What's the difference between Carbon Neutral and Net Zero?

A no-frills guide to Carbon Neutral, Net Zero and Carbon Positive
Csaba Szabo
5 mins

Despite often being used interchangeably, these terms have drastically different implications for the climate and in tackling rising emissions. In 2016, the world came together at the Paris Climate Agreement to pledge to keep global temperature rises below 2°C. 

For this agreement to reach fruition there must be a radical change on a global scale. Governments, individuals, and most importantly, businesses must play their part in reducing emissions - and quickly. 

To develop an effective plan, it’s important to understand emissions terminology. Pledging to achieve carbon neutrality, Net Zero or carbon positive, will require vastly different ideas and actions.

What is Carbon Neutrality?

A carbon-neutral company balances any carbon emissions it produces by removing an equivalent amount of carbon emissions from the atmosphere. 

The biggest problem with becoming carbon neutral is that it doesn’t require businesses to reduce emissions. Unless we lower emissions globally, the 1.5°C pledge becomes nothing more than a pipe-dream. Experts argue that becoming carbon neutral isn’t enough to protect our future. 

That hasn’t stopped big companies, such as Apple, from pledging to become carbon neutral. By 2030, Apple will balance its carbon emissions across its entire supply chain. 

An optimist might believe that business achieves carbon neutrality via carbon capture technology but this is still a while off. As carbon capture technology isn’t currently available on an industrial scale, carbon neutrality is achieved by offsetting emissions or buying carbon credits. 

Offsetting involves restoring natural environments such as forests and mangroves that remove CO2 from the atmosphere. Nature-based solutions are great as they protect and restore threatened habitats. However, companies may be misleading in how effective they are. The ‘restored’ area may take decades to absorb enough CO2 to offset emissions released. 

If a company has to choose between doing nothing or becoming carbon neutral, the latter is the way to go. However, it’s best viewed as a stepping-stone on the way to Net Zero carbon. 

Net Zero Carbon

Crucially, achieving Net Zero carbon requires a company to reduce its emissions as much as possible and to offset any unavoidable pollutants. Most businesses that take a Net Zero pledge aim to reduce their emissions by at least 90 - 95% by 2050.  

For businesses to find ways to eliminate unnecessary emissions, they must carefully analyse every step of their practises. Investment in restoring natural carbon sinks, like forests and wetlands, and emerging carbon capture technology can offset the remaining emissions.

Almost a third of the biggest companies in the UK, including Sainsbury’s, AstraZeneca and the BT group, have pledged to be Net Zero by 2050. However, not all of them account for every step of their supply chain thereby casting doubt over how committed they are to mitigating climate change. 

Recognising Fact From Fiction 

The Greenhouse Gas Protocol is a standardised framework for measuring emissions. It uses three categories to define emissions. 

  • Scope one relates to all emissions directly produced by the company, such as from delivery vans.
  • Scope two relates to all emissions indirectly produced by the company, such as from electricity.
  • Scope three relates to all other emissions, including those produced by suppliers and the product itself, once it’s in the hands of the consumer.

All too often, businesses fail to account for emissions from scope three. A collaboration of nonprofits and research centres designed the Net Zero Tracker, which assesses publicly made sustainability commitments. 

It found that companies regularly fall short of meeting their pledges. From a total of 2,000 of the biggest publicly-traded companies globally, 622 have pledged to reach Net Zero. However, Net Zero plans regularly omit emissions released from the supply chain, use questionable offsetting techniques, and use policies that don't do enough to create real change.

An essential part of a business plan to reach Net Zero is a detailed explanation of how they will cut CO2 emissions.

How do you Become Carbon Positive/Negative?

Carbon positive, also known as carbon negative, is when a company removes more carbon emissions from the atmosphere than they have personally produced. Their emissions have been drastically reduced to a fraction of what they were if any remains at all. It goes beyond Net Zero and actively protects and restores the environment. 

Bhutan was the first country to become carbon positive in 2017, thanks to its impressive forest coverage and booming sustainable energy sector. Over 70% of Bhutan is forested areas, which absorb three times as much carbon as the country produces. 


Becoming carbon positive is the best possible option a company can take to protect the planet now and in the future. Carbon positive involves them capturing even more carbon emissions than they create in the first place.

The next best option is a Net Zero carbon pledge. A company agrees to balance their carbon emissions produced with emissions absorbed out of the atmosphere whilst dramatically reducing their emissions. 

Similarly, a carbon-neutral business balances carbon emissions produced with emissions taken in, but there is no requirement to cut their total emissions. 

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