Understanding Carbon Neutral and Net Zero

What is the difference between carbon neutral and net zero?

In order to lessen the effects of global warming and slow down the ramification humans have on our planet, net-zero must be achieved on a global scale by 2050. What is the difference between the carbon neutral and net zero and what do those two terms even mean?

Carbon Neutral

Carbon neutral refers to when the amount of carbon dioxide, CO2, being emitted into the atmosphere is equal to the amount of carbon being stored in carbon sinks, such as the ocean, plants, or soil. The majority of leftover CO2 stays in our atmosphere for at least 100 years with 20% lasting 1,000 years and 10% still present after 10,000 years!

To achieve carbon neutrality, carbon emissions must be reduced as much as possible and carbon offsets heavily invested in. Examples of carbon offset initiatives include: renewable energy projects, energy efficiency improvements, and tree-planting activities. Sometimes the simplest solution is often the best as forests absorb twice as much carbon dioxide as they emit, with global forests absorbing 1.5 times the amount of carbon that the United States produces annually.


Net-zero, on the other hand, goes a step further than carbon neutral in that net-zero refers to balancing the total production of all greenhouse gases (carbon dioxide, methane, nitrous oxide, and fluorinated gases) with the amount removed from the atmosphere. Carbon dioxide usually gets the bad reputation; however, despite accounting for 76% of the total anthropogenic greenhouse gases (GHG), the other GHG emissions actually have 25-10,000 times more of a global warming potential (GWP) than CO2.

For instance, fluorinated gases are the most potent and longest lasting GHGs. These man-made F-gases – hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6), and nitrogen trifluoride (NF3) – can last in the atmosphere for tens of thousands of years and trap at least 1,000 times more heat than CO2.

How greenhouse gases warm our planet
Figure 1: How greenhouse gases warm our planet

Absolute Zero

There is also a third category of sustainability development called absolute zero in which companies eliminate all GHGs from their operations (without the need to purchase any carbon offsets). This substantial feat is not possible for the majority of industries though due to the nature of their product or location.

The main global GHG contributors by sector are: electricity and heat production (25%: coal, natural gas, oil), transportation (14%: gasoline and diesel), agriculture and other land-use such as deforestation (24%: methane from cows and nitrous oxide from fertilizer), industrial processes (21%: manufacturing of goods, raw materials like cement and steel, food processing, and construction), buildings (6%: natural gas and oil for heating or cooking), and other (10%: extraction, refining, processing of raw materials).

It should be noted that the estimate of agriculture does not include the carbon offsets (about 20% of their total emissions) that result from capturing carbon in biomass, dead organic matter, and soil.

Energy Transition to Net-Zero

New policies, investments, and commitments are necessary to reach this global net-zero goal by 2050, yet it is all technologically feasible. The energy transition will be costly, though, with estimates as high as $9.2 trillion in annual spending on physical assets ($3.5 trillion more than current spending).

To put this in perspective, that increase is equivalent to a quarter of global tax revenue. A total of $275 trillion will be spent by 2050 on accelerating this transition to net-zero by funding dramatic shifts such as 5% of total car production being electric in 2020 to 100% by 2050 and increasing hydrogen and biofuel production tenfold to meet energy demands that are expected to be double that of today.

To become carbon neutral or net zero, the first step is to calculate one’s emissions. This is done through a process called Sustainability Reporting, with the gold standard being the GHG Protocol. Ecometrica is a software that offers carbon reporting and other social responsibility metrics. The Environmental Protection Agency (EPA) also offers a simplified GHG emissions calculator on their website for small businesses and organizations.

In general, there are then four main pathways to achieve net-zero:

  1. Generate electricity without emissions (such as nuclear, solar, wind, hydro)
  2. Increased electrification (replacing fossil fuel vehicles and equipment with electric ones)
  3. Improve energy efficiency (such as building retrofits)
  4. Remove carbon dioxide from the atmosphere (planting more trees or carbon capture and storage projects)

Renewable Energy

Solar Panels Carbon Neutral and Net Zero
Photo by Nuno Marques

The energy sector is responsible for 75% of global emissions, so transitioning this industry to clean energy is a top priority with the highest impact. To achieve net-zero by 2050, the global rate of renewable energy generation must double. It is estimated that by 2030, two thirds of the electricity generation must come from renewables (which as of 2020 was only 28% of electricity production, with the majority coming from existing hydropower projects). More than half of the current growth of renewables, 60%, is in wind and solar; however, much more effort is needed to meet the ambitious net-zero goals.

Increased Electrification

Electric vehicles (EVs) are just one way that the world can adapt to net-zero. In 2019, EVs represented 2.6% of global car sales, an increase of 40% from the year prior. Many countries around the world have goals to stop selling fossil fuel vehicles by 2050 and some are even banning gas and diesel car sales as early as 2030. EVs not only use electricity (which can be generated from clean sources such as renewables or nuclear) but are also up to five times more efficient than conventional cars.

The main challenge with EVs will be changing consumer behavior, with common concerns being: finding a charging station, reliability issues, and the length of time it takes to “fuel up” or charge. We’ve found with our own PHEV, that while we have the hybrid ICE engine to fall back on, we’re rarely use it and have settled on our next car being fully electric.

Energy Efficiency

Thermostat Carbon Neutral and Net Zero
Photo by Dan LeFebvre

Energy efficiency is predicted to reduce 40% of emissions by 2040, according to the International Energy Agency’s (IEA) Sustainable Development Scenario. This solution has the lowest cost as it does not require new infrastructure but instead retrofitting existing buildings and processes with energy efficient measures such as better temperature controls, insulation, efficient lighting, energy management systems, and upgraded heating/cooling systems.

Governments can pave the way for energy efficiency by introducing new building codes that require certain energy standards as well as performance levels for energy efficient appliances. Low-interest loans can be made available for impoverished areas and public housing, with these investments also creating jobs within the local community.

Working to improve your own energy efficiencies on a personal level is a great way to not only make an impact on your carbon footprint but could also have a positive impact on your wallet as well.

Carbon Capture

Carbon capture will also play a crucial role in attaining carbon neutrality. Most scientists believe that we cannot plant trees fast enough to remove enough carbon dioxide through photosynthesis, so a combination of solutions is needed. Carbon capture and storage (CCS) technologies include removing carbon from the air and burying it deep underground. One of the first examples of CCS was injecting carbon dioxide into an oil field to enhance oil retrieval.

A new invention includes a sponge that becomes saturated with CO2, which can be removed through heat and then reused in food processing or combined with hydrogen to produce synthetic fuels. These methods are inherently expensive, so in order for these solutions to make economic sense, a price will have to be put on carbon emissions to incentivize their use.

One proposed carbon capture project that can help the United States reach its net-zero goals is the CCS Houston, located strategically in the energy capital of the world. The carbon dioxide would be pumped miles under the Gulf of Mexico through pipelines and stored offshore in saline layers, well below the ocean floor. This megalithic undertaking is supported by top oil and gas companies such as Shell, ExxonMobil, Chevron, Marathon Petroleum, NRG Energy, and Valero, to name a few.

Initially drafted by ExxonMobil’s Low Carbon Solutions in 2021, this carbon capture project aims to capture all of the carbon dioxide emissions from the local petrochemical, manufacturing, and power generation facilities: 50 million annual tonnes by 2030 and 100 million annual tonnes by 2050. For comparison, in 2019 the US produced 5.1 billion tonnes of energy-related carbon dioxide emissions, so this one CCS project (which would be the largest in the world) could potentially capture up to 2% of the country’s energy sector carbon emissions. A minimum of $100 billion in investment is needed to build this endeavor, and ExxonMobil is seeking government policies, incentives, and financing to make this project a reality.


Net-zero, which includes balancing the production of all greenhouse gases with the amount removed from the atmosphere (unlike carbon neutral which only refers to carbon dioxide), was once seen as an impossible feat. This monumental goal, however, is technologically feasible and achievable globally by 2050 through four main pathways: clean energy, electrification, energy efficiency, and carbon capture. This energy transition will come at a cost though, $9.2 trillion of annual spending on physical assets to be exact, and will need all the support of government incentives, financing, and performance standards to make this viable. Through the net-zero transition, a sustainable world is possible.