Carbon offsets
What are offset units?
An offset unit, also referred to as a carbon credit, is a financial product which is traded and sold on the carbon market. Offset units are issued to individuals or businesses who run eligible carbon abatement projects under an offset scheme.
Each unit represents the avoidance, reduction or removal of one tonne of greenhouse gas emissions. Issued offset units can then be traded, purchased and retired by individuals and businesses to ‘offset’ their residual emissions.
How does offsetting work?
Offset units are used to compensate for the residual emissions a business produces, to help reduce their carbon footprint where it may not be possible or feasible to reduce their direct emissions.
A business can purchase the number of offset units required to equal the emissions released within their carbon footprint (scope 1, 2 and 3) and retire these units in the relevant offset scheme registry. Retiring an offset unit ‘cancels out’ the unit to ensure it is only used once.
Businesses can then report on their carbon footprint and the offset units they have retired to compensate for these emissions.
Offset projects
There are numerous different projects generating offsets in Australia and around the world. To be certified, Climate Active members are required to use offsets that result in genuine emissions reduction.
The offsets eligible under the Climate Active Carbon Neutral Standard are listed at Appendix A of the Standard and in the Technical Guidance Manual.
Climate Active assesses eligibility at the scheme level, it does not assess or certify individual offset projects or methods.
Guidance on buying offsets is provided in the Technical Guidance Manual. Climate Active encourages all members, regardless of whether they are purchasing offsets directly or through a broker, to undertake their own due diligence assessment of the individual projects, including the carbon abatement method used and other social, cultural and economic information about the project.
Australian Carbon Credit Units
When you purchase Australian Carbon Credit Units (ACCUs) the benefits go directly to Australian communities and our environment.
You can find out about carbon offset projects in Australia producing ACCUs at Australia’s carbon marketplace or the Clean Energy Regulator’s map of Emissions Reduction Fund projects.
ACCUs are a financial product under the Corporations Act 2001. You should seek independent legal and/or financial advice about your individual circumstances.
Offsets are more than carbon
While carbon offset projects prevent, reduce or remove greenhouse gas emissions from being released into the atmosphere - that's not all they do.
Often these projects have other benefits such enhanced biodiversity, habitat protection, creating employment, helping people to live and work on country, improving health and education, and providing access to clean and affordable energy.
Co-benefits include many aspects of life:
- Environmental benefits include increased biodiversity, maintaining habitat for native animal and plant species, improved local air and water quality, avoiding vegetation clearance, re-establishing vegetation on previously cleared areas, and improved environmental management.
- Social and cultural benefits are the positive aspects for communities where a project is based such as employment for local people, living and working on country, capacity building, improved health and education, and access to clean and affordable energy.
- Economic benefits occur when income from the sale of offset credits flows to the community where a project is located and often translates into employment and community support, improved infrastructure, technology transfer, and increased economic activity.
