Did you know global carbon emissions reached a staggering 37 billion metric tons in 2023? For businesses committed to net-zero, carbon offsets are becoming a critical tool to tackle those ‘last-mile’ emissions.
But what are voluntary carbon offsets exactly, how do they work, and are they truly effective? In this guide, we’ll explain everything you need to know in 2025, from benefits and pricing to available options and how Reegy can help businesses navigate the world of carbon offsets.
What Are Voluntary Carbon Offsets?
Voluntary carbon offsets are reductions in greenhouse gas (GHG) emissions achieved by projects outside of your organization to compensate for emissions produced elsewhere. These projects can include initiatives like reforestation, renewable energy, methane capture, or improved agricultural practices.
Achieving net-zero emissions is no longer optional for businesses striving to remain competitive and meet sustainability goals. But what happens when you’ve reduced emissions as much as possible, and some carbon output still remains? This is where carbon offsets come into play.
When a company or individual purchases carbon offsets, they are essentially funding activities that remove or reduce emissions to make up for their own carbon output. Each offset represents one metric ton of carbon dioxide (or its equivalent in other gases) removed from the atmosphere.
Types of Voluntary Carbon Offset Projects
Offsets fund projects such as renewable energy, reforestation, methane capture, or energy efficiency improvements.
Businesses can choose from a range of offset projects based on their sustainability goals:
Reforestation and Afforestation
Planting trees to absorb carbon dioxide and restore degraded ecosystems. Trees act as natural carbon sinks, capturing CO₂ over their lifespan. This also includes wetland restoration to focus on capturing emissions naturally.
Renewable Energy Projects
Funding wind, solar, or hydroelectric energy to replace fossil fuels and reduce emissions associated with traditional power generation.
Methane Capture
Projects that prevent methane emissions from sources like landfills, agriculture, or wastewater. Methane is a potent greenhouse gas, and capturing it significantly reduces its impact.
Energy Efficiency Improvements
Initiatives that reduce energy consumption in buildings, factories, or communities by enhancing infrastructure and processes.
Sustainable Agriculture
Supporting farming methods that store carbon in the soil, reduce emissions from fertilizers, and promote biodiversity.
These initiatives not only offset emissions but often provide additional social and environmental benefits, such as creating jobs, improving air quality, and supporting local communities.
How Do Voluntary Carbon Offsets Work?
Voluntary carbon offsets work by allowing businesses to compensate for their emissions through verified projects that reduce or remove greenhouse gases. The process involves purchasing carbon credits, with each credit representing one metric ton of carbon dioxide (or its equivalent) removed or avoided.
These projects are rigorously verified by trusted organizations such as Gold Standard or VCS to ensure they meet criteria like additionality, permanence, and measurability. This verification ensures that the reductions are real, quantifiable, and not already accounted for elsewhere.
When businesses purchase offsets, the credits are retired to prevent double-counting. Retirement means the offset is permanently removed from circulation, ensuring no one else can claim its impact.
For example, if your company emits 1,000 tons of CO₂ annually, but internal measures only reduce 500 tons, you can purchase 500 verified offsets to achieve net-zero emissions. This approach enables businesses to address their carbon footprint while contributing to global sustainability efforts.
Reegy’s platform simplifies this process. We help you measure your emissions, identify verified offset projects that align with your goals, and ensure that every credit you purchase delivers real, tangible impact! With Reegy, offsetting becomes a streamlined and transparent part of your sustainability strategy.
Why are Carbon Offsets important for your business?
Carbon offsets offer a flexible and scalable solution for addressing emissions. They allow businesses to take immediate action on their carbon footprint while supporting global projects that reduce or capture emissions. Offsets are also cost-effective and provide a way for companies to show leadership in sustainability.
Achieve Sustainability Goals
Carbon offsets help businesses meet their net-zero or carbon-neutral targets, particularly for emissions that are difficult to eliminate completely.
Fund Environmental Projects
Offsets directly support critical projects around the world, such as reforestation, renewable energy, and wildlife conservation. These initiatives drive measurable environmental and social benefits.
Enhance Brand Reputation
Demonstrating a commitment to sustainability helps businesses improve their brand image and build trust with eco-conscious customers, investors, and stakeholders.
Meet Regulatory Requirements
In regions with carbon pricing or emissions limits, offsets can help businesses comply with regulations while supporting meaningful climate action.
How to implement Carbon Offsets into your Corporate Sustainability Strategy
Carbon offsets come from different types of projects, but the overall process always works the same.
1. Measure Your Carbon Footprint
Before implementing carbon offsets, the first step is understanding your emissions. Measure your corporate carbon footprint to get a good understanding of the dimensions of carbon emissions you are dealing with from all parts of your organization.
Reegy simplifies this by helping you track emissions across your operations, supply chains, transportation, and energy consumption. Accurate measurement is the foundation of any effective sustainability strategy!
2. Focus on Internal Reductions
Once you understand where your emissions are coming from, focus on reducing as much as possible internally. Internal reductions ensure that offsets complement, rather than replace, meaningful action and prevent you falling for greenwashing!
💡 Reegy generates AI-driven strategies to help you optimize processes, improve energy efficiency, and adopt renewable energy solutions. We have a large database of sustainability recipes you can load directly into your account!
3. Purchase Carbon Offsets
After reducing emissions internally, you can address the remaining carbon footprint by purchasing offsets. Reegy connects you directly with verified carbon offset projects. We work only with trusted partners to ensure your offsets meet global standards like Gold Standard or VCS.
4. Retire Offsets and Track Progress
Finally, the offsets are retired to ensure no double-counting. This means the credits are permanently removed from circulation and cannot be claimed by another party.
For example, if your company emits 1,000 tons of CO2 annually but can only reduce 500 tons through internal measures, you might purchase 500 carbon offsets to reach net-zero emissions.
Potential Drawbacks of Carbon Offsets
While offsets are valuable, they are not a replacement for internal emission reductions. Some offset projects may lack transparency or fail to deliver measurable long-term impacts. Offsets should be seen as a temporary solution that works best alongside systemic reductions in emissions.
How Much Do Voluntary Carbon Offsets Cost?
The price of carbon offsets varies depending on the project type, location, and certification. On average, businesses can expect to pay between $10 to $50 per metric ton of CO2.
For instance, renewable energy projects tend to cost less, while nature-based solutions like reforestation or methane capture may be more expensive. Certified credits from trusted standards like Gold Standard or VCS ensure transparency and credibility but may come at a premium.
How Reegy Helps Companies Navigate Carbon Offsets
At Reegy, we understand that achieving Net Zero can feel overwhelming. That’s why our sustainability automation platform simplifies the entire process, helping businesses take meaningful action on emissions.
Accurate Emission Tracking
Reegy starts by accurately tracking your emissions across operations, supply chains, and energy usage. We provide clear insights into where your emissions are coming from so you can make informed decisions.
Actionable Reduction Plans
Once we measure your carbon footprint, we generate AI-driven strategies to help you reduce emissions internally. These actionable plans focus on efficiency, renewable energy adoption, and process improvements.
Access to High-Quality Offsets
For emissions that cannot yet be eliminated, Reegy connects you to a selection of high-quality, verified carbon offsets. We work with trusted partners to ensure the offsets align with your goals and provide measurable impact.
Transparent Reporting
Reegy makes it easy to report on your progress with clear, auditable sustainability reports. Whether you need reports for stakeholders, investors, or regulatory compliance, we’ve got you covered.
With Reegy, businesses can confidently balance immediate offsetting needs with long-term reduction strategies, ensuring alignment with industry best practices.
Final Thoughts
Carbon offsets play a critical role for businesses working toward net-zero emissions, especially for hard-to-reduce emissions. While they are not a perfect solution, offsets provide an effective way to take immediate action when combined with internal reduction strategies.
Ready to take the next step toward net-zero? Book a demo with Reegy and start balancing your emissions with confidence today!
Reegy is a complete software solution for ESG & Carbon Footprint Management. Our Reegy Eco Hub enables enterprises, financial institutions and governmental organizations to manage their climate action in one central location along the entire value chain. Track, measure, reduce, and offset your carbon emissions, disclose them to regulators, stakeholders, and customers and lead your company to Net Zero on autopilot!