How to cut emissions and meet sustainability standards
If your organisation aims to set sustainability targets and reduce emissions (or has started that process already), you may have heard of the Oxford Offsetting Principles (OOPs)*. The Oxford Offsetting Principles are a framework for a best practice approach to buying carbon credits, as part of a strategy for achieving net zero (see ‘What’s net zero?’ below).
Academics at Oxford University created the OOPs as a response to the climate modelling work of the United Nations’ Intergovernmental Panel on Climate Change (IPCC). However, many other institutions and coalitions have produced alternative guidelines – e.g. the Science-Based Targets initiative (SBTi) – and there’s considerable debate about definitions and the most effective approach to take.
Amidst this complexity, a growing number of organisations are referencing the OOPs (and the SBTi and similar frameworks) to guide their sustainability journeys. That’s because these businesses recognise the commercial, moral and environmental imperative of doing something – and doing it now.
To support the shift towards widely accepted guidance such as the OOPs, this article aims to summarise them. In doing so, we outline what they mean for us as a company and hope to clarify how they can help your organisation decarbonise and meet its targets.
If you’d prefer to reference the original Principles in full, you can read the latest version of them (updated in February 2024) here.
What are the four Oxford Offsetting Principles?
Principle one: cut emissions, use high quality carbon credits, and regularly review your offsetting strategy as best practice evolves.
If you’re serious about decarbonising, you should reduce – as far as possible – the volume of your organisation's greenhouse gas (GHG) emissions, which some refer to as ‘carbon emissions’. This means, as a first step, getting the data to establish a baseline by quantifying your organisation’s carbon footprint.
With the baseline in place, you can then set targets – and plan the actions required – for making the reductions over time. At some point in your decarbonisation journey, your plan will need to involve your suppliers, and others in your ‘value chain’, measuring and reducing their emissions too.
This collective approach will ensure that other organisations in the chain, both ‘downstream’ and ‘upstream’ of your position, are also heading towards net zero.
What’s net zero?
Put simply, ‘net zero’ is a state in which the greenhouse gases going into the atmosphere are balanced by removal out of the atmosphere.
Reaching net zero will mean reducing your emissions (including those from your supply chain) and removing your hard to abate emissions too. These hard to abate emissions are emissions that are prohibitively costly or impossible to reduce with current technology. There will always be hard to abate emissions, even once net zero has been reached.
Let’s assume your organisation has set a target of achieving net zero by 2030 or 2035. If you have any emissions remaining at that date, they should only be the hard to abate ones – you’ll have reduced and eradicated all others. In that scenario, you’ll only be able to reach net zero by buying durable carbon removals on a 1:1 ratio. This will mean you’re counterbalancing your remaining emissions with an equivalent amount of removed carbon dioxide (CO2).
In other words, net zero won’t be possible without there being durable carbon removals in place alongside a market for their associated credits.
For more information on net zero, see the Oxford Net Zero website.
Achieving net zero
In the race to net zero, it may be easier to achieve some targets compared to others. For example, you could start by reviewing your electricity supply contract before it’s due to end. If you’re using power sourced from fossil fuels, you could switch to a new contract that only relies upon renewable electricity. Doing so would effectively reduce your emissions related to the power you use.
However, some emission reductions will take longer to achieve or may not even be possible in the foreseeable future. As mentioned earlier, these are your hard to abate emissions. You can counterbalance them by starting to purchase high quality carbon credits such as durable carbon removals. Principle two – see below – outlines the different types of credit available on the Voluntary Carbon Market (VCM) and we’ll cover this topic in more detail in a future article.
Several factors contribute to a credit being ‘high quality’, including that’s it’s verifiable. This means that each credit should signify the removal of one tonne of carbon dioxide (CO2) – or equivalent GHGs – from the atmosphere and the durable storage of that CO2. Scientists measure durability on the length of time they expect the CO2 to remain safely stored.
In addition, high quality credits need to follow best practice, ensuring social and environmental integrity. Since standards and best practice are constantly evolving, you’ll need to review – and potentially change – your credits portfolio accordingly. But this shouldn’t deter you from entering the market sooner rather than later, since there are sound commercial and environmental reasons for doing so.
You should also be transparent in your approach. This means sharing details of your emissions and how your organisation accounts for them, as well as publicising your reduction and removal targets. This transparency will also involve announcing what types of credits you’re using to help achieve those goals.
Principle two: switch to carbon removal credits
Currently, most of the carbon credits available on the market only help to reduce carbon emissions overall; they don’t remove carbon from the atmosphere.
To help you better understand the differences, we’ve created our own version of a helpful classification diagram from the revised OOPs (it’s referenced as Figure 1 in that document).
The diagram differentiates between projects that reduce carbon dioxide emissions (on the left) and those that remove carbon completely (on the right). It also shows whether any captured carbon is stored in the biosphere or geosphere. To indicate the durability of any carbon storage that takes place, the shading changes from lighter (no storage, or storage for a short period) to darker (storage for a longer period). Principle three – outlined below – looks at the shift towards more durable storage.
Carbon removals will be essential in helping organisations, the UK and other countries achieve net zero and, in the process, mitigate global warming in the second half of the century. The IPCC concluded the need for net zero CO2 by 2050 to remain consistent with achieving a maximum 1.5°C rise in global temperature.
Principle three: switch to long-lived storage
Once the carbon’s removed from the atmosphere, it’s important to ensure it’s not re-released. This means storing it safely. Storage can be:
- Short-lived: uncertain or with higher risk of being reversed in decades
- Long-lived: low risk of reversal in centuries to millennia
Long-lived storage (at Drax, we use the term ‘durable storage’) might include geological reservoirs such as those included in the Humber Cluster. Or it may involve chemical reactions that convert CO2 into stable minerals.
This Principle clearly indicates that every organisation’s carbon strategy should – over time – favour carbon removals over emission reduction, and long-lived storage over short-lived storage.
However, the carbon removals market is still in its infancy and projects creating carbon dioxide removals (CDRs) are far less prevalent than carbon reduction projects. So, purchasing the CDRs available now will stimulate and expand the market, bring down costs of CDRs, and help address today’s emissions. However, if the market is stagnant and the supply of CDRs remains limited, credit prices will probably rise and make expansion potentially less likely. As well as being bad for organisations, such an outcome would also be bad for the world.
Principle four: support the development of net zero aligned offsetting
So, if humanity is going to achieve net zero, we need massive growth in the market for carbon removals with geological storage. In addition, the associated CDRs must follow best practice.
Credits need to come down in cost too and, for this to happen, organisations must start buying them now. This will create a demand signal for project developers, increasing the number of CDR projects and credits, and helping to stabilise prices.
The revised OOPs document includes several actions – summarised below – that organisations can take to support growth in the carbon credits market:
- Work collaboratively – create and sustain alliances (across and between sectors or industries) to ensure movement towards a common goal of aligned projects that benefit everybody involved
- Take a holistic view – support the protection and restoration of multiple ecosystems, to help reduce and remove carbon while supporting net zero targets, which advances wider social and environmental benefits
- Adopt and publicise the Principles – incorporate the OOPs into your corporate strategies, industry regulations and standards, then popularise them to help energise the market while also increasing the chance of a broader, more consistent adoption
- Provide certainty to developers – use long-term agreements that are bankable and investable to de-risk project finance, help reassure developers, and support them in raising capital
Want to talk about how your organisation can lean on the OOPs and start to decarbonise?
*The February 2024 version of the document is called ‘Oxford Principles for Net Zero Aligned Carbon Offsetting’ or, in short, ‘Oxford Offsetting Principles’. It’s worth noting the authors acknowledge that some organisations are moving away from the term ‘offsetting’. However, the revised Principles – like the original document – aim to establish clear (though voluntary) requirements for ensuring the integrity of any carbon credits organisations use to counterbalance their emissions.