What’s the difference between net-zero and carbon neutral? 

Although the terms “net-zero” and “carbon neutral” both refer to the balance of emitted GHGs with avoided or removed emissions, the distinguishing factor between the two claims hinges on compensated emissions (aka offsets). A business can claim carbon neutrality by measuring its emissions and then offsetting the balance through financed projects outside of its value chain, without actually reducing its own emissions. Net-zero, on the other hand, does not permit financed emissions, which compels companies to more meaningfully reduce value chain emissions. Although similar in theory to carbon neutrality, net-zero emissions refers to all greenhouse gas emissions, not just carbon. But the distinction goes further. Net-zero was formally defined in late 2021 by the Science Based Targets initiative’s Corporate Net-Zero Standard, to specifically state that compensation is not allowed under the new standard. In short, carbon neutrality means that you can compensate for your emissions (again, typically with offsets), while net-zero requires abatement of your emissions—you have to actually get rid of them through efficiency, electrification, renewables, and other means. 

And then, of course, there is “zero emissions,” which is essentially a pipedream, because it’s an absolute elimination of all emissions from your operation. This ambitious goal does not allow for any financed removal and requires technology that has yet to exist at scale.