Climate Commitments

Last updated on 2025-02-28 | Edit this page

Estimated time: 20 minutes

Overview

Questions

What methodologies are available to reduce carbon emissions and how do they differ?
What is the difference between “net zero” and “carbon neutral” climate commitments?
How can organisations match renewable energy availability to demand?

Objectives

Understand different carbon reduction methodologies and their role in meeting climate commitments.
Appreciate the difference between “net zero” and “carbon neutral” climate commitments.
Understand matching strategies for energy from renewable sources.

Introduction

In recent years, many economic actors have sought to reach different climate goals by making various commitments.

The terms “net zero”, “carbon neutral”, “carbon negative” and “climate neutral” have been used interchangeably with the primary objective to remove, reduce and prevent carbon emissions. As interest in these targets grows, it is essential to have a common understanding of what they mean and how to achieve them through the strategies and measurement procedures we have learnt.

Carbon reduction methodologies

There are many ways to reduce emissions but it’s important to understand the exact mechanism of the reduction when thinking about reduction targets.

Diagram illustrating carbon reduction strategies

Abatement / Carbon Elimination

The Science Based Targets Initiative refers to a mechanism called abatement, which means eliminating sources of CO₂ emissions associated with an organisation’s operations and value chain so that they do not enter the atmosphere. The value chain describes the full range of activities needed to create a product or service, from conception to distribution. This includes increasing energy efficiency to eliminate some of the emissions associated with energy generation.

Abatement is not enough on its own as there will always be some emissions that can’t be eliminated due to technological or economic constraints, but it must form the core of every organisation’s strategy as it is an area where almost every organisation can improve.

To balance those residual emissions, we need to look at other mechanisms such as offsets, compensations or neutralisations.

Offsets

Offsets are direct investments in emission-reduction projects through the purchase of carbon credits on the voluntary carbon market (VCM). The VCM is a decentralised market where private actors voluntarily buy and sell carbon credits that represent certified removals or reductions of GHGs from the atmosphere.

To offset emissions, you need to purchase the equivalent volume of carbon credits to compensate for those emitted, where 1 carbon credit corresponds to 1 tonne of CO₂ absorbed or reduced.

Various positive benefits can stem from these projects, from ecosystem protection to empowering local communities. However, to ensure these programs are implemented correctly and have the desired effect on the environment and the aim to reach world net zero, there are global standards that they must meet such as Verified Carbon Standard (VCS) and Gold Standard (GS).

SCI and Offsets

There are some limitations to carbon offsets and that is why they are not considered in an SCI score. For example, imagine two applications, both running on a HPC service that is 100% carbon offset and matched 100% by renewable energy. Application A has invested significant time and resources into making sure it is using resources efficiently, whereas application B uses resources very inefficiently. For the SCI to be a helpful metric, application A needs to score better than application B.

If the SCI considered offsets, both applications would score 0. This wouldn’t tell us anything about how efficiently they are using resources. Although application B is emitting more carbon molecules into the atmosphere per unit of output, since its score is 0 and the lowest score is 0, why would it make further investments into improving its carbon efficiency?

HPC services and users need to have plans for how to both eliminate as well as neutralise emissions and the SCI helps them to drive the elimination of emissions due to software running on HPC services. This makes the SCI an useful component to help a research project or HPC service reach net zero.

Compensating / Carbon Avoidance

Compensations are actions that organisations or individuals can take to help society avoid or reduce emissions. This is essentially investing in other organisations’ abatement projects.

This includes actions such as:

Conservation - Credits are created based on carbon not released through protecting old trees.
Community Projects - These projects help communities worldwide, mainly undeveloped ones, by introducing sustainable living methods.
Waste to energy - These projects capture methane/landfill gas in smaller villages, human or agriculture waste, and convert it into electricity.

Neutralising / Carbon Removal

Neutralisations are actions that organisations or individuals take to remove carbon from the atmosphere. Neutralisations refer to the removal and permanent storage of atmospheric carbon to counterbalance the effect of releasing CO₂ into the atmosphere. This includes actions such as:

Enhancing natural carbon sinks that remove CO₂ from the atmosphere. For example, forest restoration, since photosynthesis removes CO₂ naturally. Forest expansion comes with challenges as it’s essential not to impact the dynamics of farmland and food supply elsewhere. Modern farming methods can also prolong the time carbon remains stored in soil.
Direct air capture is the process of capturing CO₂ from the air and storing it permanently, either underground or in long-lived products like concrete.

The effectiveness of these methods is typically measured based on whether they can deliver carbon removal at the scale and speed needed.

When it comes to carbon removal projects, durability is a critical consideration. The durability of a project describes how long the carbon dioxide will be kept from the atmosphere.

Short-term durability is up to 100 years, medium-term is 100 to 1,000 years, and long-term is more than 1,000 years.

Solutions that rely on Earth’s natural carbon cycle have short-term durability measured in decades. For example, forestry projects have a durability of 40 to 100 years.
Engineered solutions such as direct air capture often have long-term durability measured in millennia. For example, direct air capture has a durability of 10,000 years.
Long-term projects are typically orders of magnitude more expensive than short-term projects. Once emitted, carbon remains in the atmosphere for 5,000 years. To be considered net zero, carbon that has been emitted needs to be permanently removed.

A short-term carbon removal project will only remove carbon for 100 years, after which it’s back in the atmosphere warming up our planet. This is one of the reasons why abatement is preferred to neutralisation. Never releasing carbon is far better than releasing carbon and then trying to keep it out of the atmosphere for 5,000 years.

Climate commitments

There are many different emissions reduction strategies that an organisation can commit to, from carbon neutral to net zero. Understanding the different meanings and implications of each one and finding out which are used by the facilities you use helps you understand how your use of HPC fits within wider climate goals.

Diagram illustrating different emissions reduction strategies

Carbon Neutral

To achieve carbon neutrality, an organisation must measure its emissions, then match the total to its emissions offsets through carbon reduction projects. This can include carbon removal projects (neutralisations) and carbon avoidance projects (compensations).

Carbon neutrality is defined by an internationally recognized standard: PAS 2060. Although this does recommend an organisation sets abatement targets, it doesn’t demand they reduce their emissions. So to be considered carbon neutral, an organization can just measure and offset without investing resources in eliminating their carbon emissions.

To be carbon neutral, you must cover direct emissions (scope 1 and 2). The general expectation is that organizations measure and offset their scopes 1 and 2, and business travel from scope 3. However, there is no specific requirement to include that.

Carbon neutral is a significant first step for any organisation since it encourages measurement. However, there are not enough carbon offsets in the world to offset the emissions of all the organisations. Therefore, any strategy that doesn’t include abatement will not scale or help the world achieve the 1.5°C target set by the Paris Climate Agreement. This is where net zero comes into play.

Net Zero

Net zero means reducing emissions according to the latest climate science and balancing remaining residual emissions through carbon removals (neutralisations). Net zero, by definition, requires emissions reductions in line with a 1.5°C pathway. All organisations must do this to achieve net-zero global emissions by 2050.

The critical differentiator between net zero and carbon neutral is net zero’s focus on abatement rather than neutralisations and compensations. A net-zero target aims to eliminate emissions and only to use offsetting for the residual emissions that you cannot eliminate

The standard for net zero is being developed by the Science Based Targets initiative (SBTi). They calculate that there is a 66% probability of limiting global warming to 1.5°C if we reach a level of abatement of about 90% of all GHG emissions by mid-century. So, to meet a net-zero target, an organisation needs to eliminate 90% of its emissions by 2050. The remaining emissions can only be offset using neutralisations and permanent carbon removals.

A net-zero strategy would mean that the actual amount of carbon in the atmosphere remains constant.

Also, to be a net-zero target, you must cover direct and indirect, i.e. supply chain emissions (scopes 1,2 and 3). This is significant since scope 3 often represents the majority of emissions.

Fo HPC facilities, part of these strategies include educating and putting policies and approaches in place to support users to understand and take action to reduce their emissions and maximise the carbon efficiency of their HPC use.

SCI as part of a Net-Zero strategy

The SCI is a metric specifically designed to drive the elimination of emissions. The only way to reduce your score is to invest time and resources into actions that eliminate emissions. The only activities the SCI recognises as elimination actions are making your application (use of HPC, in the specific case of HPC systems) more energy-efficient, more hardware efficient, or consuming lower-carbon energy sources. Offsets are an essential component of any climate strategy; however, offsets are not eliminations and therefore are not included in the SCI metric.

Any net-zero strategy needs to have plans for how to both eliminate as well as neutralise emissions. The SCI helps organisations and users drive the elimination of emissions due to software. This makes the SCI an useful component of any net-zero strategy for operation and use of HPC systems.

100% Renewable

When organisations set a target of 100% renewable power, they might distinguish between being matched by vs. powered by renewable energy sources.

Powered by means you are directly powered by a renewable power source, say a hydro dam. In that scenario, the energy the device receives only originates from that source, so you can confidently say that you are 100% powered by renewables.

For most people, we live on an interconnected grid, with many producers pumping electricity in and many consumers taking electricity out. This means the electrons coming into your device are a mixture of all the electrons going into the grid. For example, suppose the grid only has 5% of wind supply. You are getting 5% of wind-generated electrons and 95% fossil fuel-generated electrons.

You can’t track individual electrons. Once the electrons from a wind farm are on a grid, they all mix with the electrons from a fossil fuel plant. So there is no way for a consumer to insist the electrons that it uses only come from renewable sources.

Renewable Energy Certificates (REC)

To solve this problem, a renewable plant sells two things. The first is its electricity, which it sells into a grid. The second is a REC, a Renewable Energy Certificates. 1 REC equals 1 kWh of energy.

If you want to be 100% matched by renewable energy and are on the grid, the solution is to buy enough RECs to cover the amount of electricity you consume. For instance, if you consume 100 kWh of electricity every day, then to be 100% matched by renewables, you buy 100 RECs.

When organizations set 100% renewable targets purchasing RECs on the market is the solution they often employ to meet their commitments.

PPAs

You might also hear the term PPA used alongside RECs. A PPA is a Power Purchase Agreement, which is another way to purchase RECs. If you estimate you need 500 MWh of electricity per year for a particular data center, you might sign a PPA to purchase 500 MWh per year from a renewable plant. You would then get all the RECs associated with this power plant.

PPAs are typically very long-term contracts. A renewable plant can find financing with one of these agreements since it already has had a buyer for its electricity for many years.

PPAs encourage something called additionality. Purchasing a PPA drives the creation of new renewable plants. PPAs are a solution that gets us towards a future where everyone has access to 100% renewable energy.

24/7 Hourly Matching

When it comes to 100% renewable claims, the critical question is, what is the granularity of matching? Do you sum up and net off yearly, monthly, weekly, daily, or hourly? That question is essential because to truly transition to renewable energy, we need 100% of the power to come from low-carbon energy sources like renewables 100% of the time. This fine granular matching is often called 24/7 hourly matching.

24/7 hourly matching is one of the many strategies we need to employ to help accelerate the transition to a 100% renewable-powered grid. For example, Google and Microsoft have both committed to 24/7 hourly matching by 2030.

Daily vs hourly matching

Imagine an organization has a demand curve like this, each blue square represents 1kWh:

They have purchased RECs from a wind farm that generated electricity with a curve, so each green square represents 1 REC. Matching by day means the organization consumed 18 kWh and bought 18 RECs. As a result, they netted off to zero. So they can say they are 100% matched by renewable energy daily.

However, if we looked at it in hourly buckets (each square here is 2 hrs in length), then it seems a bit different:

Diagram illustrating impact of hourly matching

The total amount of energy consumed is still 18kWh. However, there are only a few hours in the day where we are 100% matched by renewable energy for that hour. So for some hours, we have way more renewable energy than we need. Conversely, we have way less renewable energy than we require for most hours.

In the above example, they are 100% matched by renewable energy on an hourly basis for only 6 hrs of the day.

Carbon-free energy

The number we use to describe how successful we are at 24/7 hourly matching is the carbon-free energy percentage.

Carbon-free energy is defined as the average percentage of carbon-free energy consumed in a particular location on an hourly basis.

So for the previous example, if measured using daily matching, we are 100% matched with renewable energy. However, we are only 33.1% matched if measured using hourly matching. The CFE percentage is, therefore, 33.1%.

Carbon Awareness as part of a 24/7 Hourly Matching Strategy

Carbon aware computing involves responding to electrical carbon intensity signals and changing the behavior of software, so it emits less carbon. Carbon awareness also helps an organization meet their 24/7 hourly matching target and increase its CFE percentage.

One example of a behavior change is shifting compute to a time when more renewable energy is available. For example, delaying the start of a training run of a machine learning model, or even delaying charging of a laptop, to when the carbon intensity of electricity is lower, and the supply of renewable energy is higher.

Temporal shifting along with matching strategy

Key Points

There are a number of methodologies commonly applied to help in the overall fight against climate change. These fall into the general categories of carbon elimination (also known as ‘abatement’), carbon avoidance (a.k.a. ‘compensating’), or carbon removal (a.k.a. ‘neutralising’).
Abatement includes increasing energy efficiency to eliminate some of the emissions associated with energy generation. Abatement is the most effective way to fight climate change although complete carbon elimination is not possible.
Compensating includes the adoption of renewable energy sources, sustainable living practices, recycling, planting trees etc.
Neutralisations refer to the removal and permanent storage of atmospheric carbon to counterbalance the effect of releasing CO2 into the atmosphere. Neutralisations tend to remove the carbon from the atmosphere in the short and medium-term.
An organisation can call itself Carbon Neutral when its total emissions are matched by the total of its emissions offsets through carbon reduction projects
Net zero aims to eliminate emissions and only offset the residual emissions that you cannot eliminate to reach the 1.5°C target set by the Paris Climate Agreement.
When organisations set a target of 100% renewable power, they can either be “matched by” vs. “powered by” renewables, where “powered by” means the energy the device receives only originates from renewable sources. This can be achieved by purchasing RECs as part of a PPA.
24/7 hourly matching is one of the many strategies we need to employ to help accelerate the transition to a 100% renewable-powered grid.