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Climate Terminology – A Guide Through the Jungle of Concepts

  • Climate Neutrality can be reached by reducing greenhouse gas (GHG) emissions as much as possible, and compensating the remaining emissions through carbon avoidance 
  • Net Zero goes a step further: it is achieved through neutralizing the amount of unavoidable GHG released through carbon removal and insetting
  • Zero Emissions means truly no emissions – avoiding all GHG emissions to the point of zero in the first place
  • Eventually, what matters most is the actual impact of the steps you are taking

People are becoming increasingly aware of the environmental impact of their lifestyles. This not only translates into a demand for transparency regarding the products and services they buy, but also the expectation towards companies to consider sustainability as a core factor in the decisions they take. And this consumer demand for transparency and sustainability puts pressure on businesses and governments to set sustainability targets – and to follow through on them. 

 

The first ever legally binding treaty on a global scale to combat climate change was the Paris Agreement. Signed by 196 parties, governments pledged their efforts to limit global warming to 1.5°C, compared to pre-industrial levels. It states that one major goal on the journey of achieving this is Climate Neutrality by mid century. In reality though, at least 90% of emissions need to be reduced to Net Zero to limit global warming. Many countries have therefore already set individual goals to reach Net Zero Emissions by 2050. The UK government for example set a target of reaching 50% below 1990 levels by 2027 the latest, requiring a reduction of 61% of total emissions from 2005 to 2030. At the world leader summit in November 2021, 30 nations agreed on combining efforts to make Zero Emission vehicles the norm by 2030. 

 

Still, barely any of the national targets are ambitious enough to keep global warming below 1.5°C. However, it is not only the responsibility of governments to set climate targets and follow through on them but also of companies. Initiatives like the Science Based Targets can support companies here to contribute their part in minimizing emissions. By highlighting the amount of emission reductions a company needs to realize within a given time-frame, the initiative demonstrates what needs to happen in order to achieve the goals of the Paris Agreement. 

 

But what is actually the difference between all these terms? Climate Neutrality, Net Zero, and Zero Emissions all erroneously sound like very similar concepts. Being able to clearly differentiate between them is crucial to understand which actions truly contribute towards limiting global warming. 

What is Climate Neutrality?

Climate Neutrality can be reached through the reduction of greenhouse gas emissions as much as possible, and compensation of the remaining emissions through carbon avoidance. Both an individual or an organization can be Climate Neutral. However, it is important to note that there is still a difference between the Climate Neutrality a company can claim through mechanisms like offsetting, and being truly Climate Neutral. The latter requires actually zero impact on the climate. A term often incorrectly used as a synonym for Climate Neutrality is Carbon Neutrality. While the concept works in a similar way, Carbon Neutrality is only concerned with carbon emissions, opposed to Climate Neutrality incorporating all greenhouse gas emissions, including gases like ozone or methane. 

 

To get a better understanding of where emissions are coming from, it is helpful to organize them. Within companies, emissions are generally grouped into three categories. Scope 1 emissions include those that are emitted due to the direct operations within the company’s control. Scope 2 covers all emissions stemming from a company’s electricity usage, heating, and cooling controlled by third parties. Emissions in scope 3 usually make up most of a company’s emissions. It covers all emissions upstream and downstream the supply chain, reaching as far as for example emissions due to business travel, the transport of raw materials, and the usage of the sold product by the consumer. In the food industry, 77% of all emissions fall within the third scope, for fast moving consumer goods even 90%. 

From Theory to Practice

To reach Climate Neutrality, the first step is to reduce emissions as much as possible. Switching to renewable energy, replacing air travel by rail, and shifting to a plant-based diet in the office are easy ways in which companies try to reduce their emissions. Further steps are optimizing the material and process efficiency, thereby lowering the amount of waste and reducing the power consumption. Other possible emission reduction measures are fuel  switches or even updating engines to more sustainable options.

 

Only greenhouse gas emissions that are unavoidable, for example due to availability constraints, or that have already been caused in the past can be compensated through offsetting. Offsetting describes the process of saving the emissions that could not be reduced elsewhere. To save emissions elsewhere, climate action projects around the world, which evidently reduce, avoid, or capture greenhouse gasses in the atmosphere, are financially supported. For example, forest conservation projects help vulnerable wildlife populations, thereby supporting biodiversity, and the sustainable development of local communities. Overall, the majority of offsetting projects are located in the global south, as more financial support is needed here to reach climate targets, and financial aid has a higher impact per US-Dollar. Verification through certification like the Gold Standard or the Verified Carbon Standard guarantees high quality in the offsetting projects and the avoidance of double counting. It is important to note though, that in the case of becoming Climate Neutral through emissions avoidance offsetting, the organization or individual is still a net emitter. 

So What’s the Difference to Net Zero?

To achieve Net Zero Emissions, the amount of greenhouse gas emissions produced by one’s activities needs to equate the amount of emissions removed. These emissions are sometimes also referred to as negative emissions. Similar to achieving Climate Neutrality, the first step to reaching Net Zero Emissions is to cut all greenhouse gas emissions to as close to zero as possible. Instead of then avoiding all emissions that cannot be reduced elsewhere, emissions are being captured and stored away for decades or even centuries. Emissions can also be reduced via insetting – the active reduction of emissions within a company’s own supply chain. Net Zero Emissions, however, more often is considered on a global scale, since emissions produced and removed need to be balanced globally to limit global warming. About 20 countries have set Net Zero Emissions targets so far. Bhutan already surpassed Net Zero and became the first carbon negative country in the world. 

How to Realize Net Zero Emissions

Afforestation and reforestation are examples of nature-based carbon removal projects. By planting trees and creating forests, carbon is captured from the air and stored within the trees for as long as they are standing. In reforestation, previously destroyed forests are recreated, whereas in afforestation, entirely new forests are created. However, either is not as simple as just putting a seed into the ground. The positive effects stemming from the removal of carbon can be canceled out due to the negative effects on biodiversity if afforestation is approached incorrectly. A high diversity in local species and the usage of lands without the need for intensive fertilization are ideal. Furthermore, afforestation and reforestation efforts should be approached long term. Projects therefore need to establish mechanisms to combat threats like wildfire and illegal deforestation. A total of 253 billion tons of CO2 could be recaptured between 2018-2100 through re- and afforestation. This equates seven years worth of global CO2 emissions, if kept at current levels. Though, to capture this amount of CO2, 500 million hectares of land – more than half of Canada – would be necessary, creating a conflict of space with wildlife and food production. 

 

A second effort to remove carbon from the atmosphere is direct air capture and storage, or short, DACS. Here, the CO2 is directly extracted from the atmosphere and then either used for food production, to create synthetic fuel, or permanently stored in geological foundations. However, these technologies are not yet developed enough to build large-scale direct air capture plants. Nevertheless, benefits such as limited land and water use, as well as the possibility to locate them on non-arable land make DACS a promising technology. 

 

Via insetting one also removes greenhouse gases from the atmosphere, but through one’s own supply chain. Thereby scope 3 emissions can significantly be reduced, which for a lot of companies account for the majority of their emissions. This does not only have a positive impact on the environment, but can also provide a competitive advantage for companies as they build strong relationships with suppliers through joint investments in long-term projects. An example for insetting in the transport sector are biofuels. However, depending on the type of biofuel, the environmental impact can differ significantly. 1st generation biofuels are produced from crops, and therefore only emit the CO2 that they had previously absorbed in the photosynthesis. Nevertheless, the production can be very emission heavy, resulting in a comparatively smaller emission reduction. If produced at larger scale, the land they require also competes with other usages of land, such as the production of food. 2nd and 3rd generation biofuels are generated sustainably from waste streams from other industries. The oil that is being turned into fuel has therefore already served its purpose, and the emissions are therefore not counted again. An additional benefit is that biofuels do not impact air quality as much. They burn cleaner, thereby emitting less greenhouse gases and particles into the atmosphere, compared to fossil fuels. 

How to Not Affect the Climate – Zero Emissions

Ultimately, only if truly no greenhouse gases are being emitted into the atmosphere due to human activities, the goal of Zero Emissions is reached. It is important to differentiate here between emissions that are released into the atmosphere, e.g. as part of the natural carbon cycle, and those that are emitted due to human activities. The carbon cycle describes the natural process of carbon atoms moving between being stored on the earth and being released into the atmosphere. On earth, carbon is mainly stored in rocks, plants, and the ocean. It is released back into the atmosphere through processes like the eruption of volcanoes and wildfires. Starting with industrialization, humans then started to significantly interrupt this natural process, mainly through the burning of fossil fuels. Over time, this significantly increased the amount of carbon-based emissions that are emitted into the atmosphere, while the ones that were being captured remained the same. This imbalance now needs to be reversed, in order to reach Zero Emissions.

 

Unfortunately, there are still a lot of technological constraints preventing all human processes from being converted to Zero Emissions, especially on a global scale. But, in order to truly achieve the goals of the Paris Agreement, no interference should take place with cycles like the carbon cycle. That means that Zero Emissions from human activities can and should be the end- goal.

Emissions concept at a glance
The different concepts at a glance.

What are Science Based Targets?

The goal of Climate Neutrality is a good first step, but the real impact depends on whether this is reached through emission avoidance, emission removal, or emission reduction. One way through which companies can realize their reduction needs is by committing to science based targets, or short SBT. The Science Based Target initiative, SBTi, demonstrates by what factor and in which timeframe a company needs to at least reduce their emissions in order to limit global warming to 1.5°C. In order to truly maximize the impact, offsetting through emissions avoidance instead of emissions removal cannot be counted towards the targets. Split up into scope 1, 2, and 3, as well as combinations thereof, targets are set based on the activities and emissions of the individual company. Over 2,700 companies have already committed, with over 1,200 having their targets approved by the initiative.

 

An extensive list of criteria and guidance material is available on the SBTi’s website. In order to make the targets linked to the impact of the activities of a specific company, the initiative is developing sector-specific tools. While the requirements for sectors such as apparel and footwear, financial institutions, and power are already developed and ready to use, the ones for sectors like building, oil and gas, and transport are still being finalized. Updates in the transport sector are expected in the second quarter of 2022. It is therefore important that companies in these industries, just like us at Forto, keep a close eye on the development, so that they can commit to the science based targets as soon as possible. 

Let’s Make a Difference Together!

How far do your current efforts reach to combat the climate crisis? Because in the end, no matter what it is called, the actual impact is what matters most. We at Forto are therefore dedicated to continuously revise our efforts and targets, question the status quo, and – together with our customers and partners – strive to create the biggest positive impact possible. We believe that together we can revolutionize the logistics industry by moving towards a Net Zero future in transportation. Check out the steps we are taking to actively reduce our own and our customers’ emissions, or contact [email protected] to find out how you can make your transport more sustainable.

Nina