Reporting ESG

Net-zero, carbon-neutral & co: The emissions dictionary

Feb. 1, 2023

In December 2019, the EU climate targets were adopted as part of the European Green Deal. EU leaders adopted the goal of creating a climate-neutral EU by 2050, making it the first greenhouse gas-neutral continent. To achieve this objective, the transition to net-zero emissions must be fully complete by then. In 2020, the EU also agreed to reduce its net greenhouse gas (GHG) emissions by at least 55% compared to 1990 levels by 2030. And the EU's emissions-based targets are clearly needed. According to the UN, the EU is among the top seven emitters of greenhouse gases worldwide, which together accounted for about half of global GHG emissions in 2020.

However, the issue of climate change is becoming ever-increasingly important not only in politics but also in businesses and all other areas of society. This is why the words net-zero, carbon-neutral, or climate-positive appear more and more frequently in our vocabulary and conversations.

But what do the individual terms and buzzwords mean and what are their differences? Find out in our emissions dictionary.

Wordcloud GHG emissions buzzwords

The emission terms you should know

GHG emissions: Greenhouse gas (GHG) emissions are gases that trap heat in the atmosphere and therefore contribute to global warming. Greenhouse gases include carbon dioxide (CO2), methane (CH4) and nitrous oxide (N2O), among others. In a company context, GHG emissions are divided into three scopes according to the GHG protocol. Learn more about Scope 1, 2 and 3 GHG emissions in our Insight Article.

CO2 emissions: Carbon dioxide (CO2) emissions are the most commonly produced type of greenhouse gas emissions worldwide. Carbon dioxide (CO2) emissions are almost exclusively caused by combustion processes (approximately 95%).

Net GHG emissions: Net greenhouse gas (GHG) emissions refer to gross GHG emissions (which include all emissions from industrial processes, such as the burning of fossil fuels) minus GHG absorption (e.g. through carbon sinks from forestry and agricultural operations).

Carbon footprint: The carbon footprint – or CO2 footprint – determines the total amount of carbon emissions generated by an entity, such as a country, region, company, product and service, or private household. The carbon footprint is usually quantified in metric tons of CO2 equivalents over a fixed period of time.

CO2 footprint: see “carbon footprint”

Net-zero: Net-zero implies that the amount of greenhouse gases (GHGs) emitted by human activities is equal to the amount removed from the atmosphere. Net-zero, therefore, means that as much GHGs are taken out of the atmosphere as are produced. In order to achieve net-zero emissions, all worldwide greenhouse gas emissions will have to be counterbalanced by sequestration. The net-zero approach also includes Scope 3 emissions in the calculations.

Net-zero emissions: Net-zero emissions are present when the total amount of all greenhouse gases (GHGs) emitted by human activities is equal to the amount removed from the atmosphere. Net-zero emissions imply climate neutrality.

Net-zero carbon emissions: Net-zero carbon emissions are present when the total amount of CO2 emitted by human activities is equal to the amount removed from the atmosphere. Net-zero carbon emissions imply carbon neutrality.

Carbon-neutral: Carbon-neutral implies that the amount of carbon dioxide (CO2) emitted by human activities is equal to the amount removed from the atmosphere. Thus, carbon neutrality means establishing a balance between emitting carbon and absorbing carbon from the atmosphere in carbon sinks. Carbon neutrality thus exists when a carbon footprint has been calculated, reduced, and offset. Thus, carbon neutrality is the consequence of net-zero carbon emissions.

Carbon-positive: Carbon-positive means that companies emit more CO2 emissions than they take out of the atmosphere. This state still applies to the great majority of all companies today. However, "carbon-positive" is a possibly misleading term, as it does not imply a positive effect with regard to climate and global warming but the opposite.

Carbon-negative: Carbon-negative goes one step further than carbon-neutral by emitting less CO2 than is absorbed. This reduces the absolute amount of CO2 in the atmosphere.

Climate-neutral: Climate-neutral is a similar term to carbon-neutral. However, climate-neutral goes one step beyond by including the elimination of other harmful gases beyond carbon dioxide (CO2), including, e.g., methane (CH4) and nitrous oxide (N2O). The term ensures that all greenhouse gases are considered. These are referred to as CO2 equivalents. Greenhouse gases are thus standardized to one measure and can be compared. Thus, climate neutrality is the consequence of net-zero emissions.

Climate-positive: Climate-positive goes one step further than climate-neutral by emitting fewer greenhouse gases than are absorbed. This reduces the absolute amount of greenhouse gases in the atmosphere.

Climate-negative: does not exist 🙂

Carbon sequestration: Carbon sequestration is one method of reducing the amount of carbon dioxide in the atmosphere by capturing and removing CO2 from the atmosphere and storing it.

Carbon sinks: Carbon sinks are systems that absorb more carbon than they emit. Soil, forests, and oceans are the primary natural carbon sinks. Natural sinks are assumed to remove between 9.5 and 11 Gt of CO2 annually. In 2020, annual CO2 emissions were 36.0 Gt. In order to combat global warming, there are currently no artificial carbon sinks that can remove carbon from the atmosphere on a large enough scale.

Carbon credit: A carbon credit is a tradable certificate that represents the reduction or avoidance of one ton of CO2. It is permanently retired after being purchased by a company or person so it cannot be utilized again. Each ton of emissions avoided or reduced during the construction of climate projects results in the creation of a tradable CO2 credit.

Carbon offsetting: Carbon offsetting – also referred to as carbon compensation – is the practice of compensating for CO2 emissions that are generated in other locations. This is done by investing in projects that are directed at either (1) preventing CO2 emissions, e.g., by investing in renewable energy sources or energy efficiency or (2) reducing CO2 emissions, e.g., through reforestation or land restoration, which means investing in the health of carbon sinks. The EU’s emissions trading system (ETS) is an example of a carbon offsetting system.

Carbon compensation: see “carbon offsetting”

Emission Management Visual Guide

What is the difference between net-zero and carbon-neutral?

The terms "carbon-neutral" and "net-zero" are often used in the same context or even interchangeably. Therefore, let us distinguish them from each other in more detail.

In fact, they are two similar concepts. The two terms have in common that they mean the balance of emissions produced and absorbed. Emissions that are produced need to be equivalent to those captured from the atmosphere. However, they differ in terms of the scope of emissions considered. While carbon-neutral refers only to carbon dioxide (CO2) emissions, net zero includes all greenhouse gases emitted into the atmosphere. Therefore, net-zero is expanded in scale. And consequently, global net-zero emissions will not be reached until humanity no longer has any influence on global warming through emissions from industrial activities etc.

GHG emissions dictionary

The listing shows that it can be difficult to navigate through all the different terms and phrases related to emissions. Nevertheless, the exact distinction between the individual terms is important. It is the only way to ensure that there is a common understanding of the reduction of emissions. And only with a consistent approach and a common goal the challenge of global warming can be addressed efficiently and effectively.

Need support keeping track of your emissions management and reporting? Our ESG software and experts are here to help you throughout your entire sustainability reporting journey. Contact us today and request your free demo.

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