A carbon offset is a reduction in emissions of carbon dioxide (CO2) or greenhouse gases (GHGs) made to compensate for an emission made elsewhere. This often takes the shape of a project with a carbon benefit which takes place elsewhere, such as forestry and land-use management or energy efficiency projects.
There are two main markets for carbon offset projects, involving (1) institutional offsets and (2) voluntary offsets. Offsets can form an important part of a company’s carbon mitigation strategy, as they can provide an opportunity to reduce compliance costs, or may be the most cost-effective way to compensate for direct or indirect emissions. However, the associated risks need to be properly assessed.
IPIECA hosted a two-day workshop in Kuala Lumpur, Malaysia to convene the industry and its key stakeholders with the aim of building consensus and enhancing understanding of the importance, challenges and opportunities of carbon offsets as part of a broader carbon mitigation strategy.