Who Generates Carbon Offsets?


A variety of different projects generate carbon offsets. All of them utilize activities that contribute to reducing or capturing carbon and other greenhouse gas (GHG) equivalents. Projects include but are not limited to forestry, agriculture, and energy efficiency efforts. These projects counteract human-made emissions while also improving the livelihood of people around the world.


Carbon offset projects reduce or capture emissions through regenerative efforts. While the specific methods used to generate offsets vary depending on the project type, there are only three ways to reduce emissions:

  1. Capturing and destroying a greenhouse gas at its source that would otherwise be emitted into the atmosphere. Exemplified by a project capturing methane gas at a landfill.
  2. Producing energy using a clean, renewable resource eliminates the need to create that same energy from fossil fuels. Exemplified by a project generating hydropower from a dam.
  3. Capturing and storing (or “sequestering”) greenhouse gases to prevent their release into the atmosphere. Exemplified by a project that manages the land, primarily farmland, so that soils absorb and hold more carbon.

To be recognized as a carbon offset, a project needs the financial support of the VCM. Independent organizations (registries) monitor the amount of carbon a project saves to assign one offset for every tonne of CO2 removed. Projects sell the newly classified assets in the form of CO2 reduction certificates. The profit is recycled back to the developers and turns into funding for future projects.

The Process:

Ensuring additionality remains a high priority to preserve the integrity of carbon offsets and protect their value. To ensure a project delivers genuine impact, it goes through a rigorous verification test conducted by an independent third party. The process certifies that the CO2 reductions are additional, permanent, and not harmful. An additionality test is time-consuming and expensive but necessary.


Additionality represents the extra environmental benefits of generating a carbon offset. For example, a mangrove tree protection project in South Florida may generate offsets from the CO2 reduction but qualify for additional certification for positively affecting the ecosystem’s biodiversity. These certifications add value to a carbon offset because of the extra benefit created for the environment. It’s essential to learn about which standards your offset provider adheres to ensure the quality of your offsets.

➕ Many of the offsetting projects also provide additional benefits such as added biodiversity, education, employment, food security, access to clean drinking water, and overall health & well-being in developing countries.

Permanence, as the name suggests, refers to the length of time an offset represents a reduction in atmospheric greenhouse gases. Permanence is important to consider because some popular offsets, like forestry projects, aren’t permanent. Trees take many years to grow and mature, and they can be harvested or die before they ever reach their full carbon-sequestering potential. When that happens, the reductions they represented disappear, and the offset becomes worthless. The best way to ensure an offset is Permanent is to choose one that comes from a source that will last forever, like a wind farm or solar installation.


Leakage refers to the unintended consequences of a carbon offset project. A project cannot displace emissions somewhere else or cause an overall increase in GHGs. For example, a landfill gas capture project may result in increased methane emissions if the gas is not adequately captured and flared. Emphasis is placed on planning and creating proper foundations because an improperly designed project can cause more harm than good. Buyers should confirm that their provider has experience designing and implementing offsets to avoid leakage.


To generate carbon offsets, companies or organizations must create projects that prevent greenhouse gas emissions from happening. These projects can take many forms, but all must undergo a rigorous verification process to ensure that the carbon reductions achieved are accurate, permanent, and verifiable. Only then can the project be certified and sell the offsets they produce. By buying carbon offsets, you can help finance these crucial projects and offset your emissions.

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