Carbon Offsets & Emissions: The Complete Guide (2026)

Carbon offsets and emissions accounting are two of the most misunderstood topics in climate action. This guide is the single reference you need: every core concept defined, every standard explained, every common objection answered, with citations to the peer-reviewed and primary sources behind each claim. It's written for individuals, small teams, and anyone evaluating whether — and how — to use carbon credits in a credible climate strategy.

1. What is a carbon offset?

A carbon offset — also called a carbon credit — is a verified, tradeable certificate representing the reduction, avoidance, or removal of one metric tonne of carbon dioxide equivalent (1 tCO₂e) from the atmosphere. CO₂e is a unit that normalizes different greenhouse gases against CO₂ using their 100-year global-warming potential; one tonne of methane, for example, is counted as 28 tCO₂e under IPCC AR6 values.

The concept dates to the 1997 Kyoto Protocol, which introduced the Clean Development Mechanism — the first international framework allowing rich countries to finance emission-reducing projects in developing ones and count the reductions against their own targets. The modern voluntary carbon market (VCM) grew out of that framework and now handles the bulk of non-government climate financing, worth an estimated $2 billion in 2023.

2. How carbon offsets actually work

The life cycle of a credit runs through five stages:

1. Project design. A developer (forestry cooperative, technology company, landowner, cookstove distributor, etc.) designs an activity that will reduce or remove greenhouse gases.
2. Methodology. The project applies an approved methodology — a peer-reviewed protocol defining how emissions will be quantified, what the baseline (business-as-usual scenario) looks like, and what monitoring is required.
3. Validation. An accredited independent auditor (a Validation & Verification Body, usually DNV, SCS, Bureau Veritas, or similar) reviews the design against the methodology.
4. Issuance. After the project operates and reports data, the auditor verifies the actual tonnes reduced or removed. A registry (Verra/VCS, Gold Standard, etc.) then issues one credit per verified tonne, each with a unique serial number.
5. Retirement. When someone claims the climate benefit, the credit is retired — permanently removed from circulation and logged publicly in the registry so it can never be sold or claimed again. This is the step that turns a credit into an offset.

Every tonne you offset through Coffset is retired on your behalf on a public registry (usually Gold Standard, Verra/VCS, or Puro.earth for durable removals), and we issue you a certificate with the serial number so anyone can independently verify the retirement.

3. Scope 1, 2, and 3 emissions explained

The Greenhouse Gas Protocol — the most widely adopted corporate accounting standard, used by more than 90% of Fortune 500 companies — divides emissions into three scopes:

Scope 1 — Direct emissions

Anything you burn or leak yourself: company cars, natural-gas boilers, refrigerant leaks, on-site generators. For an individual, this is mostly your car's tailpipe and your heating system.

Scope 2 — Purchased energy

Emissions from electricity, district heating, or steam that you buy. You didn't burn the fuel, but you caused the utility to. Switching to renewable-backed contracts (or installing solar) is the primary Scope 2 reduction lever.

Scope 3 — Everything else

All emissions in your value chain — flights, supplier manufacturing, purchased goods, employee commuting, end-of-life disposal, investments. For most service companies (and most individuals), Scope 3 is the largest bucket by a wide margin, often 70–90% of the total footprint per GHG Protocol Scope 3 data.

Why this matters for offsetting: you cannot credibly offset what you haven't measured. Our free carbon footprint calculator walks individuals through a complete Scope 1+2+3 estimate in about five minutes, using country-specific emission factors published by DEFRA (UK), EPA (US), and ADEME (France).

4. Offsets vs. removals vs. avoidance

This is the single most important distinction in the market, and the one most commonly confused. A credit can represent one of three very different climate actions:

Type	What it does	Examples	Permanence
Avoidance / reduction	Prevents emissions that would otherwise have occurred	Avoided deforestation (REDD+), clean cookstoves, methane capture from landfills	Short to medium (years–decades)
Nature-based removal	Pulls CO2 out of the air via biology	Afforestation, reforestation, mangrove restoration, soil carbon	Medium (decades, reversal risk)
Engineered / durable removal	Pulls CO2 out of the air via technology or geology	Direct Air Capture + storage (DAC), enhanced weathering, biochar, mineralization	Long (100–10,000+ years)

The IPCC AR6 Synthesis Report (2023) is explicit that reaching net-zero requires both deep emission reductions and large-scale removals — not one or the other. We explore this distinction in depth in our separate guide: carbon offsets vs. carbon removals — which one actually works?

5. The 5 criteria of a high-quality carbon credit

A credit is only as good as the project behind it. The Integrity Council for the Voluntary Carbon Market (ICVCM) codified the consensus standards in its 2023 Core Carbon Principles. The short version — what to check before buying:

1. Additionality. Would the emission reduction have happened anyway? If a forest was going to be protected regardless (say, because it's inside a national park with enforcement funding), the credit isn't "additional" and represents no real climate benefit.
2. Permanence. How long does the carbon stay out of the atmosphere? A 20-year tree-planting contract is a very different product from a 1,000-year geological storage contract. Both have roles, but they should not be priced or claimed identically.
3. Measurability. Can the tonnes be quantified with transparent, reproducible methods? Avoid projects relying on opaque proprietary models.
4. No leakage. Does protecting this forest push logging into a neighboring one? Does distributing efficient cookstoves simply shift fuel consumption? Leakage must be estimated and subtracted.
5. Independent verification. Issuance must be conditional on audit by an accredited third party, and the audit report must be public. Verra, Gold Standard, and Puro.earth all meet this bar; legacy CDM projects are mixed; "self-certified" credits should be avoided entirely.

6. Standards and registries you should know

The alphabet soup of the carbon market maps to a small number of organizations that actually matter:

• Verra / VCS — the largest voluntary standard by volume (~70% of market). Broad project coverage but quality varies; check the specific methodology.
• Gold Standard — co-founded by WWF, smaller catalog, generally higher average quality with mandatory SDG co-benefits.
• Puro.earth — the leading registry for engineered / durable removal (biochar, enhanced weathering, DAC). Minimum 100-year permanence.
• American Carbon Registry (ACR) and Climate Action Reserve (CAR) — US-focused, often used for compliance markets like California Cap-and-Trade.
• ICROA — not a registry, but an industry body that maintains a code of best practice for offset retailers. Buying through an ICROA-endorsed retailer adds a layer of assurance.
• Science Based Targets initiative (SBTi) — sets the standards for corporate net-zero claims. Its Corporate Net-Zero Standard specifies that offsets can only be used for residual emissions after a ≥90% absolute reduction.

7. Project types, ranked by integrity

Not all project categories have the same track record. A rough ranking based on current academic and investigative consensus (2024–2026):

1. High integrity: engineered removals with geological storage (DAC, mineralization, enhanced weathering), biochar with verified soil incorporation, direct-methane-destruction projects at landfills and coal mines.
2. Generally sound with careful selection: improved forest management on public lands, mangrove restoration, grid-connected renewables in grids still dominated by fossils, community-led afforestation with long-term tenure.
3. Variable — due diligence required: avoided deforestation (REDD+) — quality varies by a factor of 10× between projects; cookstove programs — baseline assumptions are frequently inflated (Nature Communications, 2024); large monoculture plantations with unclear tenure.
4. Avoid: "renewable energy certificates" repackaged as offsets in markets where renewables are already the lowest-cost option (no additionality); credits without public registry records; anything pre-CORSIA that hasn't been re-verified.

8. The mitigation hierarchy: measure, reduce, offset

Every credible climate framework — the GHG Protocol, SBTi, ISO 14068 (Carbon Neutrality), and PAS 2060 — enforces the same order of operations, called the mitigation hierarchy:

1. Measure. Quantify Scope 1, 2, and 3 emissions using a recognized standard. You can't reduce what you don't count.
2. Avoid. Don't create the emissions in the first place (skip the flight, design the product without the plastic, hire locally).
3. Reduce. Cut the emissions that remain (efficiency, electrification, renewables, behavior change).
4. Offset the residual. The remaining emissions that genuinely cannot be eliminated today — use high-integrity credits, with a progressively higher share coming from permanent removals as you approach 2050.

Using offsets before steps 1–3 is known as "offset-first" or "greenwashing by credit" and is explicitly rejected by every major framework. Coffset is built around this hierarchy — when you finish our footprint calculator, the result page walks you through reductions you can make before suggesting credits for the residual. Ready to go further? Buy verified carbon credits for your residual emissions in a single checkout.

9. What claims can you legally and ethically make?

Terminology here has real legal weight. The UK's CMA Green Claims Code, the EU's Green Claims Directive, and the US FTC Green Guides all tightened enforcement in 2023–2025. The current best practice:

• Use "compensated" or "financed removal of" in preference to "neutral" or "climate positive" unless you can fully document every methodological assumption.
• If you claim "carbon neutral", you must meet ISO 14068 or PAS 2060: full boundary definition, a public QES (Qualifying Explanatory Statement), and annual re-certification.
• Do not use the word "offset" for anything you haven't retired. A purchase order or a forward contract is not an offset.
• Transparency beats perfection. Saying "we reduced our operational emissions 42% and financed the verified removal of our remaining 58% through Gold Standard–registered projects" is stronger than "carbon neutral" with no detail.

10. Common criticisms, honestly addressed

The voluntary carbon market has been under sustained, often justified scrutiny. The responsible answer is to acknowledge the critiques and explain where the market has changed.

"Offsets are a license to pollute."

Not when used within the mitigation hierarchy. The evidence — including a 2023 Nature Climate Change study of 7,000+ companies — shows that companies buying offsets reduce their own emissions faster than comparable non-buyers, not slower. The tool itself is neutral; how it's used decides whether it helps or harms.

"Most credits are junk."

Investigative reporting by The Guardian and Die Zeit in 2023 surfaced serious over-issuance problems in specific older REDD+ methodologies. Verra has since retired those methodologies (VM0007, VM0009) and replaced them with a single consolidated protocol (VM0048) with much tighter baselines. ICVCM's Core Carbon Principles add an independent integrity layer on top. The market in 2026 is demonstrably higher-quality than the 2020 market — but it still requires buyer diligence.

"You can't measure what trees really sequester."

Forestry measurement has substantial uncertainty — but that uncertainty is now quantified and subtracted via buffer pools (10–30% of every credit held back as insurance against reversals). Engineered removals like DAC are measured at the meter level; ambiguity there is under 2%.

"Direct reductions are always better."

In isolation, usually yes. But many emissions are genuinely hard or impossible to eliminate with current technology (aviation, heavy industry, agriculture), and the atmosphere doesn't care who paid for the tonne. A marginal euro spent on a high-quality credit in a developing-country grid often buys more mitigation than the same euro spent on an already-efficient operation in Europe.

11. Practical steps for individuals and teams

For someone who wants to act in the next hour, not the next year:

1. Measure your footprint. Use our free calculator or a recognized alternative. Save the PDF.
2. Identify your top-three reduction levers. Transport, diet, and home energy dominate for most individuals. For teams, typically it's business travel, electricity, and purchased goods.
3. Commit to a time-bound reduction target. Even a rough one (e.g. "-30% by 2028") is dramatically better than no target.
4. Offset the residual through a verified retailer. Buy verified carbon credits directly — each one is retired on a public registry on your behalf and delivered with a serial-numbered certificate. See our impact portfolio for the specific projects we use. We recommend a blended portfolio: 70% high-quality avoidance/nature-based, 30% durable engineered removals, adjusted annually toward more removals as they scale.
5. Re-measure annually. A climate strategy without recurring measurement is a marketing strategy.

FAQ

How much does it cost to offset one tonne of CO₂?

In 2026, high-integrity nature-based credits typically cost €10–€40 / tCO₂e. Durable engineered removals (DAC, enhanced weathering) are substantially more expensive, €150–€600 / tCO₂e, reflecting their cost to produce. Credits below €5 are almost always low-integrity and should be avoided.

How much CO₂ does the average person emit per year?

Based on IEA data: United States ~15 tCO₂e, Germany ~8 t, United Kingdom ~7 t, Spain ~6 t, France ~5 t (nuclear grid), India ~2 t, global average ~4.7 t. A 1.5°C-compatible per-capita budget by 2030 is approximately 2.3 t.

Is offsetting the same as carbon neutrality?

No. Carbon neutrality requires measuring all scopes, reducing wherever possible, and offsetting only the residual — plus formal certification to ISO 14068 or PAS 2060. Buying offsets without the measure-and-reduce steps is not carbon neutrality and should not be marketed as such.

Can I trust Verra / Gold Standard credits?

Generally yes, but verify the specific project, not just the registry. Every credible registry has produced some lower-quality credits historically. Check the methodology version, the buffer pool contribution, and — ideally — whether the project is also ICVCM CCP-approved. Our impact portfolio publishes the retirement record for every credit we deliver.

What's the difference between voluntary and compliance markets?

The compliance market is regulatory — companies in covered sectors (power, aviation in the EU, etc.) are required to hold allowances or credits to match their emissions. The voluntary market is everything else: businesses and individuals choosing to offset beyond legal requirements. Coffset operates entirely in the voluntary market.

Do offsets delay real decarbonization?

Not when used within the mitigation hierarchy. The peer-reviewed evidence shows the opposite — companies that offset reduce faster than those that don't. The risk is real only when offsets are used as a substitute for direct action, which is why SBTi caps offset use at 10% of residual emissions for net-zero claims.

What project should I support?

If you want maximum confidence: a blended portfolio of 70% high-quality nature-based (mangrove restoration, improved forest management, biochar) and 30% engineered durable removal (enhanced weathering, DAC). This balances cost, co-benefits, and permanence. Our impact portfolio page shows exactly which projects fit this profile in the current quarter.

Take action

• Measure → Free carbon footprint calculator
• Offset → Buy verified carbon credits from €40/tCO₂e
• Explore → Our impact portfolio and active projects

Keep reading

• Carbon offsets vs. carbon removals — which one actually works?
• Browse all articles in the Carbon Learning Center

Last updated: 22 April 2026. Sources: IPCC AR6 (2023), GHG Protocol, Verra, Gold Standard, Puro.earth, SBTi Corporate Net-Zero Standard v1.2, ICVCM Core Carbon Principles (2023), Nature Climate Change (2023), Ecosystem Marketplace State of the VCM (2023), IEA CO₂ Emissions in 2023. This article is reviewed and updated at least annually.