Purchasing carbon credits to compensate for your carbon emissions, or simply to support climate solutions, is a great action to take as a business.

But how does the process work?

Before you get to the stage of purchasing carbon credits, you need to decide which projects you want to support. Always ensure you’re opting for high-quality projects, and we recommend prioritising carbon removal over emissions avoidance. 

What is a carbon credit?

A carbon credit is a unit used to represent emissions removal or reduction/avoidance, where 1 carbon credit is equal to 1 ton of CO2e reduction or removal.

Carbon credits are sold by projects designed with the purpose of carbon removal or emissions reduction – they issue an amount of carbon credits equivalent to the amount of carbon the project will remove or avoid. These credits can then be purchased by individuals or businesses who choose to offset their own emissions. 

In simple terms, the has 6 main stages:

1. Project design and validation
2. Monitoring
3. Verification and certification
4. Credit issuance
5. Transacting
6. Credits retired

Project design and validation

The project concept is developed. This includes conducting a feasibility study and defining the methodology – determining a baseline for impact, and putting monitoring in place to measure actual impact. The concept will be validated by a third party.

Monitoring

The project is implemented, and ongoing monitoring takes place to determine actual emissions reductions or carbon removal.

Verification and certification

The project monitoring is submitted to a third party to be audited, and if everything is in order the project can be officially verified and certified.

Credit issuance

Once certified, offset credits are issued in the registry of the certification organisation based on actual emissions reduced or carbon removed e.g. Verra or Gold Standard.

Transacting

The project developer sells these credits to wholesalers and brokers or sometimes directly to businesses or individuals, who want to compensate for their own emissions.

Credits retired

Once purchased, the credits are retired in the registry, indicating that they cannot be used further. A certificate is issued to the credit buyer, proving that they are the benficial owner of the carbon benefit.

This is the voluntary carbon market.

There are also compliance schemes for offsetting, wherein regulation mandates that companies (typically high-emitters like airlines and oil and gas) have a cap on the amount of greenhouse gases they are allowed to emit each year, and have to buy carbon offsets in the compliance market if they go over this.

How do we actually buy carbon offset credits as a business?

Traditionally businesses have worked with climate consulting firms who help them to measure the carbon footprint of their business and to purchase offset credits.

These consulting firms can buy offset credits directly from project developers, but more often there are multiple middle men involved in the process, and they add their own fee on top which tends to be pretty expensive. 

At Lune we’re changing this, making it as easy and cost-effective as possible for every business to integrate high-quality carbon offsets and removal into their service. We take a small fee when you purchase offset credits, which is typically more than 50% lower than traditional carbon offset providers, such as consultancy organisations. 

We also provide a much more integrated and flexible approach to embedding climate impact and carbon offsetting into your customer experience. There are many ways you can work with us, depending on your own goals:

• Full API integration: enabling automatic emissions calculation and guaranteed high-quality offsetting within your existing customer journey – including allowing your customers to choose which projects you support

• One-off purchases: access our dashboard to make manual purchases of carbon offset credits

• Offset links: create a link or QR code to a branded offsetting landing page to share in your newsletters or on social media, where your customers can make their own donations to high-quality projects.

Of course you can choose to purchase carbon credits directly from a project developer. However, we’d recommend working with a sustainability partner that you trust to ensure you’re approaching carbon offsetting in the right way, avoiding greenwashing.

Next steps

Interested in working with us as your trusted partner on carbon offsetting? We’d love to demo how this could work for your business – get in touch and we'll find a time to set up a chat.