So what IS the difference between carbon neutral and net zero?

Our partner, Edwards, helps to define some of the key words and phrases we all need to understand when looking at reducing our emissions.

While terms such as ‘carbon footprint’ and ‘global warming’ have (unfortunately!) become part of our everyday vocabulary, there are lots of other words and phrases used in discussion about climate change.

Although some sound similar, it’s important to understand the terminology as they can have quite different meanings and companies that don’t use the correct terms could even be at risk of ‘greenwashing’!

Thankfully, Edwards, a leader in the global semiconductor industry and one of our partners, has helped us compile a glossary of the terms we all need to know.


Greenhouse Gases (GHGs)

Light from the sun hits and warms the earth. The earth then re-emits some of that warmth as infrared radiation.

Just like a greenhouse in a garden keeps the sun's warmth contained, the greenhouse gases in our atmosphere absorb the infrared light and become warmer. This warming atmosphere creates changes in our environment and the warmer the temperature, the more severe the changes.

Carbon dioxide is the most well-known greenhouse gas as it makes up over three quarters of our greenhouse gas causing emissions, but there are several others including methane and nitrous oxide.

Greenhouse Gas Protocol (GHGP)

The Greenhouse Gas Protocol (GHGP) is a partnership organisation that has established standard frameworks for companies to enable them to measure and manage greenhouse gas emissions. The Protocol has defined three 'Scopes' of emissions which correlate to who owns those emissions and the level of control applicable to changing those emission levels at each stage.

  • Scope 1 – Direct GHG emissions directly from operations that are owned or controlled by the reporting company (boilers, vehicles, process gases).

  • Scope 2 - Indirect GHG emissions by others from the generation of purchased or acquired electricity, steam, heating, or cooling consumed by the reporting company.

  • Scope 3 - All indirect emissions (not included in scope 2) that occur in the value chain of the reporting company, including both upstream (from suppliers) and downstream (transport, distribution, storage).

Read more about how emissions are categorised and why businesses need to measure them in this guide.

Carbon Neutral versus Net Zero

The terms 'carbon neutral' and 'net zero' are often used interchangeably but are very different.

Carbon neutrality is defined as “a condition in which during a specified period there has been no net increase in the global emission of greenhouse gases to the atmosphere as a result of the greenhouse gas emissions associated with the subject during the same period”. 

Net zero definitions can also vary although the international charity CDP (previously known as the Carbon Disclosure Project), defines net zero targets that include GHGP scope 1, 2 and 3 emissions and must align to the 1.5°C science-based target.

Carbon neutrality for an organisation only requires Scope 1 and 2, and carbon offsetting is often used to get to neutrality. Scope 3 emissions are encouraged but not mandatory, and the level of temperature ambition for carbon neutrality is rarely specified.

So what's the difference between the two? In layman's terms, carbon neutrality refers to offsetting your carbon emissions with carbon-capturing activity (so although you are still producing carbon, you are capturing just as much as you produce). Net zero takes this further, and suggests that no carbon is emitted from the start, so nothing needs to be captured or offset - we can strive for net zero by opting for renewable energy, electric vehicles and non-polluting alternatives. 

Carbon Offset

Carbon offsets are emission reductions achieved through a compensatory activity rather than at source.

In 'cap-and-trade' schemes, companies are assigned emission 'caps' or limits they must not exceed.

If they cannot meet the cap, they can invest in a programme that reduces emissions outside their sector, generating a carbon offset, which they can then apply against their own emission to meet the cap.

Carbon offset investments could include reforestation, tree planting, renewable energy, methane capture/combustion, and more.

It's important to note that offsetting should only be used after an organisation has done all it can to reduce emissions; so that we are striving to cut our overall carbon emissions completely rather than simply offsetting the damage.

Whilst carbon offsetting is a good practice, the more that companies can do to authentically reduce their carbon emissions, the more cost effective it will be in the future, when larger organisations will start paying for their carbon emissions through carbon taxation.

Carbon Capture

The technologies used to capture and use or permanently store carbon dioxide are known as Carbon Capture and Storage (CCS) or Carbon Capture, Utilisation and Storage (CCUS).

Both of these technologies separate carbon dioxide (CO2) from the exhaust gases of industrial processes by using CO2-absorbing chemicals, pressure changes or membrane filters.

Potentially, CCS can permanently store huge amounts of CO2, or alternatively CO2 can be used as a raw material to make plastics, concrete, chemical reactants, and synthetic fuels.

Capturing CO2 uses energy, but work is ongoing to reduce both the energy use and other costs.


Decarbonisation means reducing carbon dioxide emissions resulting from human activity, with an eventual goal of eliminating them entirely.

The 2015 Paris Agreement set an ambition to limit global warming to less than 2°C above pre-industrial levels and pursue efforts to limit it to 1.5°C which can be achieved in part if we reach net zero by 2050.

Getting to net zero emissions requires systemic and economic change, most importantly, shifting our reliance from fossil fuels to alternative low-carbon energy sources based on green electricity and green molecules (biofuels and hydrogen). Decarbonisation needs to be accelerated if we are to achieve the net zero goals.

Science Based Targets Initiative (SBTi)

Established in 2015, the Science Based Targets initiative (SBTi) is a global collaborative partnership that helps companies set emission reduction targets in line with climate science.

An emissions reduction target is defined as 'science-based' if it is developed in line with the scale of reductions required to keep global warming below 1.5°C from pre-industrial levels. To date, over 2,000 businesses have joined the initiative and set science-based targets to reduce their company's greenhouse gas emissions.

Setting a science-based target through the SBTi website is a five-step process:

  1. Commit: submit a letter establishing your intent to set a science-based target
  2. Develop: work on an emissions reduction target in line with the SBTi’s criteria
  3. Submit: present your target to the SBTi for official validation
  4. Communicate: announce your target and inform your stakeholders
  5. Disclose: report company-wide emissions and track target progress annually

'Greenwashing' is when a product or service is marketed to be more environmentally friendly than it really is. Since the start of 2022, the Competition and Markets Authority (CMA) has been reviewing both online and offline marketing against their 'Green Claims Code' and companies that are found to be making misleading or false claims could have action taken against them, so it's really important to get to grips with green terminology.

Are there other terms you want more information on? Or would you like to let us know how you're getting to net zero? Find out how you can get involved with Action Net Zero and be part of the change.