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What Are Carbon Credits?

UNDERSTANDING CARBON CREDITS

Guest author: Helen Sprakes, Director, Environmental Strategies Limited

Many organisations are now aiming to be carbon-neutral or carbon-negative in response to scientists illustrating that reducing carbon and greenhouse gas emissions is the only way to limit the rise in global temperatures. But what does this mean in practice?

Measure, Reduce, Offset

Firstly, you need to understand and measure how much carbon your activities or products emit into the atmosphere during their production and use (their ‘carbon footprint’). The aim is to then reduce those emissions as far as possible by changing your processes and treatment of waste. Any remaining emissions can then be offset with carbon credits.

For example, if you were emitting 10 tonnes of carbon a year after your reduction efforts, you could purchase 10 carbon credits (1 credit = 1 tonne) to offset those emissions so that you have a ‘neutral’ carbon impact overall. If you were to buy more credits than needed, you would be offsetting a greater amount of carbon than you emit, meaning your organisation or products would become ‘carbon-negative’.

Carbon Credit Projects

Carbon credits are invested into projects that either avoid emitting carbon, for example, a project to replace kerosene cook-stoves with solar stoves, as it avoids emissions that would have taken place if the cook-stoves had not been replaced; or invested into projects that actually remove carbon from the atmosphere i.e. tree planting schemes.

Carbon credits exist to enable responsible organisations to mitigate the harmful carbon produced by their activities, by investing in projects that have a positive impact on the environment (see diagram below). Once purchased therefore, a carbon credit must be ‘retired’, which means removing it from circulation so that no one else can purchase it. This ensures that the money invested in carbon credits goes directly to certified projects, and credits are not double-counted by being sold more than once. 

Image credit: BBC

Why Are Carbon Credits Important?

Carbon credits enable the funding of projects around the world that are improving our environment, and at the same time contributing to year-on-year reductions in carbon emissions – an essential requirement for managing climate change. It also enables organisations to differentiate themselves in the marketplace as being “carbon-neutral” or even “carbon-negative”.

There is always a danger that some organisations will not try to reduce their emissions and simply invest in credits to offset their carbon. This goes against the spirit and aim of carbon credits, which is to reduce emissions yourself first, and invest in credits second.

By achieving a carbon-negative status for their Herb and Dry gins produced in 2020, Cooper King Distillery have gone above and beyond most organisations and clearly demonstrated their commitment to reducing global carbon emissions and contributing to a sustainable future for all.

Read more about Environmental Strategies Limited on their website www.esltd.co.uk.


This blog is part of a series to celebrate becoming England’s first carbon-negative gin and explores some key areas of sustainability. Other blogs in the series: