Carbon Takebacks – 3 Key Takeaways

A Carbon Takeback policy marks a paradigm shift in the world of voluntary carbon offsetting. The idea is pretty straight forward: We still need to use some fossil fuels as the world decarbonizes, but every tonne of carbon dioxide that is emitted from burning fossil fuels needs to be balanced by permanently storing a tonne of carbon dioxide. Based on this concept, there is a call for a new carbon trading mechanism known as a Carbon Takeback Obligation (CTBO) to incentivize the growth of the carbon dioxide storage industry.

Here are three key takeaways you need to know when developing a CTBO program for your organization:

1. The status quo is no longer enough

Traditional offset credits vary drastically with regard to the project type, additionality criteria, and permanence. As a result, many traditional offset credits are low quality and can inflict reputational damage on your organization. A CTBO is of the highest environmental integrity as it ensures that every tonne of carbon dioxide that is emitted from burning fossil fuels is balanced by permanently storing a tonne of carbon dioxide. In this way, a CTBO helps to incentivize the growth of the carbon dioxide storage industry. The carbon dioxide storage industry is currently in its nascency. Those organizations that act now to lock in long-term supply will serve as a catalyst for the scale-up of this vital industry.

2. Carbon accounting in a net zero world needs to change

Traditional offset credits are largely made up of avoidance-based activities (for example, preserving existing forests or generating electricity with renewable sources). While avoidance-based activities are necessary for mitigating climate change, they are not enough. We also need to remove carbon from the atmosphere and permanently store it. When a company purchases a traditional carbon offset credit, it will use it to neutralize emissions from elsewhere in its operations. Since the avoidance-based activity emits no carbon, the increase in atmospheric carbon impact is equal to the carbon emitted from the company’s operations. This is a better state than having no avoidance-based activities (for example, it is better to have renewable electricity with zero emissions and the company’s operational emissions than it is to have electricity generation with coal plus the company’s operational emissions). However, offsetting with avoidance-based activities still results in a net increase in atmospheric carbon. What is needed is a negative emission technology to truly neutralize the impact of the company’s operational emissions. Currently, carbon accounting standards are evolving to recognize this distinction. Organizations that react now to this changing reality will be ahead of the curve.

3. Not all carbon removals are created equal

When carbon is removed from the atmosphere it represents a negative emission. However, simply removing the carbon is not enough. We also need to store it to prevent its release back to atmosphere. Carbon can be stored in geospheric, biospheric, and atmospheric carbon stocks. Not all storage options are created equal with regard to their permanence. Ultimately, long-duration storage of carbon is the most helpful in combating global climate change. A CTBO employs a like-for-like principle. That is, if carbon is taken from the geosphere and released to the atmosphere (as is the case when we extract fossil fuels and combust them), it needs to be matched by the capture of atmospheric carbon and its storage in a geological formation. The goal of the like-for-like principle is to match timescale and permanence of carbon sinks. Companies that plant tress to offset fossil fuel emission should take note. The status quo will likely have a limited runway under this new paradigm shift in the world of voluntary carbon offsetting.

Frostbyte is helping clients to build credible net-zero strategies and source high integrity carbon offset credits that are consistent with the Carbon Takeback Obligation (CTBO) principles. We have recently developed a detailed White Paper on the mechanics of Carbon Takebacks and how they can benefit your organization. Please reach out if you would like a copy of this White Paper or would like to discuss how Frostbyte can help your organization meet it sustainability goals.

Contact Us Today: https://www.frostbyteconsulting.com/about/contact/