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= Carbon neutrality = Carbon neutrality is a state reached when all greenhouse gas emissions attributable to an actor are fully compensated by greenhouse gas reductions, credits, or offsets exclusively claimed by the actor. Although the term "carbon neutral" is used, other greenhouse gases are included and measured by their carbon dioxide equivalence. Some climate experts consider carbon neutrality to be a less stringent standard than net zero, which can be seen as an intermediately step on the path to net zero.

Emissions reductions
See also: Carbon accounting

In order to measure and reduce emissions, carbon accounting standards have emerged which identify three categories of emissions attributable to an organization: scope 1, 2 and 3. To reach carbon neutrality, an entity must reduce emissions to zero across scope 1 and 2, and possibly scope 3 as well, depending on which carbon neutrality framework they are following.

Scope 1 Emissions
Scope 1 covers all direct emissions that are released from an organization’s operations. These include emissions from manufacturing, company owned vehicles and reimbursed travel, livestock and any other source that is directly controlled by the owner. To reduce these emissions, an actor can adopt new low-carbon industrial or agricultural processes, use low-carbon fuels, and electrify certain appliances such as stoves or heating.

Scope 2 Emissions
See also: 100% renewable energy

Scope 2 emissions include all emissions that result from purchased electricity. This includes electricity purchased from the grid, rather than on-site generation. To reduce scope 2 emissions, organizations can invest in on-site renewable energy such as solar or invest in new technologies that increase energy efficiency and therefore reduce electricity consumption.

Scope 3 Emissions
Scope 3 emissions are indirect greenhouse gas (GHG) emissions that occur in the value chain of an organization. These emissions are not directly produced by the organization, but they are indirectly caused by its upstream and downstream activities. Upstream emissions include emissions from a supply chain, downstream emissions occur from the use or distribution of the organization’s products and services. To reduce scope 3 emissions, organizations can coordinate with their suppliers and distributors, and identify new types of materials or uses for their products. While scope 3 is still considered optional to include in carbon accounting by some reporting organizations, it is increasingly becoming recognized as an important part of a carbon footprint that should be included when discussing carbon neutrality. For example, the latest international standard on carbon neutrality ISO/FDIS 14068 will require scope 3 emissions to be accounted for and balanced.

Carbon offsetting
Besides reducing emissions, actors can reach carbon neutrality by purchasing high quality carbon offsets or credits. These are credits which project developers sell based on emissions reductions or avoided emissions of greenhouse gas. There are several types of carbon offset projects, but common ones include planting trees (carbon removal), protecting trees from deforestation (avoided emissions) and energy efficiency projects (avoided emissions). If the total greenhouse gasses emitted is equal to the total amount avoided or removed, then the emissions are said to be 'neutralized.”

Some of the main standards and market places for the voluntary market include Verified Carbon Standard, Gold Standard and The American Carbon Registry. In addition companies can purchase Certified Emission Reductions (CERs) which result from mitigated carbon emissions from United Nations Framework Convention on Climate Change approved projects for voluntary purposes. Notably, permanent carbon removal credits, which are required for net zero but not carbon neutrality, are very scarce on the offset market today.

Standards and Certifications Bodies
Carbon neutrality can be claimed by organizations, regions, individuals and products. While there is no international legal framework that governs carbon neutrality, regional and voluntary standards have emerged. For example, Norway’s Eco-Lighthouse Program and the Australian government's Climate Active certification both offer carbon neutrality accreditation.

In the private sector, the Climate Neutral Network developed a prominent carbon neutrality certification called the Climate Neutral Certification. Other organizations such as ClimatePartner also help companies purchase offsets and provide accreditation of their climate neutral status. More recently, certifications have also become available from the CarbonNeutral Company (CarbonNeutral) and the BSI's PAS 2060. The PAS 2060 outlines specific standards for entities worldwide, and was developed through a process of expert consultation with the British Standards Institute.

Carbon Neutrality versus Net Zero
While similar, carbon neutrality has two key distinctions from net zero:

Offsets versus emissions reductions
According to ISO's and BSI' s carbon neutrality standards, organizations can claim "carbon neutral" once they have 1) begun reducing emissions (at any level), 2) created a plan to reduce emissions in the medium-long term as much as possible and 3) have purchased carbon credits or offsets to balance remaining emissions. Net zero standards, on the other hand, requires organizations to reduce emissions as much as possible first, and only then can carbon removal offsets be used to balance remaining emissions. Therefore, carbon neutrality is often considered a more short-term target, whereas net zero is more of a long-term target.

Offset types
Most carbon neutrality definitions, including ISO' s and BSI's carbon neutrality standards, allow organizations to use avoided-emissions offsets and does not specify how permanent or durable an offset must be. Avoided emissions offsets are those resulting from actions which reduce emissions relative to a baseline or status quo, but do not remove emissions from the atmosphere. Common avoided emissions-based offsets include energy efficiency retrofits or renewable energy projects. Net zero, on the other hand, only allows removal-based offsets that are equal in permanence as the greenhouse gases that they balance. For example, methane has a lifetime of around 12 years in the atmosphere whereas carbon dioxide lasts between 300 - 1,000 years. Accordingly, removals that balance carbon dioxide must last much longer than removals that balance methane. One challenge for achieving net zero globally is that few offsets on the market today are for removals with long-term storage.

Product labels
Another key difference between the two terms according to standards is that products can be certified as carbon neutral but not as net zero. The rationale behind this is that, until organizations and their supply chains are on track for net zero, allowing a product to claim net zero at this point would be disingenuous and lead to greenwashing.

Perceptions and confusion over net zero versus carbon neutral
There is broad consensus that net zero is a more strict standard than carbon neutral, though the precise difference between these terms is sometimes contested. Some authors and recommendations have asserted that the difference between carbon neutral and net zero terms is that carbon neutral solely focuses on carbon dioxide whereas net zero includes all greenhouse gases. Others have asserted that the difference lies in whether or not scope 3 emissions are counted, with only net zero standards requiring that they do. A growing number of experts believe that carbon neutrality should cover all scopes and greenhouse gases, and the distinction between carbon neutrality and net zero lies only in offset types and use of offsets.

Criticism
Carbon neutrality has been the subject of controversy over a few main reasons. The first stems from concerns that companies can purchase low quality carbon offsets to counterbalance emissions, which do not actually reduce emissions to the extent or duration that they claim. Some offsets may be “non-additional” meaning they represent emissions savings that would have happened otherwise. Others may be non-durable, meaning they last for less time than they are expected to, and for less time than the emissions they supposedly balance. In a notorious case, it was revealed that JP Morgan Chase had purchased 1 million USD in carbon credits to protect a forest that was already protected by the state of Pennsylvania. Through this purchase, they had claimed carbon neutrality for that year.

Carbon neutrality has also been criticized for allowing carbon credits--even if they are of high quality--to compensate emissions reductions. Climate justice organizations have asserted this as it allows polluters to unfairly buy their way out without taking adequate action. For example, Friends of the Earth UK has called offsetting “a con” and a “dangerous distraction.” The net zero framework has also been subject to similar scrutiny over this.

Carbon Neutral Organizations and Events
Carbon neutrality is increasingly seen as good corporate or state social responsibility, and a growing list of corporations, cities and states are announcing dates for when they intend to become fully neutral. Examples of companies and events that have received carbon neutral certification include:


 * Shaklee Corporation became the first carbon neutral certified company in April 2000 from the Climate Neutral Certification.
 * Salt Spring Coffee became the first carbon neutral coffee company in Canada. Salt Spring Coffee was recognized by the David Suzuki Foundation in their 2010 report Doing Business in a New Climate.
 * Goodvalley became a carbon neutral company as the first pork meat producer in 2018 after receiving certification in accordance with ISO-14064 and verified by TÜV Rheinland.
 * Climate Neutral Business Network states that it certified Dave Matthews Band's concert tour as Climate Neutral.

Self-proclaimed carbon neutrality
Other organizations, bands, and events have claimed carbon neutrality without official certification. Corporate examples of self-proclaimed carbon neutral and climate neutral initiatives include Dell, Google, HSBC, ING Group, PepsiCo, Sky Group, Tesco, Toronto-Dominion Bank, Asos and Bank of Montreal.

In the music industry, The Rolling Stones and Pink Floyd have made albums or tours carbon neutral, while Live Earth says that its seven concerts held on 7 July 2007 were the largest carbon neutral public event in history.

The Vancouver 2010 Olympic and Paralympic Winter Games were the first carbon neutral Games in history. Other events such as the G8 Summit and organizations like the World Bank are also using offset schemes to become carbon neutral.

Future carbon neutrality targets
Since 2019, an increasing number of business organisations have committed to attaining carbon neutrality by, or before, 2050, such as Microsoft (2030), Amazon (2040), and L'Oreal (2050). However there is some debate whether these targets may be overly ambitious.

In 2020, BlackRock, the world's largest investment firm, announced that it would be carbon neutral by 2050.