Skip to Content

What are offsets?

Environmental offsetting enables a company, country or individual to be legally or morally allowed to pollute or otherwise damage the environment as long as they pay someone else somewhere else to attempt to compensate for some or all of the negative consequences. The most common offsets are carbon offsets and biodiversity offsets, but there have been discussions about introducing ecosystem and even cultural offsets.

This section focuses on carbon offsets. To read more about biodiversity or other offsetting visit

What are carbon offset projects?

Carbon offsets create carbon credits which businesses, countries and individuals can buy to compensate for emissions reductions they would otherwise have to make. Carbon offsets are a key part of most existing and planned carbon trading schemes, though they have now been ruled out of the EU Emissions Trading System from 2020 onwards. Carbon offset credits can be bought voluntarily by those wishing to assuage guilt or show their green credentials, but the majority are bought by businesses and governments legally bound to reduce their emissions, or by governments seeking to strengthen the carbon trading market.

Carbon offsetting in general has a number of systemic flaws, most of which are dealt with in Fern’s report Trading Carbon. How it works and why it is controversial and briefing Designed to Fail. Carbon Trade Watch also outlines a number of offsetting projects that have intended and unintended negative consequences.

Forest carbon offsets are particularly problematic as forest carbon sinks can easily become carbon sources. Carbon dioxide through deliberate human activities such as intensified forest harvests and changes in land use, as well as natural events such as pest infestations, diseases and forest fires. Other concerns unique to forest carbon offsets are the impossibility of measuring the amounts of carbon being stored and sequestered by forests. For more information about the problems with forest carbon offsets see Carbon Discredited: Why the EU should steer clear of forest carbon offsets and Counting the cost: forest credits and their effect on carbon markets.


Most recent publications

Double-counting forest emissions threatens global climate agreement

As officials from more than 190 nations gather in Bonn to prepare the ground for a future global climate agreement, new research draws attention to the risk that accounting for tropical deforestation could mean actual emissions are higher than those reported to the UN.

PDF iconWho takes the credit_Final.pdf307.17 KB

Fight against climate change threatened by faulty carbon calculations

As the EU debates climate and energy measures for 2030, FERN releases new evidence which shows that calculating emissions by lumping carbon emissions from fossil fuels together with those created by terrestrial sources hinders efforts to combat climate change.

Misleading numbers summary

This is the summary version of misleading numbers. It outlines that fossil and land-based carbon are not interchangeable and that emissions from fossil fuels cannot be negated by increasing or protecting the storage potential of forests and other land based carbon.

PDF iconmisleadingnumbers_summary.pdf439.22 KB

Misleading numbers: The Case for Separating Land and Fossil Based Carbon Emissions

The word ‘carbon’ appears with relentless ubiquity in the news and in government policy and legislation. It is discussed as if it were a simple, almost abstract and easily quantifiable substance. However, like many ubiquitous words or concepts, the term ‘carbon’ needs some unpicking. The report outlines that accounting for land use carbon emissions is imprecise, costly and resource intensive, and the word ‘accounting’ — which implies real numbers — is misleading. 

State Aid and climate change: when good ideas go bad...

This press release comes at a time when the European Commission is discussing its State Aid guidelines for environmental protection. It raises concerns that changes made to State Aid legislation last year that permit Member States to subsidise the EU’s worst polluters are not on the agenda. It links to FERN's new presentation about how State Aid is being used to fund climate change (link).

PDF iconState Aid PPT Release_Final.pdf73.31 KB