Net Zero: What is Net Zero and why is it important?

You’ve probably heard the term ‘net zero’ in relation to climate change – but what does it mean? We’re here to explain exactly what net zero is and how your business can achieve it.

What does net zero emissions mean?

Reaching net zero emissions generally means that a business or country has eliminated the majority of their greenhouse gas emissions and compensated for the remainder using carbon offsets

High-quality, independently verified offsets are a way for an organisation to balance their emissions by funding projects which remove or sequester carbon in other parts of the world. Such projects can include protecting forests and blue carbon ecosystems, replacing power sources with renewable energy alternatives, or direct air capture to extract and store CO2 from the atmosphere. These projects must be verified by a reliable independent organisation such as Gold Standard, VERRA or through a government program, to be credible.

Once a company has reduced their emissions and purchased a sufficient amount of carbon credits to offset the remaining amount, they will achieve net zero emissions – the amount of greenhouse gases they are taking out of the atmosphere cancels out those they are producing.

Being net zero doesn’t mean all emissions are being prevented, but the focus should be on getting as close to ‘gross zero’ emissions as possible. High-quality carbon offsets are then used for any unavoidable emissions.

Net zero vs. carbon neutral

The terms net zero and carbon neutral are often used interchangeably. However, there is a generally accepted distinction between them.

The main distinction is that “net zero” means you have already cut, or have a credible plan to cut, the majority (90%+ as per the Science-based Targets Initiative) of your greenhouse gas emissions, and are not just relying on offsetting. In contrast, “carbon neutral” often means that a company is offsetting most of  their carbon emissions. 

Net zero is the more desirable, long-term goal, as the aim should always be to reduce emissions as much as possible. However, carbon neutrality is an important first step in the immediate term for most businesses. Reducing emissions can take significant time and investment, as technology may need to be replaced and the way the business operates adapted. (Note: Trace actively encourages and supports  all business to develop carbon reduction plans.)

Still confused? Check out our other articles for more information on the term carbon neutral and the difference between carbon neutral vs net zero.

The importance of achieving net zero

It may not be easy, but achieving net zero by 2030 is essential to tackling climate change and preventing runaway damage to our planet. Only by doing this can we hope to achieve the aims of the Paris Agreement and limit the warming of the global temperature to well below 2°C and preferably 1.5°C.

It doesn’t stop there – once we’ve achieved net zero, we’ll then need to repair past harm by removing carbon from the atmosphere, so that it does not continue to increase global temperatures and fuel climate change.

You’ve made it this far – starting is easy

Join our community of climate-conscious business leaders and take responsibility for your carbon footprint with trace today.

Net zero targets

Net zero is a hot topic at the moment and many businesses and governments have already committed to achieving net zero by a particular year. However, these net zero targets are only credible if they include plans for immediate action to reduce their emissions, and do not rely solely on offsetting.

To achieve their net zero target, a business or country must have a clear plan to improve efficiency and decarbonise by replacing fossil-fuel power and material sources throughout their entire supply chain with clean, renewable options. Businesses must be transparent in reporting regularly and publicly on their progress, so they can be held accountable and inspire others in their value chain to take action.

What are some carbon neutral companies?

Examples of current carbon neutral companies include Australia Post, Coles, Commonwealth Bank, Jetstar, OVO Energy and Qantas. These companies are among the hundreds that have so far achieved the government’s Climate Active certification.

Some popular events are also certified carbon neutral – for example, Adelaide Festival and Melbourne Fashion Week. Another interesting case study is the City of Sydney, which was the first Australian government body to achieve certified carbon neutral status, in 2011.

And of course, there are many businesses who have achieved carbon neutrality with Trace!


What does net zero emissions by 2030 or 2050 mean?

This is one of the most well-publicised net zero plans. In response to recent events, including the explosive report from the Intergovernmental Panel on Climate Change (IPCC) – which was dubbed ‘code red for humanity’ – many governments around the world have committed to net zero by 2050. 

As part of this, some are also aiming to reduce or halve their emissions by 2030. This is important because dramatically reducing emissions this decade is essential if we have any hope of achieving long term net zero targets and avoiding the worst effects of climate change. We cannot allow our leaders to put this off until 2050 when it will be too late.

Is net zero possible?

We know that net zero is possible for businesses and countries – two countries (Bhutan and Suriname) have already achieved it. Logically, it should therefore be possible for the world to reach net zero global emissions.

However, there is much doubt as to whether current policies are enough to achieve this. The Climate Council, for example, does not believe Australia’s targets are sufficient to meet the aims of the Paris Agreement. They believe the country should be aiming for a 75% reduction in emissions by 2030, and zero emissions by 2035.

The evidence of climate science is that we need radical climate action to achieve net zero ASAP, and certainly this decade. This includes immediately moving away from fossil fuels and preventing any new expansion of this industry – which isn’t happening at the moment.

Which countries have committed to net zero?

More than 100 countries have committed to net zero by 2050, including Australia, the EU, the UK, the US, and Japan. Some of these commitments, including the UK’s, have been written into law. China has set a later target of 2060.

Want to join the race to net zero? Read our step-by-step guide on how to become a carbon neutral business to get started, or contact Trace today to find out how we can help your business take immediate climate action.

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