C
Carbon Offset
Definition
A carbon offset is a measurable, verifiable, and credible reduction or removal of GHG emissions from one source that is used to compensate for emissions produced elsewhere. Carbon offsets are generated through projects such as reforestation, renewable energy installation, methane capture, and direct air capture. The Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles (CCPs, published 2023) establish the quality standards for high-integrity voluntary carbon credits. Article 6.4 of the Paris Agreement establishes the international crediting mechanism (PACM), which became operational in 2025.
Source
Integrity Council for the Voluntary Carbon Market (ICVCM) Core Carbon Principles (2023); Article 6.4, Paris Agreement; Verra VCS Standard; Gold Standard.
Practical Explanation (Compliance Context)
Carbon offsets are used by companies to compensate for residual GHG emissions that cannot be eliminated. Under ISO 14068-1 and SBTi Corporate Net Zero Standard, offsets are only acceptable for emissions that cannot be abated with current technology. Companies should prioritise ICVCM CCP-labelled credits and track Article 6.4 credit developments. The EU’s Green Claims Directive proposal and Greenwashing Directive increasingly scrutinise offset-based sustainability claims.