Analyzing Carbon Removals in the Context of Net-Zero Targets and ISO 14068-1 Compliance

The paper "Demystifying carbon removals in the context of offsetting for sub-global net-zero targets" by Kenneth M?llersten et al. offers a critical exploration of how carbon credits, both for emissions reductions (ERC - Emission Reduction Credits) and carbon removals (CRC - Carbon Removal Credits), can contribute to achieving net-zero emissions. In light of increasing pressure to adopt carbon neutrality, this analysis is vital for understanding the complexity and practicalities of transitioning toward a low-carbon future. This review not only dissects the key insights of the study but also links it with the recently published ISO 14068-1:2023 standard on carbon neutrality, which establishes a structured approach for organizations striving to reduce their carbon footprint. Together, the study and the ISO standard highlight paths for integrating emission reductions and removals into corporate strategies while addressing the practical aspects of implementing such actions.

Key Insights from the Carbon Removals Study

One of the most compelling aspects of M?llersten et al.’s paper is its emphasis on the dual role of ERCs and CRCs in net-zero strategies. While the dominant narrative often positions CRCs as the sole solution for achieving net-zero, the authors argue that ERCs can play a significant role when they are implemented in the right contexts and follow stringent accounting principles. This view supports a more pragmatic approach where both emissions reductions and removals are leveraged together to reach sub-global net-zero targets.

The study also sheds light on the challenge of managing "residual emissions," which are the emissions that remain even after significant mitigation efforts. M?llersten et al. advocate for using a combination of ERCs and CRCs to address these residuals, noting that many emissions are technologically or economically challenging to eliminate. This pragmatic approach aligns closely with the hierarchy outlined in ISO 14068-1, which prioritizes emission reductions and removals before resorting to offsetting residual emissions.

Moreover, the study emphasizes the importance of robust carbon accounting frameworks to avoid issues like double counting or low-quality credits that can undermine climate efforts. This complements ISO 14068-1, which sets strict criteria for carbon credits to ensure they meet transparency, accuracy, and permanence requirements. This level of scrutiny is necessary to maintain the integrity of carbon neutrality claims, particularly as markets for carbon credits expand globally.

Alignment with ISO 14068-1: Structured Carbon Neutrality Management

The ISO 14068-1:2023 standard on carbon neutrality provides a systematic framework for reducing, removing, and offsetting emissions. It builds on earlier standards within the ISO 14060 family and emphasizes the importance of following a structured approach to carbon management. The standard advocates for reducing emissions as the primary goal, enhancing removals within an organization’s value chain, and only then relying on offsetting residual emissions through verified carbon credits.

The alignment between M?llersten et al.’s study and ISO 14068-1 is evident, particularly in the shared emphasis on emissions reductions within a defined boundary and the use of removals only for residual emissions. Both the study and the ISO standard highlight the importance of continual improvement—ISO 14068-1 encourages organizations to set incremental targets over 5 to 10 years, driving consistent reductions over time. By doing so, companies can demonstrate real progress toward carbon neutrality, moving beyond symbolic gestures or marketing claims.

The ISO standard’s principles of transparency (Clause 4.2) and conservativeness (Clause 4.3) are echoed in the study's call for stringent GHG accounting methodologies. The standard and the study emphasize that organizations must quantify and report their emissions accurately, ensuring that their carbon neutrality claims are credible and scientifically sound.

Areas for Improvement

While M?llersten et al.’s study provides valuable insights, it could benefit from further exploration of the economic and social implications of adopting a dual strategy of ERCs and CRCs. This gap is particularly noticeable in developing regions where the financial burden of implementing CRC technologies might be prohibitive. ISO 14068-1 partially addresses this by calling for a “science-based approach” (Clause 4.8), but additional guidance on managing these challenges would enhance both the standard and the study’s applicability to a broader audience.

The ISO standard itself, while comprehensive, may be difficult for smaller organizations to implement fully without extensive resources. More case studies and best practices tailored to small and medium-sized enterprises (SMEs) could make the standard more accessible. Additionally, both the study and the ISO standard could offer more in-depth guidance on how to select high-quality carbon credits, given the diverse and often opaque nature of the carbon markets.

Strategic Recommendations for Businesses

As businesses increasingly seek to align with carbon neutrality frameworks, including ISO 14068-1, several strategic recommendations emerge from the combined insights of M?llersten et al.’s study and the ISO standard:

1. Adopt a Hierarchical Carbon Neutrality Strategy: In line with ISO 14068-1, companies should prioritize emissions reductions within their value chains before investing in CRCs. This approach ensures that offsetting is used only as a last resort, strengthening the integrity of net-zero claims.
2. Utilize ERCs for Short-Term Reductions: M?llersten et al. highlight that ERCs can play a crucial role in meeting interim climate goals. Companies should focus on reducing emissions through energy efficiency, renewable energy adoption, and supply chain improvements in the near term. By 2030, businesses can reduce their dependence on carbon credits, focusing on systemic reductions.
3. Invest in Removal Technologies for Long-Term Residuals: While short-term reductions should rely on ERCs, businesses must begin investing in CRC technologies, such as direct air capture (DAC), reforestation, and soil carbon sequestration, for the emissions that are harder to eliminate. These technologies will become essential for offsetting residual emissions as we approach the 2050 target for net-zero.
4. Ensure High-Quality Carbon Credits: Both the study and ISO 14068-1 stress the importance of using high-quality carbon credits. Companies should engage in carbon crediting programs that are transparent, verifiable, and meet strict additionality and permanence criteria. They should also ensure that credits used for offsetting are retired after use to prevent double counting.
5. Plan for Continual Improvement: ISO 14068-1’s call for continual improvement (Clause 9.2) emphasizes that carbon neutrality is not a one-time achievement but an ongoing process. Businesses should set short-term (5 to 10 years) and long-term (2050) goals for reducing emissions and enhancing removals, reviewing these targets regularly as science evolves.
6. Integrate Carbon Neutrality into Core Business Strategy: ISO 14068-1 requires organizations to integrate their carbon neutrality management plan into their overall governance and business strategy (Clause 9.1). This ensures that emissions reduction becomes a core focus across all departments, from procurement and operations to marketing and finance.

The Role of ISO 14068-1 in Global Climate Goals

ISO 14068-1 provides businesses with a clear roadmap for achieving carbon neutrality while supporting international climate goals such as the Paris Agreement. By offering a standardized approach to carbon accounting and neutrality claims, it helps to harmonize efforts across industries and geographies. The study by M?llersten et al. complements this by demonstrating that businesses can achieve meaningful emissions reductions even in sectors with traditionally high residual emissions, provided they use a balanced approach involving both ERCs and CRCs.

The key takeaway for businesses is that carbon neutrality is achievable if approached systematically and scientifically. As more companies embrace ISO 14068-1 and the principles outlined by M?llersten et al., we will likely see a gradual but significant reduction in global emissions, bringing us closer to net-zero by 2050.

Conclusion

The combined insights from Demystifying carbon removals and ISO 14068-1 underscore the importance of a balanced, strategic approach to carbon neutrality. By integrating both emissions reductions and carbon removals into their business strategies, companies can achieve net-zero in a way that is both practical and scientifically robust. Moreover, by adhering to the principles of transparency, accountability, and continual improvement, businesses can ensure that their carbon neutrality claims are credible and contribute meaningfully to global climate efforts. The path to net-zero is complex, but with the right frameworks in place, it is within reach.

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References:

M?llersten, K., Dufour, M., Ahonen, H.-M., & Spalding-Fecher, R. (2024). Demystifying carbon removals in the context of offsetting for sub-global net-zero targets. Carbon Management, 15(1), 2390840. https://doi.org/10.1080/17583004.2024.2390840

ISO. (2023). ISO 14068-1:2023 Climate change management — Transition to net zero — Part 1: Carbon neutrality. International Organization for Standardization.