Webinar: Demystifying Carbon Offsets

About this update

This dated news record has been reorganised for clear reading and connected to current guidance.

Publication date: March 16, 2022.

Status note: Present-tense statements, market figures, deadlines and program details in the archived record belong to its publication date. Check current official sources before making a decision.

What this article reported

Your company has just announced these big, ambitious net-zero goals involving offsets and everyone's excited; but there's one giant question, how will you make this happen?

Navigating the different programs, mechanics of the certificates and offsets, plus all the rules can seem complicated. During this webinar, our carbon strategy and offsetting experts will take you through all the basics, the role carbon offsets play in your decarbonisation journey, the rules and you will leave with practical sector-specific advice.

Northmore Gordon is a carbon and energy consultancy in Australia and South East Asia. Over the past few years, we have seen a clear trend with more and more businesses developing roadmaps and strategies for moving towards a carbon-neutral operation - we hope providing webinars like this can assist businesses in making better energy efficiency decisions as we near closer to our 2030 targets.

Demystifying Carbon Offsets webinar promotional graphic

In this webinar, we discussed:

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About the Presenters:

Alan Wang - Northmore Gordon
Alan Wang - Principal Consultant

Alan Wuyi Wang - Alan, B.Eng (Electrical), Hons, CMVP, CEM is an Electrical Engineer with over 7 years experience in the energy field, specialising in industrial and large commercial energy efficiency, process engineering, waste treatment process, carbon strategy, renewable electricity, bioenergy and cogeneration projects. Technical expertise includes measurement and verification, energy management, energy efficiency opportunity assessments and feasibility, business case studies and government grants, Australian energy market, lighting designs, certificates and carbon credits, and digital data platforms.

Patrick Blain - Northmore Gordon
Patrick Blain - General Manager Certificates

Patrick Blain - Patrick holds a Bachelor of Engineering in Mechanical & Manufacturing and a Bachelor of Science from the University of Melbourne.

His previous experience includes project management, project engineering, and quality assurance across the Oil & Gas, Healthcare, Building Services, and Infrastructure sectors. Patrick is also a Certified Measurement and Verification Professional (CMVP).

Chris Warris - Northmore Gordon
Chris Warris - Principal Consultant

Chris Warris - Chris has over 20 years of experience working in a variety of roles across different industries such as power generation, oil and gas, academic research, sustainability and energy management and consulting. Chris has worked on a range of energy and carbon management projects including Energy Audits of large industrial & manufacturing facilities, food processing facilities, commercial office buildings, hospitals and aged care facilities; energy simulation modelling for BCA and NABERS Energy assessments; Greenhouse gas assessments and Energy & Carbon Management Program implementation.

Trent Hawkins - Northmore Gordon
Trent Hawkins - Principal Consultant

Trent Hawkins - Trent, B. Eng (Mech), is an experienced sustainability advisor in the food, fibre, and beverage sectors. Trent is passionate about partnering with producers and manufacturers to improve energy performance and decarbonise. Expertise includes energy and carbon strategy development, energy management systems, energy auditing and opportunities assessments, and project implementation support. Trent has a particular interest in decarbonisation of thermal energy systems through electrification, heat recovery, and waste to energy, and is a recognised leader in the industry investigating alternatives to fossil fuel energy systems.

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How to use this information now

For current use, confirm the applicable scheme rules, regulator notices, market date and reporting period. Keep historical prices or forecasts separate from present quotes and verified outcomes.

Separate source-reported facts from forecasts, targets and commentary. For a current project, retain the official source, version, effective date, assumptions and decision record in the evidence file.

What is the difference between carbon offsets and renewable energy certificates?

Carbon offsets and renewable energy certificates serve different accounting purposes and should not be treated as interchangeable. Offsets represent emissions reductions or removals from outside an organization's operations and are used separately from inventory accounting. Renewable energy certificates, such as LGCs or REGOs, represent renewable electricity attributes and are contractual instruments used in market-based Scope 2 accounting. The webinar emphasizes that purchasing an offset does not establish claims about physical energy reductions or renewable electricity use. Each instrument requires its own eligibility assessment, evidence framework, and retirement treatment according to the applicable reporting standard.

What does Northmore Gordon recommend considering before purchasing carbon offsets?

We emphasize that offsets should be part of a broader decarbonisation strategy, not a primary lever. Organizations should first reduce emissions through physical changes, operational improvements, and renewable energy procurement. The webinar discusses the role of offsets in addressing remaining emissions after these primary measures are exhausted. When offsets are selected, instrument selection requires environmental-attribute due diligence to verify integrity and validity before procurement and retirement. Organizations must establish their inventory boundaries, complete transition planning, and separate physical reductions from purchased offsets in their reporting to avoid overcounting or misrepresenting their decarbonisation progress.

How does Climate Active treat different types of offsets in its carbon-neutral certification?

Climate Active, Australia's government-backed carbon-neutral certification program, allows specific offset types depending on scope. For Scope 2 emissions, only large-scale generation certificates (LGCs) are accepted offsets. For Scope 1 and 3 emissions, Climate Active accepts ACCUs (Australian Carbon Credit Units), CERs (Certified Emission Reductions), RMUs (Removal Units), VCUs (Verified Carbon Units), and VERs (Verified Emission Reductions). Companies must measure their material emissions across all applicable scopes, reduce where possible, and offset the remainder using eligible instruments. Annual reporting is mandatory and published on the Climate Active website, ensuring transparency and accountability in carbon-neutral claims.

What are the key differences between ACCU projects and other international carbon credit schemes mentioned in the webinar?

The webinar covers distinct certificate pathways with different governance frameworks. ACCUs operate under Australia's scheme administered by the Clean Energy Regulator and require registration before project commencement, documented newness, and specific approved methods. International alternatives like CERs, VCUs, and VERs operate under different regulatory bodies and methodologies. The webinar discusses selling credits to government via Australia's Emissions Reduction Fund versus trading through third-party markets. Each scheme has separate eligibility criteria, monitoring requirements, and issuance processes. We advise that certificate quantity, eligibility, verification cost, and sale price are separate variables that must be assessed individually for each project rather than compared as identical units.

How should organizations structure their use of offsets within a decarbonisation roadmap?

Our delivery approach connects technical assessment, commercial decisions, and ongoing performance through six stages: assess opportunities, build the case, capture value through funding or certificates, deliver implementation with measurement and verification, procure energy and environmental attributes, and perform ongoing monitoring. Within this framework, offsets represent a later-stage consideration after physical reductions and renewable energy procurement are implemented. A transition workplan should connect each reduction opportunity to its owner, implementation dependencies, capital requirements, and evidence of progress, keeping physical reductions separate from purchased offsets. This structured approach ensures offsets are positioned appropriately as a complementary tool within a comprehensive strategy rather than a primary decarbonisation lever.

What documentation and verification requirements does Northmore Gordon recommend for offset purchases?

We emphasize environmental-attribute due diligence as part of carbon advisory services before procurement and retirement of offsets. Organizations should maintain a claim file containing the exact wording of any carbon-neutral or net-zero claim, supporting calculations, source documents, reporting period, assumptions, and approver identity. Evidence must distinguish forecast results from verified outcomes and avoid converting conditional or partial results into unqualified organizational claims. For ACCU projects specifically, documentation must verify registration status, applicable method, crediting period, and actual issued-unit records. Offset quality criteria should align with the applicable reporting framework, whether Climate Active, SBTi, or corporate sustainability reporting standards, ensuring integrity and credibility of carbon-neutral assertions.

Why does Northmore Gordon distinguish between Scope 1, 2, and 3 emissions when discussing offset eligibility?

Scope 1, 2, and 3 categorize different emissions sources and have distinct offset eligibility rules under various frameworks. Scope 1 covers direct emissions from owned sources, Scope 2 addresses purchased electricity, and Scope 3 includes value-chain and other indirect emissions. Different programs accept different offset types for each scope; for example, Climate Active allows LGCs only for Scope 2 but accepts ACCUs, CERs, or international credits for Scope 1 and 3. The webinar emphasizes that these scope categories are emissions-measurement classifications, not certificate types. Understanding scope distinctions is critical for selecting appropriate offsets, avoiding ineligible combinations, and making credible claims that withstand reporting and assurance requirements under applicable frameworks.

What role do international offset instruments like I-RECs, GOs, and TIGRs play in Northmore Gordon's carbon strategy advice?

The webinar discusses international renewable energy and offset instruments including I-RECs (International Renewable Energy Certificates), GOs (Guarantees of Origin), and TIGRs as options for organizations with global portfolios or operations outside Australia. These instruments operate under different regulatory frameworks and quality standards than Australian schemes. The webinar notes that organizations cannot create REGOs and LGCs for the same electricity generation, and similar restrictions apply to international instruments. Our moreData platform includes planned functionality to extend its emissions-factor library beyond Australia's current scope to support global portfolios. However, each international instrument requires separate assessment of eligibility, ownership rights, accounting treatment, and alignment with the organization's applicable reporting framework and voluntary commitments like RE100 or science-based targets.

How does Northmore Gordon help organizations avoid overcounting or misrepresenting emissions reductions when using offsets?

Our carbon accounting and advisory services establish carbon-accounting boundaries as a foundation for credible claims. Organizations must document what is included in their inventory, the reporting period, the applicable framework, data sources, and any exclusions. A transition workplan must separate physical reductions, renewable electricity attributes, and purchased offsets explicitly, preventing the same emission reduction from being claimed multiple times. Maintaining a claim file with exact wording, supporting evidence, assumptions, and approval ensures consistency between internal and public statements. The knowledge library guidance emphasizes that an inventory provides only a baseline; operational changes and investment decisions are separate actions requiring implementation and follow-through. Our measurement and verification services establish credible savings needed for reporting, funding decisions, and offset purchasing, reducing the risk of unsubstantiated or inflated reduction claims.

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