to improve soil quality whilst maintaining profitable farming practices.

Engineered (or science-based) removals, in contrast to NBS offsets, rely on technology and infrastructure to actively and (more) permanently sequester carbon. One example is enhanced weathering — speeding up the natural mineral weathering processes to capture carbon in calcium-based sediments that eventually turn to solid rock.

4. Do your offset projects offer additional benefits beyond climate impact?

Additional benefits are any positive impacts from offsetting projects, outside of GHG emissions mitigation. They are more common in nature-based projects than engineered removals. This is because NBS projects are usually in developing countries where the impact of biodiversity and conservation work is greater.

Additional benefits can be focused around many different areas of life, including community, education, economic development and more. One example of both an educational and economic benefit is upskilling a local community in a particular technology required to keep the offset project running, and in doing so, creating new opportunities for better paid work. Likewise, improving climate literacy within a given region can spearhead other emissions reduction projects which will in themselves yield further benefits.

5. Do your offset projects comply with recognised standards?

As mentioned in the answer to question 1, one of the best ways for an offsetting partner to check the additionality, verifiability and permanence of the projects that they work with, is to ensure that they are part of the established big four registries — Verra, The Gold Standard (GS), The American Carbon Registry (ACR) and Climate Action Reserve (CAR), or whether, in addition, they have been rated by independent experts such as BeZero, Carbonplan, Perennial or Sylvera.

At the same time, new and emerging offsetting projects shouldn’t be forgotten. They need financial support (through purchased carbon credits) to help them to scale. If your prospective climate tech partner works with such projects, don’t automatically discount them. There are many promising new projects with the potential to have a significant impact on emissions mitigation. Organisations such as CarbonPlan can provide a detailed assessment of their capabilities and effectiveness.

6. How closely do you work with project developers?

There are many resellers and brokers in the carbon offsetting market. As a result, you may have several middlemen between you and the project itself — with everyone taking a cut along the way. Ultimately, this means that less money is going to the long-term running of the project.

Ask your prospective offsetting partner whether they have a direct relationship with the projects that they work with. A strong relationship is beneficial for both sides, as it means that you’ll have much greater insight into the development of the project that you’re investing in.

7. What project types do you cover?

It’s worth asking your offsetting partner about the range of offset projects that they cover, as each has different costs and cost benefits. Do they include both nature-based and engineered removal projects as part of their portfolio or marketplace? Do the projects that they partner with carry any additional benefits?

Remember that the broader the range of projects available to you, the more you can diversify your portfolio. Look for a provider who is clear about the impact of each project, and can give you solid answers about its additionality, verifiability, permanence and leakage.

8. Are offsets an easy way to be sustainable?

Carbon offsetting is not a single solution to the climate change crisis, and crucially, it shouldn’t be used in isolation. When adopting a sustainability strategy, a company should first look into emissions measurement, then employ reduction strategies, and only use offsetting as a means of addressing unavoidable emissions. If your prospective offsetting partner speaks of carbon offsets as an easy, standalone way for your company to be sustainable, this should trigger alarm bells.

9. Is there a difference between carbon neutrality and net zero?

There is an important distinction between carbon neutrality and becoming ‘net zero.’ Carbon neutrality means balancing greenhouse gas (GHG) emissions through ‘offsetting’ or actively removing them from the atmosphere. A commitment to net-zero carbon means reducing greenhouse gas emissions and only using offsetting for those emissions that cannot be removed.

10. What fees are you charging for selling offsets?

There has been a distinct lack of price transparency in voluntary carbon markets, which has led some resellers to charge high margins, which are sometimes as much as double the original price that they paid to the project developers. So it’s worth asking your offsetting partner what fees they’re charging, and what percentage of this cost goes directly to the project.

It’s all about making offsetting clear and accessible

We hope that the answers to the above questions will stand you in good stead when choosing an offsetting partner. We’d like to leave you with one final thought — choose a partner who makes offsetting as accessible as possible, with clear explanations of project scope, impact and price. That way, the selection process will be much easier and more enjoyable. Why not take a look at what Pledge has to offer?