March 4, 2024

Carbon Neutral vs. Net Zero: What’s the Difference?

Carbon Neutral vs. Net Zero: What’s the Difference?

Net zero refers to the target of negating greenhouse gas emissions based on human activity until elimination by abating emissions and only offsetting if they can't be avoided for the time being vs. carbon neutral which is the state of reaching net zero emissions through reductions and offsetting.

If you want to know the difference between some of the carbon neutral vs. net zero, then this article is for you. We'll teach you a few basic terms and provide some useful resources.

What is net zero?

To achieve net zero, an entity, such as a country, company, or individual, aims to reduce its greenhouse gas emissions as much as possible through various measures like transitioning to renewable energy sources, improving energy efficiency, and adopting sustainable practices. Any remaining emissions that cannot be eliminated are then offset by activities that remove an equivalent amount of greenhouse gases from the atmosphere, such as reforestation or investments in carbon capture technologies.

What is carbon neutral?

Carbon neutrality, also known as being carbon neutral or having a net zero carbon footprint, refers to the state in which an individual, organization, or entity offsets or balances the total amount of greenhouse gas emissions it produces by either reducing its emissions or investing in projects that remove or reduce an equivalent amount of greenhouse gases from the atmosphere. The goal is to achieve a balance between emissions produced and emissions removed, resulting in no net increase in the overall concentration of greenhouse gases.

What is the difference between net zero and carbon neutral?

The main difference is that net zero refers to the goal of eliminating GHG emissions, while carbon neutrality is the end-state achieved by reducing emissions and offsetting the residuals. Achieving carbon neutrality means that organisations take action to reduce their climate impact and invest in emissions-reducing projects. Ultimately, climate neutrality is the goal of both net zero and carbon neutrality. By understanding the difference between these two terms, we can continue to reduce our climate impact and move towards climate neutrality.

CO2 neutral product stamp

Carbon neutral and net zero standards and regulations

Some common standards and regulations are below. There are unlimited resources out there and these are just a few:

  • PAS 2060 is internationally recognised for carbon neutrality.
  • The Science-Based Targets Initiative is a practical resource on net zero target setting.
  • The GHG Protocol is the ultimate guide to handling your carbon accounting but Net0 can handle all of the calculating, measuring, offsetting, categorising, reporting, and certifying for you in one software system as long as you provide the data. Net zero strategies include all types of greenhouse gases and they are all accounted for in the calculations of Net0's platform. Net0 complies with all GHGP standards and localised regulations so you don't have to study the whole GHGP to get to net zero.
  • Regional reporting directives have been put in place 2024 and are having companies phased-in through 2029. These include but aren't limited to the Corporate Sustainability Reporting Directive (CSRD), Streamllined Energy and Carbon Reporting (SECR) in the UK has been in effect since 2019, and the SEC Climate Disclosure is to be finalized in the USA in 2024.

Other related climate definitions to know

  • Climate positive means that activity goes beyond achieving net-zero carbon emissions to create an environmental benefit by removing additional carbon from the atmosphere.
  • Climate neutral means having a net zero carbon footprint. Achieving climate neutrality can be done through a combination of offsets, carbon credits, and reducing GHG emissions.
  • Climate resiliency is the ability to prepare for and respond to the effects of climate change. It includes both mitigation (reducing emissions) and adaptation (building resilience to current changes)
  • Net-Zero carbon emissions mean that an activity releases net-zero carbon emissions into the atmosphere.
  • Net-Zero emissions balance the whole amount of greenhouse gas released and the amount removed from the atmosphere.

Carbon-negative vs. carbon-positive

  • Carbon-negative is a process, activity, or entity that removes more carbon dioxide from the atmosphere than it releases.
  • Carbon-positive refers to a situation where more carbon dioxide is released into the atmosphere than is being absorbed or sequestered. It contributes to the overall increase in atmospheric carbon dioxide levels.

Achieving carbon neutrality means that the overall carbon emissions are balanced by an equivalent amount of carbon removal or offsetting. Carbon negativity goes a step further by actively removing more carbon dioxide than is emitted, contributing to a net reduction in atmospheric carbon.

No matter which approach an organisation takes, the goal is to reduce emissions and move towards climate neutrality. The key is to understand the different definitions and how they apply to climate-related efforts. By understanding the difference between net zero, carbon neutral and other related terms, organisations can properly assess their climate impact and work towards a more sustainable future.

The path to climate neutrality involves a variety of steps, such as assessing the current emissions, finding ways to reduce them, and using offsets or carbon credits to balance any remaining emissions. By investing in projects that reduce emissions, organisations can continue to move towards a climate-neutral future. Companies should also consider investing in carbon-negative or carbon-positive projects, which go beyond net zero to make an even greater impact on the environment.

Recommended content

To learn more about regulations and keeping your emissions down, check out other free resources from our library:

• Article: What is Net Zero?
• Article:  What Is a Carbon Offset and Why Do Companies Need It to Achieve Net Zero Carbon Emissions?
• Article:
What Are Scope 1, 2, and 3 Emissions?
• Article:
Carbon Credits: Everything You Need to Know
• Article:
What Is Corporate Sustainability and How to Achieve It

How do we achieve carbon neutrality by 2050?

To reach carbon neutrality by 2050, we need to drastically reduce our emissions over the next three decades. This is achievable with a combination of technological innovation, policy changes, and behavioral shifts.  

Technological solutions such as renewable energy systems, improved insulation for buildings, and electric vehicles can all make a significant contribution in reducing our emissions. Governments must also implement policy changes such as carbon pricing and subsidies for renewable energy, while businesses must reduce their own emissions and work towards carbon-neutral operations.

Finally, individuals must start to become more aware of the effects of their actions on the environment. Simple actions like using less energy in our homes and buying sustainable products can have a major impact on reducing emissions and helping us reach our 2050 goal. Ultimately, achieving carbon neutrality by 2050 requires a collective effort from individuals, businesses and governments. Together, we can make the transition to a cleaner, more sustainable future.

Carbon offsetting projects

Businesses can offset their emissions through carbon offsetting projects. These involve activities such as reforestation, improving agricultural practices and creating renewable energy sources. These projects offset emissions by creating carbon sinks, which absorb and store carbon in the atmosphere. Artificial carbon sinks are also being explored, such as carbon capture and storage. To achieve carbon neutrality and to limit global warming, carbon offsetting projects must be implemented alongside other emissions reduction strategies. Taking a holistic approach to emissions reductions will ensure that any projects implemented are beneficial for the environment, society and economy.

The process of offsetting emissions has been criticised for “greenwashing”, which is when companies falsely claim environmental benefits from their products and services. It is important to ensure any offset projects are proven and monitored, so the emissions reductions can be effectively tracked. The gold standard of carbon offsetting is the Verified Carbon Standard (VCS) which allows organisations to prove their emissions reductions

Net0's platform helps large businesses and governments to track and monitor their offset projects, so they can ensure any emissions reductions are properly accounted for.

How Net0 helps achieve carbon neutrality

Businesses can start by measuring their CO2 emissions and then analysing where they can cut back and switch to alternatives.

The road map to carbon neutrality looks like this:

  • Measure and analyse emissions. This can be done easily in Net0's automated carbon management platform which enables businesses to upload their utility bills, invoices, and other data with the information an organisation provides.
Net0 Dashboard of
  • Reduce emissions. Now with the information laid out, see the big picture, where reductions can be made, discover insights about using alternatives, and strategise for the future. Net0 has a simulator tool where you can compare benchmarks by inputting your current carbon footprint to what your reduction targets should be in the future.
Net0 Simulator to reduce carbon emissions
  • Strategize for the future using Net0's Marginal Abatement Cost Curve (MACC) tool. When you see what projects are profitable for the company at the moment, our AI-powered tool guides you in choosing the best reductions and therefore leading your strategy.
marginal abatement cost curve (macc)
  • Offset the residuals. Until we can completely switch to alternatives from the beginning of production to the end of the supply chain, service, and product life cycle, the leftover emissions will have to be offset. Carbon offsets are necessary because they fund projects to change our lives in the long term like constructing wind farms so we can switch to alternative energy, just as one example. Offset projects include various programmes from tree planting or investing in carbon sinks (or creating artificial carbon sinks) to direct carbon capture and reef planting. What is important to know about carbon credits is that they aren't an excuse to emit more carbon. The idea is that an entity can buy fewer credits every year because reductions are the goal. And with those credits, they purchase offsets that will benefit communities and the atmosphere altogether by using alternatives to fossil fuels or improving the environment around them. Projects that remove carbon are usually more expensive, but they provide a greater benefit in the long run.
Net0 Carbon Offsets dashboard
  • Report and certify. When you've gone carbon neutral, Net0 will generate an investor-grade report so you can communicate your milestones to stakeholders. We also provide badges to put on products, premises and media to display your carbon neutral status so people are clear that they are contributing to a carbon neutral organisation.
Net0 Certificate

Carbon neutrality by 2050 in the EU

With the European Climate Law, the EU is committing to carbon neutrality by 2050.

In December 2019, the European Commission presented the European Green Deal, its flagship plan that aims to make Europe climate neutral by 2050. This target will be reached through the European Climate Law that sets climate neutrality into binding EU legislation.

In November 2022, the Commission granted over €380 million to 168 new LIFE projects dedicated to European climate action and the environment. The European Green Deal's LIFE projects foster biodiversity, clean energy and a circular economy to help make the EU climate-neutral by 2050.

The funding is a 27% increase on funding of 2021, and will mobilise a total investment of over €562 million. Projects from almost all EU countries will benefit from this EU funding in four themes:

  • nature and biodiversity
  • circular economy and quality of life
  • climate change mitigation and adaptation, and
  • the clean energy transition.

What are some examples of carbon neutral companies?

Many companies are going for carbon neutrality and making pledges but only a few have achieved it. Here are a few examples of companies that have carbon neutral or better status:

Baukjen, the highest-scoring sustainable UK fashion brand is climate negative across its supply chain and received a UN Climate Action Award in 2021. They also ranked number 1 as a Certified B Corp Business because they continue to fulfill so many of the UN's Sustainable Development Goals (SDGs).

Taylors of Harrogate, a tea and coffee brand from the UK, became a carbon neutral business in February of 2020. They also won a UN Climate Action Award in 2021. They have a carbon neutral certification from "field to supermarket shelf." Additionally, they've cultivated long-term partnerships over decades as an ethical company with the countries they source from, which are experiencing rising temperatures due to global warming.

Another winner of a UN Climate Action Award is Microsoft, which has been carbon neutral since 2012 and will be carbon negative by 2030 for all 3 scopes. Since 2014, they have used 100% green energy across their US operations. They have also started Microsoft's Climate Innovation Fund which will invest 1 billion USD over 4 years to "expand access to capital" all over the world to those working to solve climate change problems and also towards new technologies helping resolve the issue.

Final thoughts

In order to become carbon neutral, individuals and companies need to become conscious of the carbon emissions they are responsible for and take action to reduce them. The European Green Deal and its various projects are an example of how the EU is driving forward climate change legislation and initiatives to become carbon neutral by 2050. The EU has become a leader in climate change initiatives, and it is up to us all to become carbon neutral. We can become carbon neutral with conscious behaviour, investment in carbon-offsetting projects and renewable energy sources, as well as by supporting the EU's initiatives.

Businesses can also do a lot to fight climate change and help limit global warming. Planning your path to net zero will be a positive transition that can be easily managed with the right technology. Achieving carbon neutrality doesn't have to be daunting - with the right technology, it can be easy!

Now that you know the basics about net zero vs. carbon neutrality, we invite you to book a call with us to talk to an expert and experience how Net0's emissions management platform can help your business achieve carbon neutrality.

Written by:

Kristin Irish

As a content writer for Net0, Kristin harnesses her expertise and enthusiasm for carbon emissions reduction, merging it with her other passion: the B2B SaaS industry. Her global outlook and dedication enrich the sustainability sector with insightful perspectives.
Company LinkedIn

Request a demo of Net0 platform

Talk to us to learn more about making your business carbon neutral.
Request a demo

Reimagine Sustainability
with AI

Capitalize on the economic opportunities of sustainability with Net0's emissions management software.

Schedule a demo
Net0 Interface