Alphabet Inc., Google's parent company, has shifted its environmental strategy from maintaining "carbon neutrality" through the purchase of carbon offsets to a focus on carbon removals, as outlined in its 2024 environment report. This strategic pivot reflects a broader trend in the industry towards prioritising carbon removal over avoidance credits. However, this approach raises important questions about the balance between removing and avoiding carbon emissions. Let's delve into the implications and rationale behind this significant change.
What happened?
Since 2007, Alphabet Inc. has achieved operational carbon neutrality each year by reducing energy consumption, purchasing renewable energy, and buying carbon credits. These credits were largely avoidance credits, which compensate for emissions by preventing them elsewhere, such as through forest conservation projects. However, Alphabet's 2024 report marks a departure from this approach. Alphabet will no longer maintain operational carbon neutrality but will instead invest in carbon removal initiatives that will deliver carbon removal credits by 2030.
Historically, Alphabet have maintained operational carbon neutrality using carbon credits.
Alphabet’s Goals and Commitments
Alphabet has set ambitious goals to reduce its carbon footprint:
Reduction Goals: Aims to reduce 50% of its combined Scope 1, 2, and 3 emissions by 2030, compared to the 2019 baseline. This involves enhancing energy efficiency, electrifying its fleet, and reducing the carbon footprint of its products and services.
Renewable Energy: Since 2017, Alphabet has matched 100% of its global electricity use with renewable energy purchases and is now working towards operating on 24/7 carbon-free energy.
Offsetting Strategies: To address remaining emissions, Alphabet is investing in nature-based and technology-based carbon removal solutions, including reforestation projects, soil carbon sequestration, and direct air capture technologies.
Moving Away from Carbon Neutrality and Avoidance Credits
In 2022, Alphabet increased its carbon offset purchases to 2.9 million tonnes from 2 million in 2021 but has since removed carbon offsets from its 2024 environmental data tables. The company will now no longer neutralise its residual emissions in the short term (2023-2030), but will instead allocate that capital towards supporting high-quality carbon removal projects that will deliver credits by 2030. This new strategy, which started in 2023, means Alphabet will no longer maintain operational carbon neutrality for the next seven years.
Starting in 2023, Alphabet are no longer maintaining operational carbon neutrality.
In March, Alphabet committed to at least $35 million worth of carbon removal credits over the next 12 months and joined a coalition to help tech firms contract 20 million nature-based removal credits by 2030. At the end of 2023, it signed deals for 62,500 tonnes of CO2 equivalent (tCO2e) removal credits, including biomass carbon removal, enhanced rock weathering, and direct air capture.
Despite these efforts, the quantities involved are significantly smaller than those volumes they had previously purchased for avoidance credits.
That isn’t to say Alphabet won’t make more commitments and purchases of removal credits out to 2030. But what about their emissions today?
Alphabet's historical and future commitments for carbon credit purchases.
What is driving Alphabet to move away from avoidance credits toward removal credits, and does this move make sense?
Alphabet’s rationale for this shift is twofold:
Scale: They aim to support solutions that can scale up to remove at least half a gigaton of CO₂ annually and be available affordably in the foreseeable future.
Certainty: They prioritise projects that rigorously assess additionality, leakage, permanence, and verifiability to ensure genuine climate impact.
Why Are Companies Focused on Removals Over Avoidance?
To understand this shift, let's go back to basics and examine the different types of carbon credits and the core principles behind a carbon credit.
Understanding Carbon Credits
For a carbon credit to be effective and credible, it must meet several core requirements:
Additionality: The carbon credit must incentivise new activities that would not have happened without the credit.
Permanence: The CO₂ avoidance or removal must be maintained for a specified period.
Quantification: The amount of CO₂ avoided or removed must be accurately estimated and measured.
Double Counting: Each tonne of CO₂ avoided or removed can only be claimed once to ensure market integrity.
Avoidance vs. Removal Credits
Avoidance Credits: Prevent CO₂ emissions that would have otherwise occurred, such as through forest conservation.
For example: a REDD+ project focused on preventing deforestation in the Amazon rainforest. Without this project, local logging activities might clear 4% of a 1,000-hectare area annually, resulting in significant CO₂ emissions. By implementing conservation measures, the project ensures that this deforestation does not occur, thereby avoiding the emissions that would have resulted from the destruction of the forest.
Removal Credits: Extract CO₂ out of the air and store it in trees, soil, oceans, or rocks.
For example: in contrast, an afforestation project involves planting trees on previously cleared land. For instance, planting trees on 1,000 hectares of degraded land can sequester CO₂ as the trees grow. This approach directly removes CO₂ from the atmosphere, but it takes time for the trees to mature and achieve significant carbon sequestration.
There are many different types of carbon credits.
Challenges with Avoidance Projects
Additionality
One of the primary controversies surrounding avoidance projects is the concept of additionality. For a project to be considered additional, it must demonstrate that the emission reductions would not have occurred without the project. This can be challenging to prove because it relies on hypothetical scenarios about what would have happened in the absence of the project. Critics argue that some projects may not be truly additional and could have happened anyway due to existing regulations or economic trends.
Quantification
Quantification is another contentious issue. Avoidance projects often rely on estimates and models to determine the amount of CO₂ emissions they prevent. For example, a forest conservation project must estimate how much CO₂ would have been released if the forest were cut down. These estimates can be uncertain and vary widely, leading to questions about the accuracy and reliability of the credits generated.
Permanence
Permanence refers to the longevity of the carbon storage provided by the project. For a carbon credit to be effective, the CO₂ must be stored permanently or for a specified long-term period, usually ranging from 25 to 100 years. Different projects offer varying degrees of permanence:
Nature-based Solutions: Reforestation projects typically require a long-term commitment to ensure the trees remain and sequester carbon. However, these projects are vulnerable to risks such as wildfires, pests, and other climate risks, which can release the stored CO₂ back into the atmosphere.
Technology-based Solutions: Methods like direct air capture and mineralisation tend to offer higher permanence, often measured in centuries to millennia. For example, carbon captured and stored in geological formations or through rock weathering is considered highly permanent due to the stable nature of the storage medium.
Acknowledging the Limits of Permanence in Nature-Based Solutions
Nature-based avoidance and removal projects will never have the same level of permanence as some of the technology solutions. However, this perspective ignores the fact that we cannot look at the carbon problem in isolation. The planet operates as an ecosystem, as Johan Rockström and his team demonstrate through the concept of planetary boundaries. We cannot just solve the carbon crisis in isolation; we need to address all planetary boundaries. Nature-based solutions address several of these boundaries, including:
Climate Change
Biosphere Integrity
Biogeochemical Flows (Nitrogen and Phosphorus Cycles)
Ocean Acidification
Freshwater Use
Land-System Change
Nature-based solutions, whether avoidance or removal, address these broader environmental challenges. Avoidance projects, in particular, do a much better job than nature-based removal projects at maintaining and protecting biodiversity.
Why Both Approaches are Necessary
However, this approach doesn't make sense from both an economic and environmental perspective. Let's consider the numbers:
Deforestation: Around 10 million hectares of forest are lost each year due to global deforestation.
Reforestation: Only 4.7 million hectares of forest are replanted annually.
If we focus solely on removal projects, the net loss of forests will continue, exacerbating the climate crisis. The World Resources Institute highlights that to meet the target of restoring 350 million hectares of degraded forest by 2030, we need to ramp up our restoration efforts to about 23 million hectares annually—a goal far from being met.
The Balanced Approach
A balanced approach that integrates both carbon removal and avoidance projects is essential. Companies should support a variety of projects:
Avoidance and removal solutions.
Nature-based and technological solutions.
Projects with different permanence periods.
Initiatives in both developing and developed countries.
Conclusion
We need corporates to buy credits from a diverse array of projects to address various aspects of the climate crisis. Immediate and robust action is required now, not in 2030 or 2050. Alphabet Inc. has the financial capability to support both carbon neutrality and the scaling of carbon removal projects. This balanced approach is crucial for making a significant and lasting impact on our planet's health.
Ultimately, if Alphabet Inc. want to have their soup and eat it too, their new strategy should support the scaling of carbon removal projects but not at the expense of avoidance projects. They can maintain carbon neutrality while investing in carbon removal solutions, demonstrating a holistic and effective approach to climate action and their commitment to their long-term sustainability goals.
Appendix:
Alphabet’s increasing emissions
Despite targets and efforts to directly reduce emissions, Alphabet’s emissions have been increasing. Both overall and operational emissions have risen, with a significant 32% increase from 2022 to 2023. This increase is driven by business growth, increased product usage, supply chain emissions, and the energy intensity of new technologies, such as AI.
Alphabet's total emissions have been increasing.
Largely driven by increases in its operational emissions.
A reminder on Scope 1, 2 and 3
Scope 1, 2, and 3 Emissions:
Scope 1 Emissions: These are direct emissions from sources that Alphabet owns or controls, such as fuel combustion in their data centres and company vehicles.
Scope 2 Emissions: These are indirect emissions from the consumption of purchased electricity, heat, or steam. Alphabet achieves this through energy-efficient infrastructure and renewable energy purchases.
Scope 3 Emissions: These encompass all other indirect emissions that occur in the value chain, including emissions from suppliers, business travel, employee commuting, and product end-of-life processing.
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