Carbon Offsetting and Pricing Guidance

Guidance to empower industry to deliver an ambitious approach to carbon offsetting and associated carbon pricing that supports the shift towards net zero buildings.
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In March 2021, UKGBC published the Renewable Energy Procurement and Carbon Offsetting Guidance for Net Zero Carbon Buildings. Now two years on, the landscape in which the initial carbon offsetting guidance was published has evolved significantly.

This report aims to provide comprehensive guidance on voluntary carbon offsetting and pricing strategies that are specifically tailored for built assets (both new and existing) and to better equip those who purchase offsets or make investment decisions at building asset or organisational level to align with their climate goals and accelerate the wider transition of net zero.

The report highlights how carbon pricing can be used as a powerful mechanism to accelerate the decarbonisation of built assets and the wider industry. It is also stresses the need for greater ambition when setting an internal carbon price, given the cost of accredited carbon credits on the voluntary market don’t accurately reflect the full societal and economic cost of emitting carbon into the atmosphere.

Key aspects of the guidance include:

 

  • In recognition of a rapidly changing carbon market, the publication sets out three levels of ambition industry should work towards, with guidance to develop a pathway to adopt a leading approach.
  • A step-by-step process to enable real estate developers and investors to take a more holistic approach to ambitious carbon offsetting, which goes beyond basic procurement of voluntary offset credits.
  • Provides all practitioners with the vocabulary to describe key offsetting and internal carbon pricing terminology and principles.

Steps for setting an ambitious carbon offsetting plan

1

Prerequisite

Any approach to offsetting at the level of individual assets or projects is only credible if the embodied carbon and energy use limits (due to be set by the UK Net Zero Carbon Buildings Standard) have been met.
2

Set Objectives

Decide which approach will be taken, and set objectives to suit.
3

Set Price

There are various existing price proxies available, and organisations should carefully consider the range of options. .
4

Compensate for Emissions

Select a suite of projects that consider the specific challenges and opportunities with base offsetting, plus any stretch/leading objectives.
5

Review, Purchase and Disclose

Regularly reviewing the strategy is crucial to ensure it remains relevant, effective and offers the best outcomes for the objectives.

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Carbon Offsetting and Pricing Guidance

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Frequently asked questions and answers

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“While absolute emission reductions should always be the priority, offsetting is a fundamental part of any net zero transition plan. We’ve seen too many examples of this done badly and UKGBC’s guidance will help companies ensure they’re purchasing high quality offsets that support communities and positive outcomes – a win for the planet and the maturity and credibility of the offset market. We know that companies with science-based decarbonisation pathways that also commit to purchasing carbon offsets reduce emissions faster than those who don’t. We have an opportunity as a sector to take real leadership in this space and offset today what we cannot reduce, so that together we can accelerate the UK’s pathway to net zero.”
Andy Haigh Director, Climate Positive Solutions Grosvenor

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