Carbon Offsets Explained: Types, Benefits and Long-Term Impact

Plenty of a business’s operations are carbon negative—midstream, transportation or industrial processes, for example. For those who are concerned about the size of their GHG (Greenhouse Gas) emissions, popularly known as carbon footprint, but find it impractical to fully curb emissions, you might consider purchasing offsets.

Carbon offsets allow greater flexibility to manage and mitigate your climate impact by funding carbon offset projects or by reducing your reliance on polluting activities.

What are Carbon Offsets?

Carbon Offsets (or Greenhouse Gas Offsets) are a commodity that you can purchase as a counterweight to your emissions. One Offset is equivalent to one metric ton of carbon dioxide (CO2e) absorbed or prevented from being released. The offsets you purchase can be generated from a variety of sources. Some aim to be carbon-negative and absorb more carbon than they emit; others aim to accomplish the same task without heavy reliance on fossil fuels, like treating water with chlorine in lieu of boiling it. 

• Carbon Absorption projects (reforestation or carbon capture programs) absorb carbon from the atmosphere and store it.  

• Co-generation plants­ use wasted heat to generate additional electricity instead of fossil fuels, which reduces your reliance on these resources. 

• Some businesses with large emissions, like those in the airline industry, directly purchase Carbon Offsets that they then sell to individual customers.  

• Carbon offsets are typically traded among large consumers and industries that rely heavily on fossil fuels due to the sheer amount of emissions involved. Offsets offer a way for those institutions to reduce their emissions while mitigating the financial impact of shutting down large sectors of the economy. 

For the parts of your energy consumption that rely on fossil fuels— such as shipping deliverables— buying offsets can allow your home or business to become carbon neutral. 

Who buys carbon offsets?

Large industrial corporations that are major sources of emissions (software sectors, oil and gas, power generation, and others) are also key buyers of carbon offsets in Canada. For example, large facilities such as Shell, ENMAX, TransAlta, Canadian Natural Resources Limited, Capital Power, and others purchase offsets under systems like Alberta’s Technology Innovation and Emissions Reduction (TIER) program or British Columbia’s Greenhouse Gas Industrial Reporting and Control Act. 

Provincial governments also buy carbon offsets to achieve carbon neutrality across the public sector. 

Other participants—including smaller companies, corporations, and local projects account for roughly 38.7% of credits sourced across Canada. 

According to ALBERT (the Alberta Emission Registry Tracker), the total number of registered carbon offsets in June 2022 was approximately 77.1 million. 

Alberta is one example where carbon offsets are integral to industrial greenhouse gas reduction regulations. Under TIER, facilities that emit over 100,000 t CO₂e/year are assigned a threshold of greenhouse gas emissions allowed per unit of production. If a facility exceeds this limit, it must either purchase Emission Performance Credits from other regulated facilities or Carbon Offsets from non-regulated projects that reduce greenhouse gas emissions. 

Smaller companies can also participate by micro-generating solar or wind power and selling the resulting carbon offsets. When large industrial sites purchase these offsets, system owners receive payments for producing clean electricity while contributing to the long-term goal of reducing Alberta’s greenhouse gas emissions. 

What if I can’t cut my emissions fast enough?

Depending on your business’s unique predicament, performing the necessary efficiency upgrades may pose an operational or financial challenge and make it difficult to meet your targets in a timely manner. In this case, most companies choose to purchase Carbon Offsets that provide a way for one company to compensate another for reducing their emissions voluntarily. A company that is under no obligation to cut emissions can still do so and sell that difference to others attempting to meet their targets in the form of an offset.

If this type of trade sounds like one you think you’ll benefit from, you can ask our specialist for guidance on moving forward.

Where do Offsets come from?

Offsets can be separated into two categories, depending on where they are generated and who they benefit: local and non-local. 

Local offsets are generated at a source near you and directly benefit the local economy (in this case, the provincial economy). 

Non-local offsets, be they national or international, benefit communities elsewhere, but allow you to fund initiatives that may be restricted to certain areas. If you specifically want to dedicate your resources to projects like reforestation and rainforest preservation, you will most likely be purchasing non-local offsets.

Types of Carbon Offsets

According to a report by Ecosystems Marketplace/BNEF, this was the global market share per carbon offset type for the past decade:

• Wind: 30%.
• Reforestation: 10%.
• Avoided deforestation: 9%.
• Landfill methane: 7%.
• Biomass: 7%.
• Clean cookstoves: 7%.
• Forest management: 4%.
• Large hydro: 4%
• Other: 22%.

Certified offsets vs. non-certified offsets

Carbon offsets are typically not standardized by government organizations, and some lack oversight from regulating bodies. As a result, some offsets might not offer the environmental benefits that are stated because of inaccurate calculations, or even corruption or corner-cutting.

Third-party certification helps ensure that a carbon offset has undergone exhaustive auditing to prove its compliance with strict environmental standards and promised benefits. Certification from one of the main third-party offset standards (including REDD+, Verified Carbon Standard (VCS) and Gold Standard (GS)) can ensure the offsets you purchase are substantiated and will retire in your name.

The major certifications that we can source offsets for include:

REDD+: Reducing emissions from deforestation and forest degradation in developing countries.

REDD+ incentivizes developing nations to sustainably manage their forest ecosystems instead of chopping them down for economic gain. Other nations, private sectors, and multilateral funds can make direct payments or exchange carbon credits to reduce deforestation. REDD+ is backed by the United Nations.

VCS: Verified Carbon Standard

The Verified Carbon Standard is a voluntary carbon offset program developed by the non-profit company Verra. The VCS is concerned with the reduction of Greenhouse gas emissions and verifying that reported emission reductions are accurate. Once a project is found to meet the meticulous requirements to be VCS-certified, the project can earn Verified Carbon Units or VCU – a tradable GHG credit.

GS: Gold Standard

The Gold Standard is a voluntary carbon offset program designed in alignment with the UN’s Sustainable Development Goals and developed by a team led by the WWF, HELIO International and SouthSouthNorth, the Gold Standard. The Gold Standard has some of the most rigorous standards among other NGO’s and can work with projects to ensure their carbon offsets are effective or can sell their own offsets.

Ongoing carbon offset projects in Canada

Identifying trusted carbon offset providers in Canada requires verifying that their projects meet quality standards, including additionality, permanence, and independent third-party verification. Reliable providers typically offer projects listed on recognized carbon registries such as Gold Standard (GS), Verra’s Verified Carbon Standard (VCS), Climate Action Reserve (CAR), American Carbon Registry (ACR), or the Canadian Standards Association (CSA) CleanProjects Registry. High-integrity offsets must demonstrate that the project would not have occurred without carbon credit funding (additionality), that emissions reductions are long-lasting or permanent, that credits are not double-counted, and that reductions are verified by registered third-party auditors. 

In Canada, buyers can also look for projects registered under national or provincial frameworks, such as the Environment and Climate Change Canada Federal Greenhouse Gas Offset System, or projects proposed by recognized Canadian companies and retailers that offer verified offsets.  

Trusted providers should maintain complete transparency by listing credits on public registries, providing detailed information on methodologies and locations, and issuing paperwork confirming that purchased credits have been retired. Independent resources, including guides from organizations such as the Pembina Institute or the David Suzuki Foundation, can also help evaluate the credibility of offset providers. 

There are several carbon offset programs in Canada that contribute to communities,  reduce reliance on fossil fuels and lower greenhouse gas emissions.  

Bayano–McGill Reforestation Project 
The Bayano–McGill Reforestation Project, led by McGill University in partnership with an Indigenous women’s NGO in eastern Panama, supports large-scale tree planting and monitoring initiatives that enhance long-term forest carbon removal while contributing to ecosystem restoration and community livelihoods. 

Carbone Boréal 
Carbone Boréal develops forest plantations in poorly regenerated areas of the Canadian boreal forest and on marginal agricultural lands, generating carbon offsets while supporting research into long-term carbon sequestration and ecosystem dynamics. 

Darkwoods Forest Carbon Project 
The Darkwoods Forest Carbon Project protects and sustainably manages forests within the Darkwoods Conservation Area in British Columbia, generating verified carbon credits through conservation practices that prevent potential future emissions. 

Great Bear Forest Carbon Project 
The Great Bear Forest Carbon Project safeguards large areas of coastal temperate rainforest in partnership with First Nations, generating carbon credits through avoided deforestation and improved forest management practices. 

Nanaimo Landfill Gas Capture Project 
The Nanaimo Landfill Gas Capture Project captures methane emissions generated at the Nanaimo landfill and converts the gas into usable energy, reducing greenhouse gas emissions associated with landfill operations. 

Landfill Methane Recovery Protocol 
The Landfill Methane Recovery Protocol establishes standardized guidelines for projects that capture and destroy methane emissions from landfill sites, supporting greenhouse gas reduction initiatives across Canada. 

Alberta Carbon Trunk Line (ACTL) 
The Alberta Carbon Trunk Line is a large-scale pipeline system that transports captured carbon dioxide from industrial facilities in Alberta for permanent geological storage or utilization in industrial processes. 

Quest CCS Project 
The Quest Carbon Capture and Storage Project captures carbon dioxide generated during hydrogen production at an oil sands upgrading facility and permanently stores the emissions in deep geological formations in Alberta. 

Ontario Greenhouse Biomass to Energy Project 
The Ontario Greenhouse Biomass to Energy Project uses biomass fuels such as wood waste to generate heat for greenhouse operations, reducing reliance on fossil fuels and lowering associated greenhouse gas emissions. 

The Pros and Cons of Carbon Offsetting

Offsetting gets its fair share of criticisms. For one, some businesses that have greater financial means prefer to outsource their emissions in lieu of performing efficiency upgrades. Thus, some experts fear that it removes the incentive for companies to reduce their emissions. For this reason, many countries (including Canada) have mandated that companies cut their emissions.

On the other hand, some of our activities necessarily leave a carbon footprint. Things like heating our buildings, transportation, generating electricity, and even some agricultural practices — can be counteracted to achieve net-zero carbon pollution.

They also allow buyers to directly contribute to environmental causes and restoration projects of their choice. So, whether you’re a large business mandated to reduce emissions below a threshold or a start-up just trying to shrink your carbon footprint, carbon offsetting might be a good choice for you.

Do carbon offsets actually make a difference?

There is no simple answer. While purchasing carbon offsets may seem like a straightforward way to reduce greenhouse gas emissions, not all offset projects deliver on their promises.

Both large facilities and individuals seeking to lower their carbon footprint should exercise caution with projects that claim to remove carbon but produce uncertain results and, in some cases, may even have unintended environmental impacts.

For example, nitrous oxide (N₂O) emissions from nitric acid production (used in fertilizers and plastics) can be reduced by installing destruction equipment, which can generate carbon credits. However, such offsets may not always deliver reductions proportional to their cost and could create incentives that do not meaningfully reduce overall emissions.

When carbon offset projects are implemented with a focus on ecosystem restoration, greenhouse gas reduction, and community benefits, they can provide long-term positive impacts for both the environment and local populations.

How can I purchase carbon offsets?

Carbon Offsets in Canada aren’t necessarily standardized across provinces. For example, British Columbia has a more publicly run carbon registry to help the provincial government meet its reduction targets, whereas Alberta’s carbon registry is managed by the CSA group.  

However, comparing carbon offsets can be difficult, let alone navigating the registries and deciphering the different project types and statuses. Moreover, to write out all the various permutations of green plans available and illustrate all the carbon offset calculations for each unique client would inundate you with unnecessary information. 

Instead, our experts work with you to source carbon offsets that accurately represent your corporate sustainability goals and help you along every step of the process.  

• We source all kinds of offsets without bias, whether you are looking for offsets for compliance purposes or voluntary purposes; premium certified offsets or non-certified options; or nature-based strategies like afforestation or carbon capture, utilization, or storage strategies.  

• We can source both community-based or global offsets that ensure that the money that is invested is substantiated and that the offsets retire in your name. Additionally, we offer carbon accounting and can help you calculate your business’s emissions in a cost-effective, timely manner. 

• We help you buy carbon offsets, navigating you through relevant options from start to finish to find out the best carbon offsets to suit your unique needs, negotiating on your behalf. 

After filling out the form, one of our experts will contact you with options to proceed.  

Why Choose Us?