Emission Reduction, Explained

Emission reduction is critical to fighting climate change – and the good news is it’s something every business can and must do.

What is emission reduction?

Emission reduction refers to minimisation of the greenhouse gas (GHG) emissions generated by an individual, organisation, or country. These gases include carbon dioxide (CO2), methane, nitrous oxide, and hydrofluorocarbons (HFCs). GHGs are the gases responsible for trapping heat, and warming the plane and are therefore a key focus when it comes to fighting the climate crisis.

When talking about emission reduction, you are likely to come across the terms ‘carbon neutral’ and ‘net zero’. There is a difference between the two terms - you can read more about emissions reduction language in our article: carbon neutral vs net zero.

What is carbon emission reduction?

Whilst on your journey to understand your impact, you may hear the term ‘carbon emission reduction’. This refers solely to the reduction of an individual, business or country’s CO2 emissions, not other greenhouse gases.

It is worth noting that the concept of CO2e (CO2 equivalent) is often used when talking about emissions reduction. This concept includes all other greenhouse gases and their equivalent global warming potential in terms of CO2. 

Why is emissions reduction important?

Emissions reduction is essential to meeting international and regional climate targets, achieving net zero and limiting the effects of climate change. When you reduce your carbon footprint and its negative impact on the environment, you are helping to ensure all people in new generations will have a liveable and equitable planet to grow up on.

Scientists predict that we have a very limited ‘carbon budget’ remaining before warming of over 1.5 degrees celsius (the target set out in the Paris Agreement) becomes inevitable. The carbon budget refers to the amount of remaining carbon that can be released into the atmosphere. This takes into account historic emissions and uses predictive future emissions scenarios to understand what changes need to be made, and how quickly. 

Some studies are predicting that this carbon budget might be even less than originally thought (up to 40% less!). We must recognise the urgency and reduce GHG emissions fast - which means at least halving them by 2030, not thinking we can just gradually reduce them until 2050.

Emissions reduction remains the publicly preferred tactic for tackling climate change, above other potential policies such as geoengineering via  releasing particles to atmospherically block warming, storing carbon underground, or adapting to a warmer climate that all shift responsibility from the emitter to a solution.

Reducing emissions is not only an essential part of any businesses future strategy due to its necessity but also because of the business benefits! Reducing your emissions is essential to achieving a net-zero target and can further assist with the environmental part of an application to become a B Corp-certified business. Find out more about how becoming carbon neutral and reducing your emissions relates to becoming a B Corp. 

Transparency in emissions reduction is increasingly important and will appeal to customers, employees and stakeholders. Companies can opt to participate in reports such as the Corporate Emissions Reduction Transparency (CERT)  report. Reports such as these use a standardised framework for businesses to communicate their climate targets, actions and achievements.

Businesses may also use the widely-accepted SBTi Net-Zero Standard, which provides corporations with the tools and guidance they need to set net zero targets in line with climate science. To reach net zero under the framework, most companies will require rapid emissions reduction resulting in decarbonisation of 90 - 95%.

How can emissions be reduced?

Emissions should be calculated based on your carbon footprint measurement. Calculating your footprint helps you to identify exactly where your emissions are from. Some primary emissions sources include fuel combustion to make electricity, transport, industrial processes, and waste. 

Once you have measured and analysed your business’s emissions, you can create a credible plan to reduce them. These initiatives should be directly related to the emissions categories you have measured.  Examples of specific actions may include:


  • Electricity: Replacing lighting with LED lightbulbs
  • Electricity: Installing high-performance insulation to reduce heat loss
  • Electricity: Adding solar panels to your buildings to generate clean energy
  • Direct emissions: Switching your fleet to electric vehicles
  • Travel: Encourage work from home to reduce transport emissions
  • Travel: Reducing business-related air travel
  • Waste: Create office based recycling opportunities
  • Suppliers: Make the switch to carbon neutral suppliers

Reduction strategies can (or should) also be prioritised based on the energy, time, and financial resources required to implement them. As significant changes and investments are often required to enact reduction initiatives, this is a long-term strategy. In the interim, carbon credits can be used to have an immediate impact while you shift focus to reduction. 

You should also bear in mind that you are not alone in wanting to reduce your emissions. Governments around the world have employed policies to promote emissions reduction. 

Government policies to promote emissions reduction

‍Australia: What is the ACCU Scheme?

The ACCU Scheme, formerly known as the Emissions Reduction Fund (ERF), is a voluntary scheme that aims to incentivise domestic emissions reduction by Australian businesses. It provides incentives to organisations and individuals to reduce their carbon emissions through the adoption of new technology and practices. The goal of the fund is to help Australia meet its commitments under the Paris Agreement.

Participants in this scheme have the opportunity to earn Australian carbon credit units (ACCUs) by actively engaging in emissions reduction activities, particularly by funding and implementing innovative projects. Each ACCU earned signifies the avoidance or sequestration of one tonne of carbon dioxide equivalents (CO2e). These ACCUs can then be traded and sold, offering an economic incentive for businesses to reduce their carbon footprint. As demand for ACCUs rises, they play an increasingly significant role within Australia's burgeoning carbon market.

However, a key concern with the scheme is that it is flooding the market with low-quality offsets from ineffective projects, which are being purchased by heavy polluters, and ultimately not reducing emissions at all. This is why if you’re looking to purchase credits as part of your journey to net-zero, it’s important to work with credible partners, like Trace, to help you source only high-quality carbon credits and implement tangible reduction strategies. 

It is clear that all organisations need a bold, long term emissions reduction plan that involves a widespread move to clean energy and sustainable development. 

Europe: EU Emissions Trading System

There is a similar scheme in the European Union, known as  the EU Emissions Trading System (EU ETS). 

The EU ETS operates on a cap-and-trade mechanism, which places a cap on the total allowable carbon dioxide (CO2) emissions in covered sectors, including energy production, industry, and aviation. Over time, this cap is progressively reduced to align with the EU's ambitious emission reduction targets. Companies and facilities within the system are allocated emission allowances, each representing a specific quantity of CO2 emissions. These allowances can be traded, creating a carbon market that financially rewards companies for reducing their emissions below their allocated allowances. Companies exceeding their limits face financial penalties or the obligation to purchase additional allowances. 

The EU ETS, therefore, not only provides economic incentives for emissions reduction but also promotes the adoption of cleaner technologies and practices across industries. It is a fundamental tool in the EU's strategy to limit and reduce greenhouse gas emissions while fostering innovation, economic growth, and sustainability.

The need for emissions reduction has never been more pronounced. Emission reduction stands as the cornerstone of our battle against climate change, and its significance cannot be overstated. While the concept might be intertwined with the concept of ‘carbon neutral’ which focuses on immediate action to counterbalance emissions with carbon credits, long-term efforts must include emissions reduction in order to secure a liveable environment and is still the socially preferred method of tackling the climate crisis.

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