Carbon Markets & Offsetting

For companies to succeed on their journey to net-zero, they must take steps to reduce their greenhouse gas (GHG) emissions, becoming carbon neutral.

To achieve this, they need to: 

  1. identify their current emissions, both direct and indirect
  2. invest in internal projects to reduce them
  3. invest in external projects that offset the remaining emissions they cannot eliminate. This is carbon offsetting.

Carbon Markets are a mechanism for offsetting. 

Direct and Indirect Carbon Emissions

The GHG Protocol defines direct and indirect emissions as follows:

Direct carbon emissions that are created by an individual; they are controllable and connect a person to their influence on the environment.

Indirect emissions are those related to an individual, i.e. the carbon produced by the country the person lives in.

They further categorize direct and indirect emissions into three broad scopes:

  • Scope 1: All direct GHG emissions.
  • Scope 2: Indirect GHG emissions from consumption of purchased electricity, heat or steam.
  • Scope 3: Other indirect emissions, such as the extraction and production of purchased materials and fuels, transport-related activities in vehicles not owned or controlled by the reporting entity, electricity-related activities (e.g. T&D losses) not covered in Scope 2, outsourced activities, waste disposal, etc

What is the Carbon Market?

Carbon markets aim to reduce greenhouse gas (GHG, or ‘carbon’) emissions cost-effectively by setting limits on emissions and enabling the trading of emission units, which are instruments representing emission reductions.

Carbon Markets exist under both compliance (mandatory) systems and as voluntary programmes.

Compliance markets are created and regulated by mandatory national, regional or international carbon reduction regimes such as the Emissions Trading Systems (ETSs).

Voluntary offset markets function outside of the compliance markets and enable companies and individuals to purchase carbon offsets on a voluntary basis. 

At NetZero we focus on supporting decarbonization efforts in the Middle East, our primary focus therefore on Middle Eastern carbon reduction projects that co-benefit communities within the region.  

As MENA does not have a fully-fledged ETS yet, we can offer:

  1. carbon credits emanating from the region’s voluntary carbon market (VERs)
  2. advisory support for companies looking to purchase certified emissions reductions (CERs) on the Global Carbon Market.

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