Carbon compensation:
a comprehensive guide

Navigating the world of carbon compensation

What is carbon compensation?

Carbon compensation or offsetting is the process of balancing your carbon footprint by offsetting your emissions with carbon credits (carbon units) generated by carbon projects such as nature-based solution projects. Carbon offsetting is a vital tool to restore nature and contribute to environmental health. Carbon dioxide (CO₂) emissions have a global impact, regardless of where they are emitted. Therefore, by offsetting your carbon emissions, you contribute to global efforts to restore and protect our planet.

Individuals or businesses can purchase carbon credits to compensate for their carbon emissions, representing a reduction or removal of one metric tonne of CO₂ or its equivalent. These credits can be bought from projects designed to reduce carbon emissions, such as reforestation initiatives, nature restoration, energy efficiency, or renewable energy projects. By purchasing carbon credits, individuals or businesses are paying to offset the carbon emissions their businesses or households produce.

Read more: Reforestation: 10 amazing benefits of planting trees

Carbon offsetting is not a substitute for reducing carbon emissions directly but rather a complementary approach. No matter how strictly a business or household cuts its carbon emissions, getting it down to zero is nearly impossible while maintaining normal activities. This is where carbon compensation comes in: to complement the process and help achieve net zero. 

Read more: Industry carbon footprints: transport, events, and celebrities

Carbon offsetting is also a great way to take responsibility for past carbon emissions and carbon emissions that are difficult or impossible to reduce directly, such as those associated with air travel or the production of certain goods. 

Read more: Uncovering the impact of Scope 3 emissions

Why is carbon compensation important? 

Carbon offsetting benefits many areas of our daily lives and ultimately contributes to a greener and more abundant future. Let’s discuss some of the benefits:

• Protection and conservation of nature: Carbon offsets help companies keep nature in mind when doing business. It allows individuals and organisations to take responsibility for their carbon footprint and contribute to the global effort to address the environmental goals set by the 2015 Paris Agreement. 
• Supporting sustainable development: Carbon offsetting projects often provide additional benefits beyond reducing carbon emissions. For example, reforestation projects help restore degraded ecosystems and protect biodiversity, while energy-efficient cookstove projects improve indoor air quality and reduce respiratory illness. These co-benefits can contribute to sustainable development in local communities.
• Meeting emissions reduction targets: Carbon offsetting can help individuals and organisations meet emissions reduction targets, such as those set by governments or industry associations. This is particularly important for organisations unable to reduce their emissions directly due to the nature of their business or current technological limitations.
• Encouraging investment in sustainability: Carbon offsetting provides funding and encourages investment in developing sustainability initiatives. It helps accelerate the transition to a low-carbon economy and reduces our reliance on fossil fuels.

Read more: The importance of carbon offsetting in achieving net zero

Toucan sitting on a tree branch, Brazil.

How does carbon compensation work?

There are organisations that design and manage different nature-based or sustainability-oriented projects. If they meet industry standards, they can offer carbon credits to companies that need to offset their carbon emissions. 

Read more: The rising demand for nature-based credits

Tree seedlings - Greenzone Afforestation Project, Cameroon, DGB. 

At DGB Group, we focus on nature restoration, reforestation, and energy-efficient cookstove projects. Even before we start a project or plant our first tree, we work closely with Gold Standard or Verra programmes to ensure that our projects generate the highest quality carbon credits possible. These programmes, along with our project design, surveys, stakeholder meetings, and further strategic planning, help us create large-scale, impactful projects and originate verified carbon credits for our clients. 

What is a carbon footprint?

A carbon footprint is the total amount of CO₂ released into the atmosphere due to human activities such as burning fossil fuels, deforestation, and other industrial processes. It measures how much each person, organisation, or product contributes to global carbon emissions. It represents our impact on the environment through our daily actions and the amount of carbon we are responsible for emitting.

Read more: Sustainability simplified: Carbon footprinting for beginners

There are two types of CO₂ emissions:

• Direct emissions are the emissions generated from activities directly under an individual or organisation's control, such as burning fossil fuels for transportation or heating.
• Indirect emissions are the emissions generated as a result of activities that are not directly under an individual or organisation's control, such as the emissions generated during the production and transportation of goods and services.
  

Read more: How do carbon footprints work?

Types of projects used for carbon compensation

There are different projects that can qualify to offset carbon emissions. As long as the positive environmental impact is measurable and industry standards are met, the following types of projects can be eligible for carbon offsetting and thus produce carbon credits:

• Reforestation and afforestation projects: These projects plant trees or manage forests to absorb CO₂ from the atmosphere, storing it in the biomass of the trees and soil. This helps mitigate changing environmental conditions and provides co-benefits, such as biodiversity and soil conservation.
  

  Read more: Ultimate guide to Africa’s 47 afforestation and reforestation projects

• Energy-efficient cookstove projects: These projects provide households with improved cookstoves that burn less fuel and produce fewer emissions, reducing indoor air pollution and carbon emissions as well as pressure on forests.
• Energy efficiency projects: These projects reduce energy consumption in buildings, transportation, appliances, and industry, which can result in a reduction of energy needed and carbon emitted.
• Blue carbon projects: These projects restore and conserve coastal ecosystems such as mangroves, salt marshes, and seagrass beds, which store large amounts of carbon in their biomass and sediment.
• Renewable energy projects: These projects generate electricity from renewable sources such as solar, wind, or hydropower, which replaces electricity that would otherwise be generated from fossil fuels, reducing carbon emissions.
• Carbon capture and storage projects: These projects capture CO₂ emissions from industrial processes or power plants and store them underground or in other long-term storage solutions, preventing their release into the atmosphere. While this technology is still in its early stages, it has the potential to significantly reduce emissions from industries that are difficult to decarbonise.
• Methane capture and destruction projects: These projects capture and destroy methane emissions from landfills, agriculture, and industrial processes that would otherwise be released into the atmosphere through combustion or conversion to energy. Methane is a potent greenhouse gas; capturing and destroying it can significantly reduce emissions.

Theo Oben - Greenzone Afforestation Project, Cameroon, DGB.

How to calculate your carbon footprint

Calculating your carbon footprint is a momentous first step towards carbon offsetting. Organisations usually follow these steps to get the carbon-offsetting process started:

• Measuring carbon emissions: This is typically done by calculating the amount of CO₂ emitted. Here is the DGB carbon footprint calculator you can use to estimate your carbon footprint in less than 5 minutes.
• Choosing an offset project: Once the emissions have been calculated, the individual or company can choose a project or programme to purchase carbon units from. These projects could include reforestation and afforestation, nature restoration, energy efficiency improvements, renewable-energy projects or other initiatives that reduce carbon emissions.
• Calculating the offset: The offset is calculated by determining the amount of CO₂ emissions that will be reduced by the chosen project. This can be done through various methods, such as measuring the number of trees planted or the amount of CO₂ captured and stored.
• Purchasing and retiring offsets: Finally, the individual or company purchases and retires the offset credits. The offset credits can then demonstrate that the individual or company has taken steps to reduce its carbon footprint.

Read more: How to use DGB Group's carbon footprint calculator on your journey to net zero

The most common carbon offsetting questions answered

What is carbon offsetting?
Carbon offsetting compensates for the CO₂ emissions an individual or organisation generates by purchasing carbon units from projects that reduce or remove emissions from the atmosphere. DGB's nature-based projects offer many environmental and socio-economic benefits in addition to carbon mitigation, allowing companies, individuals, and governments to reduce their carbon footprint and invest in nature. 

Read more: The interconnected world of carbon: exploring key carbon market concepts

How do I choose a carbon offset provider?
When choosing a carbon offset provider, consider factors such as credibility and transparency, project quality, location, price, and additional services. You also need to ask if the carbon offsets you are inquiring about are certified and verified. You can speak to our experts to find the best option for your sustainability goals.

How does carbon offsetting work?
Carbon offsetting or compensation works by investing in projects that reduce or remove carbon emissions, such as reforestation projects. These projects are independently verified and certified. The amount of emissions reduced or removed is translated into carbon units that can be purchased and retired by individuals or organisations to offset their carbon emissions.

Read more: Sustainability simplified II: Carbon units for beginners

Why is carbon offsetting important?
Carbon offsetting is important because it helps reduce the impact of carbon emissions on the environment by supporting the development of sustainable, low-carbon projects that often also have many other environmental and socio-economic benefits. Carbon offsetting is therefore a vital tool to restore nature on a global scale.

Read more: The role of carbon credits in business: benefits, challenges, and future outlook

What are the types of carbon offsets?
The types of carbon offsets include reforestation and afforestation projects, energy efficiency projects, renewable energy projects, methane capture and destruction projects, and carbon capture and storage projects.

Read more: How are carbon credits issued?

How do I calculate my carbon footprint?
You can calculate your carbon footprint using the DGB carbon footprint calculator by identifying your activities that generate carbon emissions, estimating the amount of emissions associated with each activity, and converting emissions to CO₂.

What are some reputable programmes that verify carbon offsets?
Some reputable carbon standard programmes include Gold Standard and Verra. At DGB, we follow these standards and use them as early as in the project discussions phase.

Can individuals offset their carbon footprint?
Yes, individuals can compensate for their carbon footprint by purchasing carbon units from a reputable carbon offset provider like DGB Group.

Is carbon offsetting a sustainable solution to meet the goals of a corporate social responsibility strategy?
Carbon offsetting is a valuable tool in a comprehensive corporate social responsibility strategy. Also, with an increased number of consumers who care about the environment, it helps to show that companies are on the same page as their customers. 

Read more: 5 Sustainable business practices to achieve net zero

Demonstrating a tangible positive impact

Taking action through carbon offsetting is a great way to make a positive impact on the environment and become a leader among modern companies that show their support for a greener future. By investing in carbon offset projects, you can help reduce CO₂ emissions and demonstrate your commitment to sustainability and social responsibility to match the values of your customers.

Read more: 100 Reasons carbon credits are the best thing that ever happened to improve conditions on our planet

In addition, current market trends in consumer preferences show that more and more consumers are prioritising environmentally friendly products. Carbon compensation is an optimal solution to show your customers that your products and services are nature-friendly. 

Read more: Net zero and a circular economy: Top 3 opportunities and challenges

Industry-leading carbon offsets with DGB Group

Choose to offset your CO₂ emissions with DGB by supporting our reforestation, habitat restoration, tree planting, or energy-efficient cookstove projects. We manage our projects with a boots-on-the-ground approach, with ecologists, conservation biologists, and local staff at each project site. In addition to meeting your corporate social responsibility goals and nurturing mother nature, you also become a catalyst to provide jobs to many communities. Our projects generate high-quality, independently verified credits that help you reach your sustainability goals.