Origin Xero’s glossary breaks down complex carbon terminology, acronyms, and sustainability frameworks. Explore essential climate and carbon terms to gain the knowledge you need to become a carbon expert.
Additionality
A principle stating that the CO2 reductions or removals achieved by a project would not have occurred without the project's intervention.
Afforestation & Reforestation
Afforestation and reforestation are two strategies aimed at increasing the Earth's tree cover to combat climate change by natural means. Afforestation involves planting trees on lands that have not been forested for a long period, while reforestation involves replanting trees in areas where forests have been depleted, typically due to logging or fires. Both practices play a crucial role in sequestering carbon dioxide (CO2) from the atmosphere since trees absorb CO2 as they grow, thereby reducing the amount of greenhouse gases that contribute to global warming.
Biochar
Biochar is a form of charcoal produced from plant matter that can be intentionally stored in soil as a means of removing carbon dioxide (CO2) from the atmosphere. Unlike the charcoal used for heating and cooking, biochar is produced under specific conditions with the intention of storing it in soil as a means to sequester carbon for hundreds to thousands of years.
Biodiversity Credits
A market mechanism focussed on improving or maintaining biodiversity levels
Blue Carbon
Blue carbon refers to carbon captured by the world’s oceanic and coastal ecosystems, including mangroves, salt marshes, seagrasses, and kelp forests. These ecosystems are highly efficient at absorbing and storing carbon dioxide (CO2) from the atmosphere, often at a faster rate than land-based forests. The concept of blue carbon highlights the critical role that marine and coastal ecosystems play in mitigating climate change, making the conservation and restoration of these habitats essential.
Buffer Pool
A specified amount of carbon credits in a project that are reserved and not sold, to be used in the event of any unforeseen loss or damage that may occur to the project.
CO2, GHG, and CO2e
Carbon Dioxide (CO2) is a Greenhouse Gas (GHG) that is produced both naturally and through human activities. Carbon Dioxide Equivalent (CO2e) is a measure that is used to standardise and compare GHGs.
Carbon Accounting
The process of measuring and documenting the emissions of a company, entity, or product
Carbon Credits
Carbon credits are tradable certificates representing the reduction, avoidance, or removal of one tonne of CO2 from the atmosphere. They are used by companies to compensate for unavoidable emissions or to contribute towards global climate change mitigation efforts.
Carbon Disclosure Project (CDP)
The Carbon Disclosure Project, commonly referred to as the CDP, is a non-profit and global organisation that helps companies to disclose their environmental impact.
Carbon Neutrality
The state in which CO2 emissions are neutralised by an equal amount of CO2 being removed from the atmosphere.
Carbon Offset
A reduction in emissions that is achieved through external carbon avoidance or carbon removals, with the intention of compensating for residual emissions.
Carbon Removal vs Carbon Avoidance
Carbon removal actively extracts CO2 and GHG from the atmosphere, while carbon avoidance prevents future emissions.
Carbon Sequestration
The process of capturing atmospheric CO2 and storing it in a different form. It can be done through both natural means as well as man-made, technological means.
Co-Benefits
Any positive outcomes that a carbon credit project generates in addition to the primary goal of emission reductions or removals, aligning with social, environmental, and economic development goals.
Conservation
Activities and projects aimed at preserving ecosystems, biodiversity, and natural carbon stocks. This often involves protecting forests, wetlands, and other natural habitats from deforestation, degradation, and other threats.
Corporate Carbon Footprint
The total amount of both direct and indirect emissions generated by a company/organisation.
The Corporate Sustainability Reporting Directive (CSRD) is a new EU legislation that significantly extends the scope of sustainability reporting compared to the previously existing Non-Financial Reporting Directive (NFRD). It is not just a standard or guideline, but a directive that legally requires companies to report on their sustainability performance, encompassing environmental, social, and governance (ESG) aspects.
Credit Retirement
Permanently removing a carbon credit from circulation after it has been used to offset/neutralise emissions.
Decarbonisation
Decarbonisation refers to the process of reducing carbon dioxide emissions by minimising the use of carbon-based fuels and increasing the adoption of renewable energy sources, energy efficiency measures, and other technologies.
Double Counting
Double counting occurs when an emission reduction or removal is claimed more than once.
ESG
Environmental, social, and corporate governance, is a set of criteria through which a company can be measured in terms of its ethics and sustainability, providing a measure of the degree to which the company is futureproof, outside of simply its financial performance.
ESRS Standards
The European Sustainability Reporting Standards (ESRS) were developed as a crucial part of the Corporate Sustainability Reporting Directive (CSRD) to standardise and enhance transparency in sustainability reporting across the European Union.
European Emissions Trading System (EU ETS)
A regulatory system governing the compliance carbon credit market enforced by the European Union, where a cap is set on emissions, and the unused amount can be traded. This is separate to the Voluntary Carbon Market.
Fit for 55
A set of legislative proposals aimed at aligning the European Union with its ambitious climate targets, including an overall goal of achieving at least a 55% reduction in emissions by 2030.
GHG Protocol
The GHG Protocol, or the Greenhouse Gas Protocol, is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions.
Greenwashing
A deceptive marketing tactic of providing misleading information about how sustainable products, services, or practices are.
Hard-to-Abate Emissions
The residual emissions arising from sectors and processes where reducing emissions is particularly challenging.
Insetting
Integrating carbon offset projects directly into a company's own supply chain or operational process rather than investing in external projects.
Intergovernmental Panel on Climate Change (IPCC)
The Intergovernmental Panel on Climate Change (IPCC) is a United Nations body, established to assess scientific information on climate change.
Kyoto Protocol
The Kyoto Protocol was a previous international agreement that aimed to reduce the amount of carbon emissions and greenhouse gases in the atmosphere.
Leakage
Unintentional increase in emissions outside of a carbon credit project's scope that takes place as a result of the project's implementation.
Life Cycle Assessment
A framework for assessing the environmental impacts associated with all stages of a product's life cycle.
MRV and Digital MRV (Monitoring, Reporting, and Verification)
Carbon credit projects undergo continuous Monitoring, Reporting, and Verification (MRV) in order to assess their performance and maximise their integrity.
MRV and Digital MRV (Monitoring, Reporting, and Verification)
Carbon credit projects undergo continuous Monitoring, Reporting, and Verification (MRV) in order to assess their performance and maximise their integrity.
Methodology
Methodologies in the voluntary carbon market act as comprehensive procedures that guide the calculation, reporting, and verification of carbon credit projects. These guidelines are crucial for maintaining the integrity and transparency of carbon markets, providing a standardised approach to quantifying the environmental impact of projects. This ensures that carbon credits are backed by real, measurable, and verifiable reductions and removals.
Mitigation Hierarchy
A structured approach for companies to minimise their emissions, aligning with the path to achieving Net Zero targets.
NFRD
The Non-Financial Reporting Directive (NFRD) is a part of European Union legislation that mandates large companies to disclose non-financial and diversity information.
Nature-based Solutions vs Engineered Solutions
Nature-based Solutions (NbS) make use of natural processes and ecosystems to mitigate climate change, and Technological-based Solutions (TbS) make use of engineered processes and innovative technologies to mitigate climate change.
Net Zero
The state where the residual amount of CO2 or GHG emissions have been neutralised by an equivalent amount that of emissions that have been removed.
Offtake Agreements
Offtake agreements are contractual arrangements between a seller and a buyer to purchase a project's future production. For carbon credit projects, these agreements provide companies with a guaranteed price and security in supply that might become scarce, while creating an opportunity for carbon projects to secure much-needed funds for the maintenance and upkeep to their proof of future sales, offering financial stability, and guaranteeing a future market for the project's outputs.
Oxford Principles
A framework designed to ensure the integrity and effectiveness of carbon offsetting efforts as part of wider strategies to achieve Net Zero emissions.
Offset
Carbon offsetting is the process of removing carbon dioxide or other greenhouse gas emissions from the atmosphere. This process can take shape in many different ways.
Paris Agreement
An international treaty marking a collective commitment of 196 countries to combat climate change and adapt to its effects.
Paris Agreement - Article 6
A section of the Paris Agreement dedicated to creating both market and non-market mechanisms to promote international collaboration for climate action.
Peatland Restoration
Peatland restoration returns degraded peatlands to their natural state, halting carbon emissions and restoring their role as crucial carbon sinks.
Permanence
The longevity and durability of the emission reductions or removals of a project, based on the risk that the sequestered carbon could be re-released.
Project Developer
The entity responsible that may own, develop or manage the projects that actively remove, reduce, or avoid emissions.
Registry
A database that documents the issuance, sale, transaction history, and retirement of carbon credits.
Residual Emissions
The greenhouse gas (GHG) emissions that remain after all feasible measures to reduce a company's carbon footprint have been implemented.
Science Based Targets initiative (SBTi)
A globally recognised framework that helps companies set science-based emission reduction goals designed to limit global warming to 1.5°C above pre-industrial levels, in line with the goals of the Paris Agreement. The SBTi plays a crucial role in driving corporate action toward meaningful and measurable reductions in greenhouse gas (GHG) emissions.
Scope 1, 2, and 3 Emissions
Scope 1 emissions includes direct emissions from a company's operations, Scope 2 includes emissions from electricity usage, and Scope 3 includes all indirect emissions within the company's value chain.
Scope 1
Scope 1 emissions come directly from the source of industrial production or vehicles
that are used in a company, including all sources of non-renewable energy as well – such as the energy required to run the office.
Scope 2
Scope 2 emissions are any emissions created by power consumption – like the electricity necessary to run the air conditioning.
Scope 3
Scope 3 emissions are the rest of emissions that are produced that don’t fall under scope emissions 1 or 2.
Soil Carbon Sequestration
Soil carbon sequestration involves removing CO2 from the atmosphere and storing it in soil, enhancing soil health and aiding in climate change mitigation.
Sustainable Development Goals (SDGs)
A global initiative adopted by the UN comprising of 17 interconnected goals designed to achieve a more sustainable future by 2030.
Unavoidable Emissions
The residual emissions that cannot be eliminated due to technological limitations or integral process requirements.
The Voluntary Carbon Markets Integrity Initiative (VCMI) helps companies make credible and transparent claims about their carbon credits and contributions towards climate targets. It was established to address concerns about the integrity of voluntary carbon markets and ensures that these markets contribute meaningfully to net zero targets by providing clear, science-based guidelines for corporate climate actions.
Vintage
A project's vintage refers to the year in which the emission avoidance or removal took place and the carbon credits were issued.
Voluntary Carbon Market (VCM)
The Voluntary Carbon Market (VCM) is a mechanism that enables organisations and individuals to purchase carbon credits to neutralise their emissions. These carbon credits are generated from projects that either reduce, avoid, or remove emissions from the atmosphere through activities such as reforestation, biochar, blue carbon, and enhanced weathering.
