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Can Carbon Neutrality drive Net Zero in industry?

Panel: 2. Energy management and corporate culture

Author:
Ian Byrne, IBECCS Ltd, United Kingdom

Abstract

Carbon neutrality is a contested concept. The EU Directive on Green Claims looks set to ban any consumer-facing claims (whatever they are called) that rely on offsetting, believing that it encourages greenwashing and misleads end-users of goods or services. Meanwhile, in late 2023, the International Organization for Standardization (ISO) has published its first standard on carbon neutrality: ISO 14068-1.

This presentation summarised the requirements of ISO 14068-1:2023 – Climate Change Management – Transition to Net Zero – Carbon neutrality. Its main aim to bring rigour to the topic of carbon neutrality, as in recent years there have been many competing definitions, sometimes based on no more than buying a few low quality carbon credits (offsets) to balance a limited assessment of energy-related GHG emissions (Scopes 1 and 2), and requiring no actions to reduce existing emissions beyond business as usual. In contrast, ISO 14068-1 was designed to serve as a stepping stone on the transition pathway to net zero. The international standard sets out a number of principles, including transparency, a recognition of the need for high ambition and urgency, and the need to underpin calculations with conservative estimates and a science-based approach.

All emissions – not just those of carbon dioxide – across all three Scopes – need to be taken into account, with organizations required to address their entire value chain, and carbon neutrality for products based upon a life cycle analysis. The standard lays out a clear hierarchy – reduce first, then make any removal enhancements and finally offset any unabated GHG emissions using high quality carbon credits – the hallmark of which is also described. Quantification of GHG emissions is in line with other ISO standard or equivalent methodologies, such as the GHG Protocol. The whole process has to be supported by a Carbon Neutrality Management Plan, which prevents single year claims, and needs to show progressive reductions in absolute emission levels aligned with global targets, and leading to net zero on an ambitious timeframe.

ISO 14068-1 accepts that there is a place for offsetting, either onsite or through the purchase of carbon credits. Although this is sometimes seen as diverting resources away from actions within the organizational boundary and encouraging management to delay taking more concrete actions, high quality carbon credits can lead to additional carbon reduction actions, especially in the Global South. However as the cost of credits has recently risen sharply, large emitters – such as most industrial companies – will only see offsetting as an interim stage on their pathway to drive down their own emissions.

The presentation briefly considered how carbon neutrality may be applied to industrial companies, whether operating business to business or manufacturing fast moving consumer goods. A rigorous determination of carbon neutrality can provide encouragement and recognition for companies working towards net zero, and potentially offer a verifiable means of managing supply chain emissions. ISO 14068-1 is seen as the first of a series of international standards covering the transition to net zero, including the conversion of the ISO IWA 42:2022 to a full standard. It also has strong links through its approach to management system standards, such as ISO 50001 (energy management systems) and ISO 50009 (which extends this to multiple organizations, including the supply chain) as way of encouraging a holistic approach to energy efficiency.

Downloads

Download this presentation as pdf: 2-011-23_Byrne_Pres.pdf