CO2balance appreciate that the carbon finance sector is complex and at times challenging to understand. Our team of experts are experienced in explaining the processes in a clear understandable manner, please contact the Head Office on +44 (0)1823 332233 to arrange an informal discussion about your potential project. In the meantime please take a look at the glossary.


Additionality is a key eligibility test for projects which dictates that projects are only eligible for carbon credits if the resulting emission reductions are "additional to those that otherwise would occur", and weren't going to happen anyway.


Related to fuel and energy. Biomass is combustible fuel composed of organic waste matter – i.e., recently dead biological material (as opposed to fossil fuel). It is often made from plants, wood or wood by-products, rice husks, or bagasse. Biomass generation refers to the use of biomass fuel for power generation.

Carbon footprint

The total emissions associated with the use of power, transport, food and other consumption for an individual, family or organisation, are added up to give one comparable measure (a carbon footprint) in units of carbon dioxide equivalent (CO2e).


When an individual, family or organisation has reduced its emissions of greenhouse gases from all its activities to nil they are considered "carbon zero" or “carbon neutral”. Emissions must be cut to a minimum and any necessary remaining emissions are then offset by emission reducing activities elsewhere.

Clean Development Mechanism (CDM)

A Kyoto Protocol initiative under which projects set up in developing countries to reduce greenhouse gas emissions generate tradable credits called CERs, the first step towards a global carbon market. These credits can be used by industrialised nations to offset carbon emissions at home and meet their Kyoto reduction targets. The projects include renewable energy generation, reforestation and clean fuels switching.

Certified Emission Reduction (CER)

Under Kyoto’s Clean Development Mechanism (CDM) CERs are credits generated for the reduction of emissions of greenhouse gases equal to one tonne of CO2-equivalent. They are designed to be used by industrialised countries to count toward their Kyoto targets but can also be used by EU companies and governments as offsets against their emissions under the EU Emissions Trading Scheme.

Carbon Reduction Commitment (CRC)

Announced in the 2007 Energy White Paper, the Carbon Reduction Commitment Scheme (CRC) (formerly the Energy Performance Commitment) will apply mandatory emissions trading to cut carbon emissions from large commercial and public sector organisations. Around 10% of the UK economy wide emissions will be covered and the scheme will provide incentives for organisations to save money through energy efficiency.

Greenhouse GasGreenhouse Intensity

The three most well referred to greenhouse gases are: carbon dioxide (CO2) - the biggest contributor to global warming, methane (CH4) – eg, from decomposing landfill and flatulent cattle, and nitrous oxide (N20) – eg, from vehicle exhaust fumes. There are also three other industrial gases that contribute to global warming: hydrofluorocarbons (HFCs) - used for refrigeration, perfluorocarbons (PFCs), produced in the making of semi-conductors, sulphur hexafluoride (SF6) - a by-product of aluminium manufacturing and the electronics industry.

Refers to the ratio of a nation’s greenhouse gas emissions to its GDP, or the volume of emissions per unit of economic output. A country’s greenhouse intensity may often be falling yet overall emissions are rising due to an expanding economy. Greenhouse intensity measures are also used at a company, plant or industry sector level.

Greenhouse Gas Protocol

Is the most widely used international accounting framework for government and business leaders to understand, quantify, and manage greenhouse gas emissions. The GHG Protocol, a decade-long partnership between the World Resources Institute (WRI) and the World Business Council for Sustainable Development (WBSCD), is working with businesses, governments, and environmental groups around the world to build a new generation of credible and effective programs for tackling climate change.

Global Warming Potential (GWP)

The GWP is a numerical measure referring to the potency of greenhouse gases, (ie, their ability to trap heat in the atmosphere). Each of the six greenhouse gases has vastly different potential to induce global warming. While carbon dioxide is by far the most abundant greenhouse gas, it is also the weakest in its ability to trap heat in the atmosphere. To compare the 'global warming potential' of the greenhouse gases, each is given a GWP measure relative to that of carbon dioxide which has a GWP of 1.

Intergovernmental Panel on Climate Change (IPCC)

An international scientific panel charged with informing the UNFCCC with the latest scientific evidence on climate change. With representatives from 130 nations it is the world's pre-eminent scientific advisory body on global warming.

ISO 14064 Standard

ISO 14064 is a standard comprising a set of GHG accounting and verification criteria. The standard defines international best practice in the management, reporting and verification of the greenhouse gas information and data. The standard provides a means by which consistency can be introduced into the complicated area of GHG verification.

Kyoto Protocol

This agreement, which came into force in 2005, commits developed nations collectively to cut their greenhouse gas emissions to 5.2 per cent of 1990 levels by 2012. By 2007, 175 countries had ratified the agreement, including most of the world's developed nations.

The Kyoto Protocol was struck in 1997 in Kyoto, Japan, when member nations of the United Nations Framework Convention on Climate Change (UNFCCC) agreed that developed countries must reduce their emissions of six greenhouse gases to meet the overall target, with specific targets varying from country to country.


Credits issued in return for a reduction of atmospheric carbon emissions through projects such as the provision renewable energy to replace fossil fuel energy, or reforesting cleared land to create a carbon sink. By paying for such emission reducing activities, individuals and organisations can use the resulting credits to offset their own emissions, either voluntarily or under the rules of most emissions trading schemes. One offset credit equates to an emission reduction of one tonne of CO2.

United Nations Framework Convention on Climate Change (UNFCCC)

Also referred to informally as the UN climate change convention. This is the international agreement for action on climate change and was drawn up in 1992. A framework was agreed for action aimed at stabilising atmospheric concentrations of greenhouse gases. The UNFCCC entered into force on March 1994 and currently has 189 signatory parties. The UNFCCC in turn agreed the Kyoto Protocol in 1997 to implement emission reductions in industrialised countries.

Verified Emission Reductions (VERs)

Tradable credits for greenhouse emission reduction activities generated to meet voluntary demand for carbon credits by organisations and individuals wanting to offset their own emissions.

World Resources Institute

An organisation that brings together four influential forces to accelerate change in business practice: corporations, entrepreneurs, investors, and business schools. The Greenhouse Gas Protocol Initiative is managed by WRI’s Sustainable Enterprise Program.

World Business Council for Sustainable Development

A coalition of 170 international companies united by a shared commitment to sustainable development through economic growth, ecological balance and social progress.

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