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What does climate-neutral and CO2 compensated mean?

The more we deal with climate protection and a new environmental awareness, the more often we encounter terms like "climate neutrality", "climate neutral", "CO2 compensation", "CO2 compensated" or "Net Zero". But what does that actually mean?

Many terms, one goal: avoiding, reducing and offsetting CO2 emissions

The terms "climate neutrality", "climate neutral", "CO2 compensation", "CO2 compensated" and "net zero" have different meanings in different contexts. Uniform definitions can hardly be found. In general, however, these terms are used when products and actions have no negative impact on the concentration of climate-damaging gases in the earth's atmosphere, e.g. by offsetting CO2 emissions.

The decisive factor for the accumulation of terms is the so-called "Green Deal" of the European Commission. In this deal, the European Union sets itself the goal of curbing global warming and emitting only unavoidable greenhouse gas emissions by 2050. In addition, these few emissions are to be completely offset. Many companies are already using renewable energies, sustainable raw materials and other measures to reduce or avoid greenhouse gases. There are also more and more companies that rely on voluntary offsetting for a greener future.

How can you offset greenhouse gases?

In order to offset CO2 emissions, a carbon footprint must be established. This records the amount of CO2 that a company emits. The distinction between products and their carbon footprint (Product Carbon Footprint = PCF) and corporate activities and the resulting footprint (Corporate Carbon Footprint = CCF) is particularly relevant. The PCF is calculated from all parameters that potentially cause emissions, such as the production, transport, marketing and disposal of a product. The CCF includes all data that are relevant for the calculation of a company's emissions. On the one hand, this includes direct emissions. These include, for example, the heating of the building, the operation of the vehicle fleet and the use of refrigerants. On the other hand, there are the indirect emissions, which include, for example, business trips, the volume of waste and the associated disposal. Direct and indirect emissions added together result in the complete corporate carbon footprint.

Certain measures can be taken to compensate for emissions that occur at the product or company level. There are measures to bind CO2, such as reforestation projects. But also through the protection of peatlands and the watering down of already drained peatlands, their CO2 storage capacity can be preserved or restored. Compensation can also be realised in the form of investments in climate-friendly energy production, e.g. by investing in hydroelectric or wind power plants. It is irrelevant for the success of an offset where the project is realised. There are corresponding projects both in Germany and internationally. However, you should make sure that the climate protection projects meet certain standards; often you will receive a corresponding certificate, e.g. from Gold Standard. Projects of this organisation were developed in such a way that they combine social, ecological and economic dimensions of sustainability and thus make a comprehensive contribution to the environment and climate. With the help of offsets, products and companies whose existence cannot do without emitting CO2 can also improve their ecological footprint.

What criticism is there of the wording and the process of compensation?

In the context of the terms mentioned above, there have been discussions and misunderstandings again and again in the past. Awards as "climate-neutral company" or "climate-neutral product" can give the impression that no greenhouse gases are produced. But climate neutrality does not mean CO2-free. Even the designation CO2-compensated does not indicate what percentage of CO2 emissions are offset and whether PCF and CCF have been taken into account equally. Companies should therefore define their CO2 offsetting more precisely. You can read about our measures for offsetting greenhouse gases here.

It is also important to bear in mind that CO2 offsets are mainly functional in theory, but there can be practical problems. For example, since offsetting measures are often outsourced to developing countries, problems can arise when calculating the savings. Let us think, for example, of a reforestation measure in a developing country that is financed by a European company. The European company, for its part, will take credit for the offsets from this project. Now it may happen that the developing country in question also claims the CO2 compensation that has arisen, and therefore climate protection measures may be neglected elsewhere. This leads to double counting for offsets and the result is rather disadvantageous for climate protection. Moreover, in the case of offsets, it is often difficult to determine whether the achieved reduction would not have happened anyway.

These problems must of course be taken into account, and so we too regularly review our offsetting processes. CO2 offsetting should not be a means to rest or to stop worrying about emissions - on the contrary. It is just a way to neutralise the impact we have on the environment through our actions and products. We should all constantly work to reduce our overall emissions and also try to reduce CO2 emissions from our products, for example through sustainable raw materials and shorter supply chains.