Emission offsetting in industry – an effective solution or a facade of sustainability?

Emission offsetting is the act of balancing greenhouse gas emissions – most often CO₂ – by investing in projects that reduce emissions elsewhere or remove them from the atmosphere. This means that a company unable to eliminate its own emissions can “offset” part of them by supporting external emission reduction activities.

Offsetting can take various forms: from tree planting, to investments in renewable energy sources, to supporting energy efficiency projects in developing countries. The most important aspect is that emissions do not disappear – they are simply balanced elsewhere.

Companies decide to offset emissions for several reasons, stemming from regulatory pressure, market expectations, and long-term climate strategies. One of the most important factors is the requirement to reduce greenhouse gas emissions. This applies especially to energy-intensive enterprises, where emissions are generally very high. In many cases, these companies struggle to meet required emission limits – even after implementing reduction measures. Offsetting then becomes a tool that helps them move closer to climate targets and avoid consequences related to exceeding allowable emission levels.

For some companies, emission offsetting is also part of their responsible business strategy – especially when the enterprise has declared achieving climate neutrality or reducing its carbon footprint by a specific year. In such cases, offsetting complements measures in energy efficiency, technology modernisation, or transition to renewable energy sources.

Examples of reasons why companies want to offset emissions:

• meeting regulatory requirements – some companies operate in emission trading systems (e.g., EU ETS) where they must hold emission allowances or demonstrate progress towards climate neutrality,
• corporate goals – more and more corporations declare zero-emission strategies or net carbon footprint reductions, and offsetting can help achieve these goals faster, before technological changes are possible,
• investor and customer expectations – sustainable development is becoming a competitive advantage. Transparency in climate action affects brand image and purchasing decisions,
• short-term flexibility – industrial plant modernisation can take several years (considering design, permits, and implementation), while emission offsetting can be implemented faster and at a lower initial cost.

Well-designed and meaningful offsetting actions can bring many benefits:

• quick climate impact – projects can be implemented where emission reduction is most cost-effective,
• ability to act “here and now” – before new technologies are implemented, companies can reduce their carbon footprint through offsetting,
• support for sustainable development – many offset projects improve the quality of life in local communities (e.g., access to clean energy, water, healthcare),
• facilitating ESG strategies – climate action is an important part of non-financial reporting and building a responsible value chain.

Emission offsetting is not without drawbacks:

• risk of greenwashing – if a company uses offsetting as its only climate action without reducing its own emissions, this can be seen as an attempt to improve image without real change,
• verification difficulties – not all projects are equally reliable. Poor-quality certificates can lead to “paper” emission reductions with no climate benefit,
• lack of local impact – offsetting in another country does not improve the environmental situation at the company’s location.

Emission offsetting can be an effective and valuable tool – provided it is used responsibly. It should be treated as a complement, not a replacement, for reduction actions. If a company invests in energy efficiency, modernises installations, reduces fossil fuel use, and at the same time offsets unavoidable emissions – this is a coherent and logical strategy.

On the other hand, a situation where a company does nothing to reduce emissions and only buys cheap certificates can be perceived as an attempt to mislead customers and stakeholders. In such cases, emission offsetting indeed becomes a greenwashing tool. It is also worth noting that on a larger scale, offsetting emissions, for example through tree planting, can simply be uneconomical and undermine the whole effort. Why?

In one of DB Energy’s projects at Soufflet Maltings in Poznań, thanks to several combined energy efficiency solutions, we reduced the client’s emissions by 9,543 tonnes of CO₂ annually. By comparison, to offset the same amount of emissions through tree planting, more than one million trees would need to be planted, each absorbing an average of 8 kg of CO₂ per year in the first five years. In the case of pine seedlings, which can be planted at the highest density per hectare, this number of trees would cover an area equivalent to more than 200 football pitches!

As shown in the Soufflet example above, with a well-designed energy efficiency project we reduced emissions by 9,543 tonnes of CO₂ – a significant change. For our client, this meant a 40% reduction in the company’s emissions from fuel combustion and energy consumption. However, we know that not all emissions can be reduced, which is why the term net zero is used – meaning zero net emissions. This term does not mean that there are no emissions at all – it means emissions are reduced to a minimum, and the remainder can be offset. These are so-called residual emissions – those that cannot be avoided. For industrial companies with particularly high emissions, investing first in energy efficiency technologies is a more effective and lasting solution than relying solely on emission offsetting.

Emission offsetting in industry is a tool that, when applied correctly, can play an important role in the energy transition while also helping to improve the climate. It enables a reduction of the carbon footprint in areas where other measures are not possible. However, it requires a responsible approach, transparency, and viewing it as one of many elements in a climate strategy – not as a simple way to “buy a clean conscience.” Emission offsetting should be seen as a supplement to a broad decarbonisation strategy, where the main focus is on reducing emissions at the source. Only such an approach guarantees lasting benefits for both the environment and the company itself, supporting real transformation towards sustainable development.