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From offsetting to insetting: the next leg in the race to decarbonize industry

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By Venna Lepel

· 5 min read

The conversation surrounding the race to net zero has included a number of solutions to support what is increasingly being seen as a necessity in the coming decades. The date which has been most commonly thrown around is 2050, giving companies and governments less than 30 years to make the shift to more sustainable practices, including an eventual large-scale shift to a circular economy model. What is understood by those in the know, however, is that this 2050 goal is largely an arbitrary number – what it represents is a more attainable long-term goal. Any expert in the field can attest to the need for faster action to ensure ecological stability and, in turn, the need for new methods to support the greening of the industry.

One very common “tool” that has been employed by larger companies to improve their sustainability metrics is the purchase of carbon offsets. Carbon markets exist under both mandatory (compliance) schemes and voluntary programs. Such compliance carbon offsets refer to purchasing the rights to the carbon allowance of another more sustainable company. This is seen often in the auto industry, with legacy automakers for years lining Tesla’s balance sheets by purchasing their carbon offsets instead of making their own practices more environmentally friendly. This poses an important question: is it enough simply to have new emerging companies comply with sustainability metrics, while the rest continue to operate unsustainably for years or even decades into the future? Common sense would suggest not – this is where insetting comes into play

Insetting takes a much different approach to offsetting to decrease carbon emissions across industries, opting instead to pursue sustainability in a matter which in itself is actually sustainable in the long term. Insetting refers to projects that happen within a company’s supply chain, helping them to shift to more sustainable means of operation instead of paying someone else to offset their emissions. It’s a way of bringing companies more in sync with the environment by targeting the entire value chain and rethinking certain processes from the ground up.

One of the most promising tools at the ready for companies looking to pursue this new model of sustainability is in the building and utilization of pyrolysis plants. These plants allow them to capture carbon from the atmosphere and avoid emissions at the same time, as they are producing carbon neutral energy and a high value product, that can substitute fossil based materials: biochar. This biochar can be fine-tuned to serve a number of purposes, from soil improvement and water retention to drinking water filtration, or substituting cement or other high carbon based materials. In addition, the pyrolysis process generates climate-neutral heat, which can help companies shift more quickly from fossil fuels to green heat generation. The input materials for this process can be as varied as the outputs, allowing companies to utilize excess wood waste and industrial by-products along with a wide range of biogenic residues commonly produced in a wide range of sectors.

The key to insetting lies in integrating carbon-reducing practices into already existing value chains. Suppliers can also be involved here in order to make the entire supply chain more sustainable in the long term. This will allow companies to drastically reduce their environmental impact while better preparing their business to thrive in a low carbon future. Insetting helps to better integrate business practices, finding synergies that allow for a more efficient, holistic and sustainable utilization of resources. 

One of the biggest barriers to encouraging greater use of insetting solutions for hard-to-abate emissions so far lies in the complexity of implementing them. For established companies, especially in the industrial sphere, pursuing other carbon-reduction strategies apart from the standard has presented itself a time and resource intensive endeavor. This has changed during the last years thanks to the evolving CDR-market coming up with innovative, holistic technologies, that even go beyond avoiding emissions.

Today’s industrial insetting solutions deliver more value than carbon offsetting, while some even avoid the need to design and implement the solutions on their own. In plain English: insetting builds a more sustainable relationship between industry and nature – and the emerging biochar economy stands to play a major role in facilitating the shift from offsetting to insetting across industries.

Leading biochar companies have developed innovative circular business models, that take the complexity of insetting out of the hands of companies, so they can remain focused on their main goals. Insetting, through the utilization of pyroysis plants, enables companies to decarbonize on multiple levels: They can avoid emissions through 

  1. The substitution of fossil fuels through climate-neutral heat generated in the pyrolysis process
  2. Re-using of waste material or biogenic residues as biomass for the pyrolysis process

The biochar, the end product in which the carbon of the biomass is captured, once applied in e.g. agricultural soils or building materials, acts as a carbon sink. In addition to lowering the carbon footprint of these products and practices, carbon removal credits can be created and sold on voluntary carbon markets. To take the integrated approach to an even higher level, companies can purchase these carbon credits themselves and thereby count them as CDR insetting.

The pyrolysis technology itself is not novel, but the streamlined, holistic approach to easily implement it for companies represents a major step in ensuring insetting even of hard-to-abate-emissions can replace offsetting as the de facto industrial carbon reduction strategy for the next generation. Thereby always following the important rule on the path to net zero: Reduce to the best, remove the rest.

This article is an updated version of the article published on Novocarbon. illuminem Voices is a democratic space presenting the thoughts and opinions of leading Sustainability & Energy writers, their opinions do not necessarily represent those of illuminem.

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About the author

Venna Lepel is CCO/CMO of Novocarbo, a biochar carbon removal company where she is in charge of the Carbon Credit Business Unit. Venna is also a board member of the Negative Emissions Platform in Brussels.

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