Carbon Offsetting & Insetting

Carbon offsetting refers to the action of compensating for emissions arising from an organisation’s activity, by participating in schemes designed to make equivalent reductions of greenhouse gas emissions in the atmosphere. An ‘avoidance offset credit’ is typically a project such as tree planting or renewable energy which are long-term/slower reduction methods. They offset emissions, but can take decades to remove the equivalent amount of emissions that have been created. A ‘removal offset credit’ is typically a more expensive option than an avoidance credit, however, these are the solutions that remove carbon in years not decades and will play a key role in preventing climate collapse. Examples include CCS (Carbon Capture and Storage), Biochar, or Kelp Forest creation. There have been developments in the maturity of the offsetting market in more recent years, with a switch to more of a removal credit focus, as opposed to avoidance.

What is carbon insetting?

Carbon insetting is the direct reduction of emissions within an organisation’s own supply chain, typically through the implementation of alternative fuels. The model that tracks and documents the environmental benefits of sustainable fuel use within freight is commonly referred to as “book and claim.” It is a solution based on a one-atmosphere approach – all greenhouse gas emissions enter the same atmosphere, so at a global scale it does not matter which truck, ship, or aircraft is using sustainable fuels instead of fossil fuels. As long as they are used in place of fossil fuels, we will see an overall reduction in greenhouse gas emissions in our atmosphere and we will be tackling climate change at scale. Below is an example of how Book and Claim works for shipping a container:

If Company A wishes to reduce its emissions by switching to shipping its container on a greener ship running on an alternative fuel type, but the ship that its cargo is loaded onto is not capable of using sustainable fuel, then Company A can pay for a different ship that is capable of running the sustainable fuel instead. This ship may be carrying an unrelated company’s cargo (Company B), but Company B has not paid for the low-carbon fuels to be used, so Company B cannot claim that they have used sustainable fuel on their shipments. Instead, Company A can ‘buy’ the right to claim the sustainable fuel carbon savings as their own through credits that are available to purchase after the shipment is complete and the fuels have been fully consumed. So, even though Company A's cargo was not directly transported on a ship running on sustainable fuels, they have paid for an equivalent amount to be used elsewhere. It is important to note here that Company A and Company B cannot both claim the Scope 3 emission reductions. If Company A purchases the credits, then only Company A can claim and retire the credits, Company B does not gain any benefit from the exchange and reports on their emissions as usual.

How do offsetting and insetting differ?

Offsetting and insetting differ as insetting directly reduces the greenhouse gases being emitted into the atmosphere, by choosing a more sustainable fuel that is not as highly emitting as the traditional alternative. On the other hand, offsetting doesn’t change anything within an organisation’s practices and instead offers the potential to compensate for the emissions that are created elsewhere, via a process that specifically aims to reduce emissions from the atmosphere.

Unlike carbon offsetting, insetting avoids the creation of greenhouse gas emissions at source via a book-and-claim or mass balance approach. This means that a customer of Woodland could purchase an equivalent amount of biofuel used to move their freight on a ship, plane, or truck anywhere across the globe and claim the environmental benefits using the theory of mass balancing emissions, similar to how you might purchase green energy credits to reduce market-based energy emissions.

What does Woodland Group offer?

Our team of sustainability professionals are on hand to support any customer through the process of offsetting or insetting their supply chain emissions. Although we do not directly operate credit registries,

Woodland Group can provide customers with a variety of offsetting and insetting solutions via our network of trusted partners, whilst providing support and guidance at every step of the process.