What is a Carbon Offset? What is Carbon Neutral Energy?

If you’ve taken a flight in recent years, it’s likely you will have been offered the opportunity to purchase a carbon offset at checkout for the low price of just a few dollars. But have you wondered what exactly a carbon offset is? And should you be purchasing carbon offsets along with your energy? Keep reading to find out.

What Is A Carbon Offset?

Carbon offsetting refers to investing in an environmental project to compensate for and balance out the carbon emissions caused by another activity. These environmental projects are often based in developing countries and aim to put procedures in place that will reduce future emissions.

There are two markets for carbon offsets: the larger compliance market and the smaller voluntary market.

The compliance market consists of companies, governments and other entities who purchase carbon offsets to meet compliance requirements. These requirements dictate the amount of CO₂ they are allowed to contribute to the atmosphere.

Meanwhile, the voluntary market is supported by those who feel compelled to mitigate their environmental impact of their own accord. You may have contributed to the voluntary market if you ever ticked the box to purchase a carbon offset with a flight, for example.

Why Are Carbon Offsets Relatively Affordable?

A considerable amount of the scepticism felt towards carbon offset schemes stems from the confusing nature of their low prices. You might wonder why, if your flight contributes so much CO₂ to the air, would you be able to counteract the impact with just a small fee?

This can be explained by the way that there are currently many inexpensive ways to reduce emissions. For example, providing one low-energy lightbulb to a home in a developing country that was previously using kerosene lanterns for lighting, would make a significant difference to CO₂ emissions. This is especially true when this reduction in CO₂ emissions accumulates over several years.

This difference could, for example, be enough to offset the emissions from your air travel and only cost the price of a lightbulb.

What is Carbon Neutral Energy?

A number of electricity retailers have responded to Australian consumers’ increased environmental consciousness by offering ‘carbon neutral’ or ‘carbon offset’ energy.

This is not the same as renewable energy. Instead, being on a ‘carbon neutral energy’ plan means your electricity retailer has purchased enough carbon offset units to cancel out the emissions from your home’s energy usage.

If minimising your CO₂ emissions matters to you, then a carbon neutral energy plan may be something worth considering. But with ‘GreenPower’ being offered by almost all electricity retailers, carbon neutral energy is not the only option for an eco-friendly energy plan.

What Is GreenPower?

GreenPower is a voluntary, government-led program that allows energy customers to make a financial contribution towards Australia’s renewable energy program.

All of Australia’s electricity, regardless of how it was generated, is eventually fed into the same grid. This means even if you purchase renewable electricity, it’s impossible for that electricity to be delivered directly to your home.

By opting for Greenpower, your electricity retailer will offset your energy usage by purchasing electricity through government-accredited renewable generators. This renewable energy is then added to the electricity that is fed through Australia’s electricity grid.

Want A More Eco-Friendly Energy Plan?

If you’ve been inspired to incorporate emissions offsetting into your energy plan, then we can help you compare eco-friendly deals among various providers.

There’s a lot to consider. For example, you can opt to have just 10% or up to 100% of your electricity usage covered by GreenPower. It’s worth considering that GreenPower tends to be more expensive than carbon neutral energy. Some providers will offer GreenPower and carbon neutral energy, which means you could purchase a plan that includes both.

Rather than overwhelming yourself with information, use Compare & Connect’s website or phone call service to have it all simplified. We can find the best deal, tailored to you, within minutes.