A common issue in sustainability is the constantly changing language of climate action. It feels like many climate science organizations use conflicting language to talk about the same thing, such as carbon offsets vs. carbon credits, and carbon credits vs. carbon removals. It can be frustrating and confusing, but this is not just changing words for the sake of change. The new language generally introduces important distinctions that help improve our direction on climate action.
While carbon removals have emerged as a new term in the carbon credits landscape, these are not new or different than what many carbon credit buyers are already familiar with. Carbon removals have been part of the voluntary carbon market for years, and Terrapass has long offered high-integrity carbon removals.
However, the reason why the terminology is changing is because carbon removals refer to a specific type of carbon credit stemming from carbon removal projects, rather than those that avoid emissions.
What Is Carbon Removal?
Carbon removal is essentially exactly what it sounds like — it’s the practice of removing carbon that already exists in the atmosphere and storing it for an extended period.
For example, Direct Air Capture (DAC) is a technology that draws in air and filters the CO₂. The non-CO₂ air then returns to the atmosphere, while the captured concentration of CO₂ can be managed in several ways, such as by injecting it into specific types of rock formations for long-term storage.
To finance these projects, developers often sell carbon removal credits to buyers looking to offset their greenhouse gas emissions. One carbon removal credit represents the removal of 1 metric ton of carbon dioxide equivalent (CO₂e) from the atmosphere.
While buying carbon removal credits is not a substitute for reducing your own emissions, carbon removal still plays an important role in tackling the climate crisis. For example, a company might switch from a fossil fuel to a renewable energy supplier to cut emissions, yet cutting other sources of emissions like from business travel or data centers might be less in your control.
So, purchasing carbon removal credits can finance the positive impact of removing CO₂e from the atmosphere to balance the negative impact of the emissions you directly or indirectly cause elsewhere.
To get a better sense of the emissions you want to offset, use our carbon footprint calculator to see the carbon impact of your company’s on-site energy usage, travel, server usage, and more.
Carbon Removal Credits vs. Carbon Reduction Credits
Carbon removal credits and carbon reduction credits are related but not interchangeable. Both represent an offset of 1 metric ton of CO₂e per credit, but here’s the difference:
- Carbon removal credits are generated when a project removes a greenhouse gas from the atmosphere.
- Carbon reduction credits are generated when a project prevents a greenhouse gas from entering the atmosphere.
Carbon reduction credits are also sometimes called carbon avoidance credits, as carbon reduction projects — like methane gas capture at landfills — avoid new emissions that would otherwise enter the atmosphere if it were not for those projects.
However, sometimes carbon reduction credits are viewed as separate from carbon avoidance credits. While reduction credits finance lower emissions vs. business-as-usual, sometimes avoidance activities like reducing deforestation, which help prevent carbon stored in trees from going back into the atmosphere, are viewed as a separate category.
For simplicity’s sake, though, we view the most important distinction as being carbon removals vs. carbon reduction/prevention. Greenhouse gas reductions can also involve areas such as reducing deforestation, which is a bit less direct than landfill gas capture but still prevents greenhouse gas emissions from entering the atmosphere — because if those trees were otherwise cut down, more emissions would ultimately enter the atmosphere, given the loss of the trees’ carbon sequestration capabilities.
Given these differences in types of carbon reductions, sometimes carbon reduction credits are viewed as separate from carbon avoidance credits, where reduction credits finance activities that reduce emissions vs. the baseline scenario.
Types of Carbon Removal Projects
There are many different types of carbon removal projects, which vary based on how long they store carbon and whether the solutions primarily come from nature or engineered solutions.
In terms of storage, carbon removal projects are one of the following:
- Durable vs. Non-Durable Carbon Removals: Durable carbon removals are those that store the carbon for hundreds or thousands of years — perhaps even millions — before ending up back in the atmosphere. In contrast, non-durable carbon removals provide shorter storage periods, generally less than a century but often still decades.
Both durable and non-durable carbon removals have their pros and cons. Durable storage has greater permanence. However, there may be technical limitations and higher costs. Some non-durable carbon removal projects like certain nature-based solutions also have additional benefits beyond emissions effects, such as promoting biodiversity.
In terms of how carbon removals are created, projects fall into one of two categories:
- Nature-Based vs. Engineered: Nature-based solutions remove carbon from the atmosphere through systems that exist in nature. Human intervention may be needed to get the ball rolling, but nature does the rest. For example, reforestation is a nature-based solution that can involve planting trees in an area previously cleared for pasture. As those trees grow, so too do their carbon dioxide removal capabilities.
- In contrast, engineered carbon removals are technology-focused solutions. Nature may still be involved, such as how DAC can include injecting CO₂ into rock formations, but that still largely depends on engineering.
Zefiro Methane OOG 1 – Drake
Examples of Nature-Based vs. Engineered Carbon Removal Projects
In general, engineered solutions correlate with durable carbon removals and nature-based solutions correlate with non-durable carbon removals, such as due to the limited lifespan of plant life that stores carbon vs. geological formations that can last millennia. Still, the storage timeframe depends on the specific project.
Nature-based solutions include improved forest management that facilitates new forest growth, such as the Restauración Forestal project in Mexico’s Yucatán Peninsula that Terrapass supports. Another type of nature-based carbon removal project involves regenerative agriculture, where practices like reduced soil tillage and planting cover crops enable the soil to store more carbon, as seen in the AgreenaCarbon Project, which works with farmers in Europe.
Blue carbon credits are another exciting area of nature-based carbon removals that incorporates the vast potential for coastal marine ecosystems to store carbon. For example, some mangrove conservation projects not only protect these ecosystems but also rehabilitate them to form new growth, thereby sequestering more carbon. Blue carbon projects could also involve practices like cultivating seagrasses and kelp that can store carbon.
Some examples of engineered solutions include direct air capture, as mentioned, as well as enhanced rock weathering, which essentially speeds up the weathering process of certain rocks, like basalt. In doing so, the weathered rocks expose certain minerals that react with existing CO₂ dissolved in water, such as from rain, to form new rocks or a solution that makes its way into the ocean to provide long-term carbon storage.
Biochar is another emerging engineered solution gaining momentum in voluntary carbon markets. This solution involves controlled burning of organic waste at high temperatures to create a carbon-rich substance that can be added to soils. Biochar is similar to charcoal, but in addition to more circular production processes, biochar is intended to lock carbon away for hundreds or thousands of years and improve soil health, while charcoal is burned for fuel, thereby releasing the carbon back into the atmosphere.
Examples of Carbon Reduction Projects
In contrast with nature-based and engineered carbon removals that draw down carbon that already exists in the atmosphere, carbon reduction projects prevent or avoid new emissions that would otherwise enter the atmosphere, thereby generating emissions reduction credits. Some examples include preventing deforestation to reduce carbon emissions that would otherwise result from clearing these ecosystems, as seen in the Tahuamanu REDD+ Project that Terrapass supports in Peru. That project involves partnering with local communities and authorities to prevent deforestation in the Amazon rainforest.
Another example of a carbon reduction project involves capping orphan oil and gas wells, as Terrapass is supporting in Oklahoma with Zefiro Methane, to prevent potent greenhouse gas emissions that would otherwise escape from these sites.
As mentioned, carbon reduction credits can also come from capturing and destroying landfill methane, as Terrapass is supporting with the Gaston County Landfill Gas Destruction Project in North Carolina. In addition to the benefit of avoided emissions by capturing methane, this carbon project also involves producing renewable energy from the gas.
Explore more carbon reduction and carbon removal projects that align with your social and environmental goals. Terrapass offers a broad range of carbon credits that you can use to finance added benefits beyond emissions reductions or removals.
Do Carbon Removal and Carbon Reduction Credits Cost the Same?
Typically, carbon removal credits are more expensive than carbon reduction credits. That is primarily driven by the higher development/operating cost of carbon removal projects. Also, supply and demand affect these prices. Currently, there is high demand for carbon removals but limited supply.
Choosing Between Carbon Removal Credits vs. Carbon Reduction Credits
While cost can be one motivation, companies may be wondering whether they should choose carbon removals or carbon reductions from an operational/sustainability perspective. Both carbon removals and carbon reductions have their place, and arguably both are necessary for addressing climate change.
In a way, they are equivalent in the sense of representing the same amount of CO₂e removed or avoided. However, different greenhouse gas accounting standards may prioritize carbon removals for reaching net-zero goals, given that removals can address the already high concentration of greenhouse gases that are already warming the planet.
Think about it like financial accounting. If a company is over budget, avoiding new spending would be like carbon reductions. That’s important, but it doesn’t get the company out of the hole. You would also need to return past purchases for refunds or find revenue to balance the budget. That’s similar to how carbon removals like DAC return carbon from the atmosphere back into the earth, or how reforestation expands the ability for the planet to absorb existing emissions.
But if the company continues to overspend, that doesn’t solve the problem. There are limits to what can be refunded or how the budget can be expanded, just like there are technological, environmental, and financial limits to carbon removals. Likewise, if you cancel an upcoming order and use those savings to fund another part of the business, that does not get you any closer to balancing the books, just as would happen if you use carbon reductions as license for new emissions elsewhere.
That’s why any type of carbon credit needs to be used alongside emissions reductions within your own organization.
Terrapass is guided by the Oxford Principles for Net Zero Aligned Carbon Offsetting on how to incorporate carbon removals and carbon reductions into a carbon offsetting strategy. The Oxford Principles successfully acknowledges the emergent state of carbon removal generation capacity and prescribes a gradually increasing adoption of carbon removals, supplemented by the use of high-integrity carbon reductions (avoidance) credits in the near term.
In doing so, your organization can prevent the escalation of emissions in the near term while helping the planet get toward a more balanced level of emissions in the future.
You can calculate your business or individual emissions using the Terrapass carbon footprint calculator and then purchase carbon credits to offset the emissions you can not yet reduce. Or, you might even choose to become carbon-negative through a combination of emission reduction strategies and buying carbon credits.
We can even help you create custom carbon offset programs, using your preferred mix of removals and emissions reduction credits to balance out the impact of your products and services. Get in touch with a carbon credit advisor today.
