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Carbon Neutral, Net-Zero, Zero-Carbon... Here’s What You Need to Know

Described as a 'Code Red' for humanity, the latest UN Intergovernmental Panel on Climate Change (IPCC) report concluded that limiting warming to 1.5°C above pre-industrial levels means reaching net-zero carbon by 2050. Remaining within the 'carbon budget' – the total amount of CO2 that can be emitted while retaining the possibility of limiting warming to 1.5°C – is feasible, but will require accelerated climate action. Otherwise, the world risks exhausting its carbon budget within a decade.

Blue sky and clouds

As we build up to this year's United Nations COP26 climate conference, governments, corporations, cities and other entities have been setting out their climate ambitions using a range of terminology. Often 'carbon dioxide' is used interchangeably with 'greenhouse gas', although non-CO2 greenhouse gases such as methane (which are more potent short-term) will take longer to phase out. Terms such as 'carbon neutral', 'net-zero', and 'zero-carbon' also have distinct meanings.

Carbon Neutrality

Carbon neutrality involves balancing carbon emissions overall. Committing to carbon neutrality does not require (or even imply) reducing overall emissions. A business can even increase its carbon emissions without breaking a pledge to carbon neutrality.

This is because its emissions can be 'offset' by supporting projects to remove an equivalent amount of CO2 from the atmosphere elsewhere. This is achieved through various 'carbon credit' systems, whereby a carbon emitter buys permission to emit an amount of CO2 by funding decarbonization initiatives in areas such as renewable energy, energy efficiency, and tree planting. Many of these projects also have social benefits, as they are typically based in developing nations.

Fir tree forest

Carbon offsetting initiatives can be enforced or voluntary. For instance, the European Union's Emissions Trading Scheme forces entities to buy carbon credits to comply with legally binding CO2 caps. Meanwhile, many companies in civil aviation give customers the option to buy carbon credits so their flights are carbon neutral.

Net-Zero Carbon

Net-zero carbon means the amount of CO2 being emitted into the atmosphere – by a company, a city or a country – is stable or falling. A net-zero company, for instance, would have no carbon emissions associated with its operations overall. An economy can retain a small amount of fossil fuel use while contributing no CO2 overall. This requires 'balancing' emissions by removing CO2 through initiatives such as carbon capture, utilization, and storage (CCUS) – part of every feasible pathway to 1.5°C assessed by the IPCC – and through tree planting.

Net zero has become the most widely used term to talk about national decarbonization targets, with most governments announcing 2050 dates for their countries to reach that point. The UN 'Race to Zero' campaign, meanwhile, calls on regions, cities, businesses, investors, and civil society to submit their own plans to reach net-zero emissions by 2050, ahead of the UN's next major climate conference, COP26, in Glasgow later this year.

Twisted measuring tape on yellow background

For most countries, reaching net-zero requires a large reduction in carbon emissions. Energy systems are projected to be dominated by renewables in a net-zero world (under the 1.5 degree pathway, IPCC projections suggest renewables will supply 70-85 percent of electricity by 2050), while energy efficiency measures and alternative heat and fuel sources will also help.

Even within the term 'net zero', there are different implications and expectations for different countries. Wealthy, technologically advanced economies can reach net-zero carbon by 2050 without (or with minimal) fossil fuels, but most countries will only be able to reduce – not eliminate – them. This is in part because some are more reliant on sectors that are challenging to abate, such as steelmaking, shipping and aviation, and also because some countries are not in a position economically to complete a just, stable, and affordable phase-out by 2050.

Zero Carbon

While carbon neutral and net zero make some allowances for fossil fuels, zero carbon permits no carbon emissions at all. For a country to reach zero carbon, it must not only have an energy sector entirely based on renewables and nuclear, but would also need to find alternatives to burning fossil fuels and biomass for heating and transport; that means heat pumps and electric boilers for heating, aircraft running on electricity or alternative fuels, and only electric vehicles on its roads. This is by far the most ambitious of the decarbonization targets.

Overhead shot of sprinters on a track

While zero carbon is achievable for some buildings, communities and companies – especially if designed from scratch with sustainability as a priority – it remains extremely challenging at scale or across a medium to large national economy. In the short to medium-term, our national and global economies will still rely on hard-to-abate sectors such as travel, trade and construction – and the greenhouse gas emissions associated with them – meaning zero-carbon is a long-term goal for most.

As countries lay out their climate targets ahead of the COP26 summit this autumn, clarity and transparency in describing different energy strategies will be vital to constructive and deliverable international dialogue on energy.

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