Carbon Offsetting NZ
May 8, 2023

Carbon Offsetting NZ

Discover the power of carbon offsetting: an effective way to compensate for your carbon footprint by supporting emission-reducing projects.

What is carbon offsetting, and how does it work?

Individuals and businesses invest in carbon offsetting projects in order to reduce their carbon footprint and net carbon emissions. The projects aim to remove greenhouse gas (GHG) emissions from the atmosphere and thus offset emissions from elsewhere. Carbon offsetting is a solution for emissions that cannot be reduced or removed by an individual or company. 

Carbon offsetting works through a trading system. Individuals or businesses start by purchasing carbon credits. One carbon credit represents one tonne of carbon dioxide offset through projects that remove or reduce emissions. These projects include renewable energy, reforestation or carbon capture and storage projects. The revenue generated by the purchase of carbon credits is reinvested into reduction and offsetting projects or further incentivises individuals and businesses to offset their emissions. While carbon offsetting is a revolutionary and effective method of reducing emissions, it cannot act as the only reduction method. We must continue to reduce emissions at the source as well. 

What are the benefits of carbon offsetting?

Stanford University did a deep analysis and found that carbon offsetting has valuable benefits beyond offsetting GHG emissions. These co-benefits include:

Reduction of GHG emissions: the obvious benefit! Investing in offsetting carbon projects means carbon reduction projects are supported and continue successfully

Support of sustainable development: Carbon offsetting projects not only offset emissions but also promote and support sustainable development by improving clean water, promoting biodiversity and using clean energy

Contribution to global climate action: Investing in carbon offsetting means people are taking the necessary steps to meet climate targets set out in the Paris Agreement and take climate action. 

Improved reputation: taking meaningful steps to reduce carbon emissions through offsetting shows stakeholders the organisation is committed to improving the world.

Creation of economic opportunities: By supporting offsetting projects, people are helping to create economic opportunities by generating employment, improving livelihood and promoting a sustainable economy, 

What is an example of a carbon offsetting project?

In New Zealand, we have our very own MyNativeForest projects. We plant native trees that sequester carbon dioxide from the atmosphere while also supporting native biodiversity. Individuals and businesses can purchase carbon credits that are generated from our native forests to offset their carbon emissions. Check out all of our native forest projects

What are the different types of carbon offsetting, and how do they differ?

There are varying methods of carbon offsetting, all of which generate carbon credits differently. Here are the most common types of offsetting:

Methane capture: Methane capture is the process of capturing methane emissions from landfills and livestock and destroying the emissions through the process of combustion or converting it into energy

Forestry: Protecting or planting forests offsets carbon as trees are able to absorb carbon from the atmosphere.

Carbon capture and storage: Capturing carbon dioxide from industrial sites or power plants and storing it underground is another way to offset emissions.  

The different carbon offsetting methods all have varying costs, benefits and environmental impacts. Considering all the options before investing in a certain project is crucial. Ensuring the project is credible, transparent and aligned with your sustainability and offsetting goals is an absolute must

How can individuals and businesses calculate their carbon footprint?

Before offsetting your emissions, you must calculate your net carbon footprint. This must be done to gauge how much you need to counteract to reach your emission goals, whether that’s net zero or net positive. You can calculate your footprint by gathering data on energy use, transportation, waste generation and other activities that generate GHG emissions. 

  1. Determine the scope: Currently, there are three scopes of emissions. Scope 1 is emissions that a company or individual emits directly—for example, burning fossil fuels for transportation or heating. Scope 2 is emissions that are indirectly generated, such as purchased electricity. Scope 3 is also indirect emissions but includes emissions generated throughout the lifecycle of the source. For example, manufacturing. 
  2. Collect data: collect all necessary data on energy consumption, fuel use, transportation, waste and all relevant activities. 
  3. Use a carbon calculator: enter data into a calculator to obtain results
  4. Verify your results: ensure the final number of correct and adjust data accordingly. This can also be done by a verified third-party organisation such as Toitu or Ekos.

Now that you have a figure, you can set reduction targets, identify areas for adjustment and develop a plan to achieve the targets. 

How can individuals and businesses choose a reputable carbon-offsetting provider?

It is important to choose a quality and legitimate offsetting provider. When researching options, consider the following: 

Credibility: the chosen offsetting provider should display transparency in the process and display verifiable evidence of the benefits that they claim to have. The provider should also obey standards such as the Verified Carbon Standard (VCS), the Gold Standard and the Biodiversity Standards (CCBS).

Permanence: the project should be long-term and lasting.

Verification: projects should be verified by a third party. This proves that they meet the requirements and their stated benefits. 

Social and environmental co-benefits: Projects should have co-benefits by having environmental and social benefits.

Price: carbon credit price should reflect the quality and extent of benefits of the projects and always be comparable to market prices

Transparency: The provider should have accessible information on fees and other financial information on the project. 

What are some criticisms of carbon offsetting, and how can they be addressed?

Greenpeace says it best "Airlines and oil companies love talking about carbon offsetting. But to be serious about tackling climate change, they need to stop carbon emissions from getting into the atmosphere in the first place." As with everything, offsetting comes with its criticisms and challenges. Here are the most common:

Over-reliance: as Greenpeace explains, there are many concerns that businesses and people are starting to rely too overly on carbon offsets when their first priority should be to reduce emissions at the source and through their own direct actions.

Additionality: some argue that offsetting with carbon credits is not a legitimate method as the said projects may have happened anyway, regardless of the carbon credit labels.

Permanence: Some argue that carbon offset projects are not permanent as projects are at risk of failure or can be reversible.

Lack of regulation: There is currently no international framework which leads to fraud threats and a lack of transparency in the industry. However, some are currently being established, such as the ICVCM.

To address these concerns, carbon-offsetting providers and buyers can take several steps:

  1. Ensure additionality: Providers must ensure that their projects result in real reduction due to the carbon credit funding. 
  2. Address permanence: Providers should establish ways to address project risks and failures, such as insurance. 
  3. Avoid over-reliance: Carbon offsetting should be promoted as an additional strategy to reduce emissions rather than the main solution.
  4. Adhere to standards: Choose projects that are certified by standards.
  5. Increase transparency: Providers must have evidence available to back their claims and show transparency in their projects if they wish to be considered legitimate.

How can carbon offsetting be used with other sustainability strategies to achieve a meaningful impact?

Carbon offsetting is by no means the only strategy for reducing carbon emissions and should not be treated as such. Investing in offsetting projects should always be in conjunction with other strategies. We must continue looking for ways to reduce emissions at the source, such as reducing energy consumption, using renewable energy, improving resource efficiency, implementing sustainable transport practices, and using carbon offsetting to counteract emissions that are nearly impossible to reduce. A strategy will only successfully mitigate climate change by using a combination of methods. A strategy should also use offsetting to engage various stakeholders, show a strong commitment to the environment, raise awareness and encourage others to follow suit. 


Finally, carbon offsetting is a way to minimise emissions that cannot be eliminated or lowered by people or businesses. It operates via a market system in which people or companies buy carbon credits to support initiatives that eliminate or reduce emissions, such as renewable energy, reforestation, or carbon capture and storage projects. Carbon offsetting offers a variety of advantages, including lowering GHG emissions, fostering sustainable development, supporting international climate action, enhancing reputation, and generating business prospects. However, it is not without criticism, including concerns about additionality, permanence, over-reliance and lack of regulation. It is crucial to pick a recognised carbon-offsetting provider that exhibits transparency, credibility, permanence, verification, social and environmental advantages, and reasonable pricing. Although carbon offsetting is a successful strategy for reducing emissions, it cannot act as the only reduction method, and we must continue to reduce emissions at the source as well.