What are the different Carbon Credit options to offset emissions?

Renewable energy

• Investing in renewable energy technologies - carbon offsets commonly involve investing in wind power, solar power, hydroelectric power and biofuel.
• Renewable energy credits (REC) - In comparison to a carbon offset which represents a reduction in greenhouse gas emissions, a REC represents a quantity of energy produced from renewable sources. RECs can be seen as offsets in that they represent carbon reductions by assuming that the clean energy is displacing an equivalent amount of conventionally provided electricity.

Methane abatement

Some offset projects involve the combustion or containment of methane generated by:

• Livestock -Certain types of animals release methane, either directly through gaseous exchange or from manure. A new form of offset product has arisen where these emissions can be reduced or collected, particularly where manure is stored in lagoons for future use as fertilizer. These products are not widely available in the Australian market at this time.
• Landfill - Decomposting matter emits a range of greenhouse gases including methane. Methane emitted from landfills can be captured and then flared into the atmosphere, or burnt to generate energy. These offset products are often cheap and the technology is well-developed, however there are questions about whether they are 'additional' to business as usual, and as such considered true carbon offsets.
• Coal - Methane emitted from coal mines can also be captured and then flared into the atmosphere, or burnt to generate energy.

Energy efficiency

Energy conservation projects seek to reduce the overall demand for energy. Carbon offsets in this category fund projects such as:

• Cogeneration - A system in place which captures and utilises the heat which is emitted from generating energy.
• Fuel efficiency projects - involve replacing a combustion device with one which uses less fuel per unit of energy provided. Assuming energy demand does not change, this reduces the amount of carbon dioxide emitted.
• Energy-efficient buildings - reduce the amount of energy wasted in buildings through efficient cooling, heating or lighting systems. New buildings can also be constructed using less carbon-intensive input materials.

Land use, land-use change and forestry

Land use, land-use change and forestry projects focus on natural carbon sinks such as forests and soil. Projects include:

• Afforestation - is the process of creating new forests on land that was previously un-forested, typically for longer than a generation.
• Reforestation - is the process of restoring forests on land that was once forested.
• Avoided deforestation - is the protection of existing forests.
• Soil management projects - aim to preserve or increase the amount of carbon sequestered in soil e.g. chemical versus mechanical tillage.

Destruction of industrial pollutants

Offset products may target greenhouse gases other than carbon dioxide, which are associated with industrial processes, such as Hydroflurocarbons (HFCs) and Nitrous oxide (N2O). Because these pollutants are easily captured and destroyed at their source, they present a large and low-cost source of carbon offsets.

Purchase of carbon allowances from emissions trading schemes

Purchasers can offset their carbon emissions by purchasing carbon allowances from legally mandated cap-and-trade programs such as the Regional Greenhouse Gas Initiative or the European Emissions Trading Scheme.

Carbon capture and storage (CCS)

CCS refers to projects that capture CO2 emissions from emissions sources and store them by injecting them into an underground geologic formation such as active and abandoned oil and gas reservoirs, saline aquifers, or unminable coal seams. Although CCS is not currently commercially viable, it is likely to become an important medium-term option for climate mitigation.

Mixed

Some offset products represent a mixture of offset credits from various projects. These are often cheaper than other offset products, however it is often difficult to ascertain where and what kinds of offsets are being purchased.