Pathways to Carbon Neutrality & Net-Zero Explained

Let’s start with a side note…

Right off the bat, we want to say that the information in this article is for educational purposes only. We’re here to inform you of certain certified pathways and frameworks available that you can use to get closer to successfully delivering on your net-zero targets or achieving carbon neutrality. 

Every business, and its journey toward net-zero or carbon neutrality, is different. We suggest exploring further research or even engaging ESG industry experts to make sure you have ticked off your necessary due diligence to make sure your emission reduction plan is credible!

…now back to the article!

“Carbon neutral” & “net-zero” are two terms being thrown around at present. So, how do you define net-zero & carbon neutral and is there a difference between the two terms?

Definitions can get a bit hazy when trying to describe these two terms and they are usually used interchangeably. However, it’s important to note that both terms relate to the same purpose, which is emission reduction.

According to the IPCC Special Report: Global Warming of 1.5°C, the definitions of the terms are as follows:

Net zero emissions are achieved when emissions of any greenhouse gases caused by human activity to the atmosphere are balanced by human removals of emissions over a specified period.

Net zero CO2 emissions (known commonly as carbon neutrality) are achieved when CO2 emissions caused by human activity are balanced by the concentrated efforts to remove CO2 over a specified period.

So, when referring to IPCC’s definitions above, our understanding of how the two terms differ is that net zero speaks to the removal & offsetting of ALL greenhouse gas emissions whilst carbon neutrality specifically speaks to the removal & offsetting of CO2 emissions.

Let’s set the scene with the Paris Agreement 

To understand the background of Australia’s emission-reduction targets, we need to travel back to 2015 to the Paris Agreement. The Paris Agreement is defined by the United Nations Framework Convention on Climate Change as a legally binding international treaty on climate change. It was adopted by 196 Parties at COP 21. 

In a nutshell, the requirements of the Paris Agreement were:  

• Reduce global greenhouse gas emissions to limit the global temperature increase in this century to 2°C while pursuing efforts to limit the increase even further to 1.5°C.
• Review countries’ commitments every five years.
• Provide financing to developing countries to mitigate climate change, strengthen resilience and enhance abilities to adapt to climate impacts.

Essentially, the Paris Agreement creates the groundwork for country-based emission reduction targets and the plan to achieve them. Ergo, Australia’s new Climate Bill.

What is the Australian Climate Bill and how does it link to emission reduction targets?

Back in August, the Albanese Government’s Climate Change Bill 2022 was passed by the House of Representatives. Once through the Senate, the climate bill will legally bind Australia’s two national greenhouse gas emissions targets: a 43% cut below 2005 levels by 2030, and a reduction to “net-zero” by 2050. 

Why does it matter?

By legislating emissions reduction targets, the climate change bill means that:

• The government means business in the matter of reaching their emission reduction & net-zero targets.
• A reporting process that will track progress toward those targets will be mandated.
• It’s becoming increasingly important for businesses to have certified decarbonisation or net-zero transition plans in place.

The role of carbon farming projects in emission reduction

A carbon farming project is a huge opportunity for farming businesses to demonstrate quantitative data to back their claims of carbon neutrality. 

By undertaking a carbon project, you can effectively measure how many tonnes of CO2e you are removing from the atmosphere and storing across your farm or quantify emission reduction achieved by way of improved management practices. 

This makes it easier for farming businesses to: 

• Measure their steps towards emission reduction
• Hit their carbon-neutral targets
• Meet the expectations of their stakeholders.

However, how can you make sure your farming operation’s emission reduction strategy is credible? Two well-regarded frameworks include Climate Active and the Science Based Target initiatives. 

Climate Active and how they can certify carbon neutrality

Climate Active is a government-backed program that can award a carbon-neutral certification to Australian brands. Climate Active is responsible for issuing and regulating the Carbon Neutral Standard within Australia and claims to operate within one of the most rigorous frameworks in the world.

The Climate Active certification is available for:

• Organisations
• Products
• Services
• Events
• Buildings
• Precincts

How can your brand become carbon neutral under the Climate Active framework? 

Being certified by Climate Active is an approach that companies can take to show their steps towards decarbonisation. 

Basically, under Climate Active’s framework to become carbon neutral, Australian brands need to complete the following steps.

1. Calculate the greenhouse gas emissions generated by your activity, such as fuel or electricity use and travel.
2. Reduce these emissions as much as possible by investing in new technology or changing the way they operate.
3. Purchase carbon offset units (such as carbon credits) or invest in carbon offset projects that equal the remaining emissions your company is producing.

(Source: Climate Active)

This is a big plus for landholders looking to undertake a carbon farming project

398 Australian brands are currently certified under the Climate Active framework, with that number expected to grow rapidly. That’s a lot of offsets. 

Earlier this year, the Australian government legislated a requirement that any participants in the federal government’s Climate Active program who rely on carbon offsets will need a minimum of 20% Australian Carbon Credit Units (ACCUs) to make up their carbon-neutral certification. 

In other words, the more companies/organisations that sign up for credible emissions reduction targets = the greater the demand for ACCUs = the higher the carbon price = good news for landholders.

Keeping the Australian carbon market credible

After some scrutiny earlier this year, the Australian Government called for an Independent Review of ACCUs (known informally as ‘The Chubb Review’) led by Ian Chubb. The Chubb Review will ensure that the ACCU market in Australia is credible and robust. This is super important to the carbon market’s continued success, as well as the success of efforts to reduce emissions more broadly.

The intention of the review is to provide confidence that the Australian carbon market & ACCUs, specifically those accrued through specific ACCU Scheme methodologies, can support the Australian government’s new emission reduction targets. 

You can learn more about the review here.

The Science Based Target initiatives (SBTi)

One key global framework is the Science Based Targets initiative (SBTi) which companies can use to set science-based greenhouse gas emissions reduction targets. The SBTi provides a solid framework that scientifically measures and qualifies an organisation’s emission reduction target.

Science-based targets provide companies with a clearly defined path to reduce emissions in line with the Paris Agreement goals.

According to SBTi’s website, more than 3,000 businesses and financial institutions are working with the Science Based Targets initiative (SBTi) to reduce their emissions in line with climate science. This includes 69 Australian companies. 

How can you set a science-based target? 

According to the SBTi website, setting a science-based target is a five-step process.

1. Commit: submit a letter establishing your intent to set a science-based target
2. Develop: work on an emissions reduction target in line with the SBTi’s criteria
3. Submit: present your target to the SBTi for official validation
4. Communicate: announce your target and inform your stakeholders
5. Disclose: report company-wide emissions and track target progress annually

Check out SBTi’s website for a more comprehensive breakdown of these steps. 

How CFF can help you? 

Here at CFF, we believe that farming businesses are the heroes of net zero. As more Australian farming operations strive toward carbon neutrality or see the demand from other sectors to prove carbon neutrality, our purpose is to make it simpler and cheaper for landholders to integrate profitable carbon crops into their farming business.

We think that farmers should be rewarded for continually progressing towards more sustainable and efficient production and ultimately for leading the world towards net-zero. That’s why we think landowners should come away with 100% of the carbon credits from their carbon crops.

And with more carbon credits in their pocket, we are helping Australian farming businesses achieve their emission reduction targets. 

Ready to find out more?

Explore our range of educational resources in our Carbon Farming Education Hub where we frequently publish educational articles, webinars, and guidebooks. 

When you’re ready to explore the feasibility of undertaking a carbon project on your property, email us at [email protected] or give us a bell at (08) 6835 1140 to be connected with one of our project facilitators.