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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

NGO report busts the myths of the Emissions Trading Scheme

This press release European Parliament was launched in advance of a vote on the European Commission's proposal to backload 900 million emissions permits within the EU Emissions Trading Scheme (EU ETS). This vote assumes the EU ETS can be reformed, but ahead of the vote, a new report shows that the problems of the EU ETS are systemic and unresolvable. Keeping this failed system in place would further delay real action to reduce emissions in Europe.

EU ETS myth busting: Why it can’t be reformed and shouldn’t be replicated

Given the urgent need to limit  global warming, it is vital that the European Union (EU) gives itself the best tools with which to reduce greenhouse gas emissions. Since the launch of the EU's ‘cornerstone policy’ to reduce emissions — the European Union Emissions Trading System (EU ETS), emissions have risen; there is increased reliance on coal; the price of consumer energy has risen along with the profits of many industrial actors (as a direct result of the EU ETS) and millions of euros of public money have been lost in VAT fraud.

PDF iconMyths_internet.pdf1.23 MB

FERN launches new trilingual carbon trading blog

Not a day goes by without more evidence of failed carbon offsets, fraud and crime, and windfall profits for the industries who were meant to be penalised by putting a price on carbon. Even market actors are losing interest, and record numbers of carbon-trading desks are closing shop.

ETS reforms steal attention from measures that could actually work

FERN wrote this guest commentary for PointCarbon ( to highlight that the time has come to give up waiting for the "market" to deliver the structural changes needed to keep global warming below two degrees and start taking direct action.

PDF iconGuest commentary.pdf431.19 KB

Input to the consultation on structural options to strengthen the EU Emission Trading System

This input to the European Commission consultation on options to stregthen the EU Emissions Trading Scheme (ETS) was signed onto by 21 organisations. It raised only was concern, that the consultation excludes a fundamental, seventh option: ending the ETS by 2020 and replacing it with other regulatory climate policies. This is a serious omission that leaves this consultation incomplete as an input toward a legislative proposal. After two years of decline, the prices of emission permits and carbon credits have reached historic lows.

It is time for the EU to scrap its carbon emissions trading system

This press release accompanies a joint declaration by more than 90 organisations, networks and movements from all over the world. 'It is Time to Scrap the ETS' lists the structural flaws of the ETS and the risks of trying to fix it. The organisations supporting this declaration conclude: “It is time to stop fixating on ‘price’as a driver for change. We need to scrap the EU ETS and implement effective and fair climate policies by making the necessary transition away from fossil fuel dependency.”

PDF iconScrap_ETS_Press_Release_18Feb.pdf23.92 KB