CO₂ compensation through forest protection projects: How it works and the issues behind it

CO₂ footprint, talk | 8. February 2023
Phillip Blumenthal
Head of Sustainability

CO₂ compensation: What is it and how does it work?

A company can achieve CO₂ compensation by purchasing a CO₂ certificate through an intermediary company. This certificate is created by CO2-saving activities of a project, such as renewable energy generation. The amount of CO2 saved is determined using calculation methods set by a certification company. These calculations are then verified by auditing companies, such as TÜV, and based on this, the CO2 certificates are issued.

The largest certifier on the market is Verra: over 75% of all emissions on the voluntary offset market worldwide are certified by Verra, and 40% of these certificates guarantee CO₂ reduction through forest protection. This does not involve reforestation, but rather ensuring that forests are not cut down.

Problems with CO₂ compensation through forest protection projects

The calculations for CO2 savings are very complex and therefore difficult for many people to understand, which can lead to this issue going undetected for a long time.
CO₂ offsets through forests extend over a longer period of time, but the offset is accounted for immediately – however, forests can be destroyed or altered at any time due to natural or anthropogenic impacts.
CO₂ offsetting should only apply if “additionality” is guaranteed, i.e. it must be proven that the amount of CO₂ emitted would certainly have been emitted without the purchased certificate, but this is difficult to prove.
In this context, an August 2023 study by West et al and Verra Registry found that after analyzing a significant percentage of projects, more than 90% of rainforest CO₂ allowances are likely “phantom credits” and do not represent true carbon reductions.

Last updated: Feburary 12, 2024 EFRAG recently published the draft of the voluntary ESRS (European…

Read more

Appendix C of ESRS1 outlines a series of phase-in provisions which allow companies to delay…

Read more

How process descriptions work in the ESRS (European Sustainability Reporting Standard) In this article, I…

Read more

Last updated: Feburary 12, 2024 EFRAG recently published the draft of the voluntary ESRS (European…

Read more

Appendix C of ESRS1 outlines a series of phase-in provisions which allow companies to delay…

Read more

How process descriptions work in the ESRS (European Sustainability Reporting Standard) In this article, I…

Read more

The term diversity is on everyone’s mind, especially in June, since it is Pride Month.…

Read more
Want to get to know us?
Arrange a meeting
Theresa Zöckler
Your contact person

Newsletter

Stay informed about Code Gaia webinars, product updates, events and more.

Download info package

You are currently viewing a placeholder content from HubSpot. To access the actual content, click the button below. Please note that doing so will share data with third-party providers.

More Information