Carbon Neutral vs. Net Zero: What’s the Difference? (2025 Update)
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Codee Chessher
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Over the past few years, as going green has become the new gold standard, terms like “carbon neutral” and “net zero” have popped up. Surprisingly, they’re not the same thing, despite sharing a common goal in mind. What exactly is the difference between carbon neutral and net zero? Let’s dive in and find out.
Overview of Carbon Neutral
Overview of Carbon NeutralCarbon neutral is a term that means a company or country successfully offsets or captures carbon equal to or exceeding what they produce.
In practical terms, a carbon neutral company or country still produces greenhouse gasses contributing to manmade climate change, but they offset or sequester more carbon than they produce. In essence, it’s a fancy way of saying that an entity has to clean up after its own emissions.
Companies can purchase carbon offsets while their own emissions are actively rising, making carbon neutral a somewhat disingenuous term. The offsets do help desperately underfunded environmental projects, which are seen as poor business investments.
Carbon Offsets
A carbon offset is a way of reducing an entity’s carbon emissions by investing in clean technology and other carbon neutral or net zero initiatives. By using carbon offsets, a company can effectively cancel out its own emissions. Carbon offsets are essential to help companies that can’t reasonably cut their emissions.
There are various methods of offsetting carbon emissions. Some popular examples include supporting reforestation, renewable energy technology, and clean water access.
- More achievable than completely cutting all greenhouse gas emissions
- Carbon offsetting is the only viable method to support carbon neutral efforts for some industries
- Helps support underfunded environmental technology projects
- Does not actually reduce your own emissions
- Can lull companies into a false sense of security
- Can increase commercial product prices because carbon offsetting has no return of investment (ROI)
- Allows companies to claim they’re carbon neutral, which leads consumers to believe the company produces no greenhouse gasses
- Vulnerable to fraud
- Delayed impact when offsets are related to long-term projects like reforestation
Overview of Net Zero
Net zero is sometimes used interchangeably with carbon neutral but is not the same thing at all. Net zero means that an entity has completely cut its own carbon emissions as much as possible and is fully invested in renewable technology and other environmental efforts.
While carbon offsets are necessary for some industries, like ocean shipping and commercial airlines, going net zero means doing everything in your power to cut emissions while using offsets to minimize impact. Net zero emissions also mean a company or entity produces zero emissions, which is easier said than done, like the aforementioned industries.
What Are Some Ways to Go Net Zero?
Net zero is a very complex topic because it permeates every industry on Earth. Ocean shipping can’t be expected to have net zero emissions tomorrow or next week but making an effort to cut emissions is what matters. An airliner cutting flights to reduce emissions while participating in offsetting would technically be net zero, although not with net zero emissions.
- Climate stability
- Long-term energy sustainability
- Will help generate entire industries with job opportunities
- After an adjustment period, electricity prices would drop
- Difficult to verify
- Electricity prices would rise during a net zero transition in the worldwide power grid
- Huge upfront costs
- Companies are less inclined to go net zero because it isn’t as profitable for shareholders
What Is the Main Difference?
We’ve thrown a lot of technical jargon at you so far, so let’s just make this easy. Net zero means to completely cut greenhouse gas emissions, and carbon neutral means to offset or cut emissions to balance how much carbon is emitted.
The goal of these two terms is roughly the same, but the path we tread to get there may not be. Carbon neutrality makes companies comfy with having a “green” reputation without doing any of the hard work to overhaul their activities in a net zero manner. It is far more realistic to achieve a carbon neutral world than a net zero world.
Going net zero, by contrast, is much tougher upfront. The astronomical financial cost for the whole planet to go net zero will be felt around the globe, but the long-term opportunities are incalculable. Entire new industries that will need technicians and other jobs will spring up, replacing arcane industries like coal mining.
So, which one is better? Net zero is the end goal to stabilize the planet’s climate and avoid widespread disasters like drought, famine, strengthening storms, and more. It may not be achievable for years or decades to come, but carbon neutrality helps to ease the transition.
Conclusion
Net zero might be the end goal, but carbon neutrality is an essential step to getting there. Carbon offsets are essential to incentivizing companies to innovate and invest in cleaner technology, even if they can’t instantly cut off all their carbon emissions.
Featured Image Credit : (L) Carbon Neutral, CameraCraft, Shutterstock | (R) Net Zero, Bilanol, Shutterstock
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