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What Does It Mean To Be Carbon Neutral?

Updated: Nov 15, 2023

what does it mean to be carbon neutral

As extreme weather becomes more widespread, including wildfires, floods, heat waves, and droughts, concern about climate change is increasing across the globe. As a result, many governments, companies, organizations, and individuals are working to reduce and offset their greenhouse gas emissions to mitigate the climate crisis.

Nearly 40% of Fortune 500 companies now have net-zero carbon emissions targets, but the details, such as the timelines, vary widely. For example, Apple pledges to be carbon-neutral for its supply chain and products by 2030, while Amazon and General Motors have 2040 targets. There are many steps that individuals, corporations, and nations can take to reduce their carbon emissions, such as the use of electric or plugin-hybrid electric vehicles and renewable energy. In addition, the Climate Bill provides tax credits and other incentives to use clean energy.

But many people need clarification on the terminology regarding carbon neutrality, greenhouse gas emissions, and carbon capture, and it is a helpful topic for clean energy professionals to understand. As clients seek ways to reduce fossil fuel consumption, there is an increased demand for EV charging infrastructure and solar power systems. Understanding the various terms related to being carbon neutral and the top strategies for achieving this can help EV and renewable energy professionals distinguish themselves as clean energy experts.

What Is Carbon Neutrality?

Many human activities emit carbon, such as traveling, producing goods, and consuming energy. In fact, 85% of human-produced carbon emissions come from burning fossil fuels, such as coal, oil, and natural gas. Thus, many human activities use fossil fuels, such as heating and cooling buildings, manufacturing products, transporting materials, cultivating crops, and mining minerals.

However, there are also carbon sinks around the world - places that naturally absorb more carbon dioxide from the atmosphere than they emit. These areas can be carbon negative. Forests, oceans, and soils are all carbon sinks that remove and capture atmospheric carbon. Climate experts estimate that natural sinks remove between 9.5 and 11 gigatonnes of carbon dioxide each year. However, annual global carbon emissions were 37.8 gigatonnes in 2021.

Carbon neutrality is the point at which carbon emitted and carbon absorbed are in balance. To reduce atmospheric carbon dioxide, some companies and researchers are working on carbon sequestration projects that capture and store atmospheric carbon. For example, the U.S. Geologic Service is assessing two primary forms of carbon sequestration: biologic and geologic.

Achieving carbon neutrality requires finding a balance between emitting carbon and absorbing it into carbon sinks. Most companies working towards carbon neutrality goals measure their carbon footprints, implement emission reductions whenever possible, and offset the remaining emissions.

What Are Scope 1, 2 And 3 Carbon Emissions?

The Greenhouse Gas Protocol divides corporate carbon emissions into three scopes for different sources. Scope 1 emissions are from company facilities and vehicles, and Scope 2 emissions are indirect emissions from the production of purchased energy. Finally, Scope 3 emissions are indirect emissions that include employee commutes, business travel, purchased goods and services, and much more. Scope 3 emissions involve many activities upstream with suppliers and downstream with customers and can be the hardest to calculate.

What’s The Difference Between Carbon Neutral And Net Zero?

Carbon-neutral and net-zero are both terms that relate to climate action to mitigate global warming, but they have distinct meanings.

  • Carbon neutrality often refers to just Scope 1 and 2 emissions, but not necessarily Scope 3, and may refer only to a specific product or service. In addition, carbon neutrality often refers only to carbon dioxide emissions and not other greenhouse gases, such as methane and nitrous oxide.

  • Net zero goals are similar to carbon-neutral but have a larger scale. They encompass scope 1, 2, and 3 emissions and include the entire organization, not just a specific product or service. Also, net-zero refers to multiple greenhouse gases and not exclusively carbon emissions.

Carbon Neutral Vs. Climate Neutral

Another common term related to sustainability and CO2 emission is climate neutral. It is similar to carbon neutrality but includes all greenhouse gas emissions, not just carbon dioxide. “Climate neutrality means living in a way that produces no net greenhouse gas (GHG) emissions,” according to the United Nations. Like carbon neutrality, climate-neutral goals often involve increased energy efficiency and using cleaner energy sources.

How Do Companies Become Carbon Neutral?

Achieving carbon neutrality involves first measuring Scope 1 and 2 and ideally Scope 3 carbon emissions. Because the vast majority of carbon emissions come from burning fossil fuels, it is critical to develop a strategy to reduce the direct and indirect use of fossil fuels. Improved energy efficiency and switching to renewable energy are excellent ways to achieve this.

Some energy efficiency actions companies are taking is to use ocean freight instead of air freight for transporting goods over long distances. Others are building energy-saving buildings and using materials with little embodied carbon.

What Are Carbon Offsets?

Carbon offsets, also known as carbon credits, fund projects that reduce, avoid, or remove atmospheric carbon or equivalent greenhouse gases and help mitigate climate change. Carbon offsetting projects are verified activities that promote environmental conservation, energy efficiency, and renewable energy production.

Common approaches include reforestation initiatives, constructing wind energy or solar farms, and carbon-storing agricultural practices. Carbon offsets help organizations reduce their carbon footprint via a financial contribution. Owners of carbon offset projects can sell carbon credits to those organizations. Therefore, carbon offsets can create a funding mechanism for carbon removal projects that might not otherwise be executed.

However, there are also some potential concerns related to carbon offsets. One challenge is that they must be able to verify that they benefit the environment and produce value. Another concern is that companies can just pay money to buy carbon credits instead of working towards reducing their own carbon emissions and environmental impact. Thus, this could result in greenwashing, where businesses still emit a large amount of carbon yet can claim they are carbon neutral.

EVs And Carbon Emissions

As the world transitions to clean energy sources, electrifying transportation can help organizations reach net zero emissions or carbon neutrality by minimizing the use of fossil fuels. In particular, electrifying vehicle fleets helps reduce Scope 1 carbon emissions because EVs conserve oil and do not emit greenhouse gases.

However, companies must account for the electricity production used to power EVs in their Scope 2 emissions, so EVs and renewable energy are an excellent combination. Likewise, when employees drive EVs, they can help reduce Scope 3 carbon emissions from commuting. Therefore, encouraging employees to commute with EVs can help achieve net-zero emissions goals. In addition, when corporations in a supply chain use EVs powered by renewable energy, they help reduce upstream Scope 3 emissions related to transportation and distribution.

As companies transition from fleets with internal combustion engines to EVs to mitigate emissions and protect the environment, an adequate charging infrastructure is critical. EV charging station installers help companies charge EV fleets and employee vehicles. However, obtaining engineering wet stamps and the required permit drawings can be challenging, especially if EV professionals lack the time, qualifications, or skills to complete these in-house.


Carbon neutrality is the idea that organizations can achieve a balance between the CO2 the produce and the amount they or other organizations are able to remediate or recapture. It’s an important piece to the climate change puzzle, and a great thing for solar and EV professionals to know about.

GreenLancerEV is accelerating the adoption of EVs and works with EV charging installers. We help EV professionals promote a carbon-neutral future with our EV permit design and engineering services. Partner with GreenLancerEV for your next project.


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