Carbon neutrality and net zero, a world of difference


Have you ever come across thesetwo terms and thought: “How do they differ”? Are you wondering which of them your company should seek? How can you use them without making ambiguous claims? Read along to grasp the major distinctions between these frequently used concepts and understand their true implications.

Under the Paris Agreement (2015), the EU has setambitious targets to reach climate neutrality by 2050 and thus, achieving zero net emissions. This should limit global temperatures increase to 1.5°C, with 1990 as the base year. Within this scope, terms such as “carbon neutrality” and its analog “net zero” are extensively used, but another reality gradually unfolds. Numerous are companies that make inappropriate claims by heralding carbon neutrality or net zero states without knowing what it means


Carbon neutrality, an overused statement/ what is carbonneutrality?/what does carbon neutrality stand for? 

The term “carbon neutrality”finds its roots in the Kyoto Protocol (1990) where it was possible to achieve it by compensating (offsetting) all emissions (e.g., buying carbon credits). Thereafter, several differing interpretations have emerged, both in law and
specialists’ minds. Confusion, therefore, arises since the Kyoto Protocol addresses all emissions but carbon neutrality now only refers to CO2 releases without taking all GHG emissions into account.

As of today, plenty of normsattempt to elaborate concise definitions, examples are the English norm PAS 2060, the ISO 14068, and the French notice ADEME. In response to the lack of a specific definition, the European Commission is currently involved in the
process of legally delineating environmental labels through its initiative “substantiating green claims” that aims to fight greenwashing and promote reliable practices.

For the sake of this study, wewill be relying on the French law n°2021-1104 dating from August 22 (2021), pertaining to climate change and increasing resilience. A company can declare itself “carbon neutral” if it complies with three requirements: (1) quantify and report on its reduced emissions, as well as (2) transparently disclose its greenhouse gas balance, and (3) compensate residual carbon emissions in order to declare itself “carbon neutral”. In fact, many sectors will be unable to cut their emissions to zero and will unavoidably face remaining ones. Therefore, companies will rely on offsetting schemes to compensate them (e.g., carbon credits).

Beware, offsetting is often seenas greenwashing since it does not directly remove carbon from the atmosphere. In turn, this may affect a “carbon neutral” claim’s reputation, especially considering that Paris Agreements’ objectives cannot be met solely through offsetting schemes.


Net zero: the promising target 

Advocated by many as the holyobjective to reach the 2030 and 2050 EU climate goals that originate from the Paris Agreements, net zero goes much further than carbon neutrality. To reach a net zero state, all greenhouse gas emissions (GHG) must be reduced to the maximum extent with a thorough decarbonization strategy. Moreover, unavoidable residual emissions must be neutralized thanks to carbon removal schemes, also referred to as “carbon capture”, or “carbon sinks”.

According to the IPCC, carbonremoval enables the effective absorption of anthropogenic GHG emissions and
contributes to the reduction of polluting gases stagnating in the atmosphere
through two solutions:

  1. Technologicalremoval schemes: these specialized technologies allow the extraction of gases from the air and enable their storage underground or their transformation intonproducts such as stone or cement that will trap gases.
  2. Naturalremoval schemes: natural carbon sinks enable sequestration through forests*[1]or oceans, for instance, which allow the natural absorption of certain
    greenhouse gases.

Net zerowill only be attained if three pillars are respected. Firstly, (1) companies
must reduce their emissions but, subsequently, (2) they are also expected to
help others reduce theirs by commercializing carbon neutral products or finance
projects within their own value chain, to name a few. Lastly, (3) the remaining
emissions must be removed thanks to technological or natural solutions.


It is a matter of temporality 

When tackling sustainability,“carbon neutrality” and “net zero” are widely used terms, but often confused or even wrongly interchanged. While net zero aims at attaining a zero net balance where all remaining emissions are removed, carbon neutrality focuses on compensating them instead, which is far less beneficial on the long run. Although carbon neutrality remains a solid starting point in one’s quest toward a zero net balance, it should not be the ultimate purpose. Besides, returning to pre-industrial levels cannot be achieved only with a net zero strategy and will require further efforts, such as aiming at climate-positive targets.


[1] *Aslong as they are well managed so as to create long-lasting forests. In fact, wood that is cut and left to its fate will release all of thegases that it stored, and the same applies to forest fires. If one wants to keep polluting gases trapped in trees, one must ensure appropriate measures.



Written by Anthony Verpoten

Reviewed by Esther Nicolas











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