Carbon Offset Project Types, Part 1: Renewable Energy and Industrial Offset Projects

Carbon Offset Project Types, Part 1: Renewable Energy and Industrial Offset Projects

In theory, carbon offsets can be generated by anything that reduces or eliminates greenhouse gas emissions (we’re going to call them GHGs for short). In general, most offsets come from the following sources:

  • Renewable energy
  • Avoided and/or destroyed industrial emissions, especially potent gasses like methane and chlorofluorocarbons (CFCs)
  • Reforestation and forest conservation projects
  • Regenerative agriculture 

Offsets can be generated from other projects, too, like community development initiatives that remove or reduce emissions.

We know you want to use your dollars to make the most impact, and we have good news for you: In most cases, carbon offset projects provide social and environmental benefits beyond just removing GHG emissions. Understanding offset project types and how they work will help you select the best carbon offsets.

So let’s talk about the different carbon offset types!

Avoided vs. Removed Emissions

But first, a quick word on avoided and removed emissions.

When talking about offsets, you’ll often see the terms “avoided” and “removed” thrown around. So what are they, and how do they affect carbon offsets?

Avoided emissions are harmful GHGs that would have been released into the atmosphere, but thanks to an offset project, weren’t. Avoided emissions can either remove all or some of the emissions associated with a certain activity. For example, you decide to rent an electric vehicle for a road trip rather than drive your ancient gas guzzling van, Ol’ Blue. There are still some emissions resulting from charging the EV, but not nearly as many had you hit the road in Ol’ Blue. Good job! You just avoided emissions.

Removed emissions are GHGs that were already in the atmosphere but were pulled down and stored permanently. For example, when you plant a tree, it absorbs carbon dioxide and stores it in its wood, roots, and surrounding soil. Those emissions are tucked away safely in the tree and ground, so the emissions are considered removed from the atmosphere.

So which is better: Avoided or removed emissions? As Benjamin Franklin famously said, “A penny saved is a penny earned,” so from a carbon offset perspective, avoided emissions count just the same as emissions removed.

With avoided and removed emissions cleared up, let’s dive into the different types of carbon offset projects.

Renewable energy

Project Drawdown estimates that implementing various renewable energy systems will reduce/sequester 158-389 gigatons of CO2 by 2050. Renewable energy is one of the most important solutions in the avoided emissions category. Energy production accounts for two thirds of global GHG emissions, and replacing dirty fossil fuels with clean energy can result in a 90 percent emissions reduction by 2050. From a climate perspective, supplanting fossil fuels with renewable energy is the most crucial climate solution out there. And there are benefits beyond emissions reductions:

  • Cleaner air
  • Job creation
  • Increased real estate value
  • Reduction in destructive fossil-based land use practices (mines, oil drilling, pipelines, etc)

Every watt of clean, renewable energy offsets a watt of fossil-generated electricity, resulting in meaningful reductions in atmosphere-damaging GHGs. Renewable energy offsets can be generated from several sources: 

  • Wind
  • Solar
  • Geothermal
  • Hydro
  • Biomass

Examples of renewable energy offset projects

Crow Lake Wind Farm

The Crow Lake Wind Farm in White Lake, South Dakota is the largest cooperatively-owned wind project in the U.S. The 108 turbine wind farm not only allows carbon offsetting, but features a groundbreaking community investment project that educates and trains future wind technicians.

Crow Lake Wind Farm offsets 432,128 metric tons of CO2 annually. That’s the equivalent of taking 94,000 cars off the road, each year.

Dora 1 and 2 Geothermal Plants

The Dora 1 and 2 geothermal plants help Turkey offset fossil-based electricity generation with clean energy while producing valuable offsets for the international market. The plants pump heat from beneath the earth’s surface to generate clean electricity, creating enough clean renewable electricity to offset 90,000 metric tons of CO2 each year.

In addition to clean energy, the project produces myriad benefits to the community, including parks, educational opportunities, and infrastructure upgrades.

Industrial emissions

Industry accounts for nearly a quarter of U.S. greenhouse gas emissions. Industry burns a lot of fuel directly (called scope 1 emissions, we’ll write more on that later) and gobbles up tons of electricity to power factories, mills, plants, and more.

Industrial emissions are particularly nasty. Aside from producing lots of carbon, industry produces other gasses with way more global warming potential, like methane (around 30 times more potent thanCO2) and nitrous oxide (almost 300 times more potent). HFCs can have upwards of tens of thousands of times more warming potential thanCO2.

Removing and avoiding these emissions goes a long way in cutting down CO2 equivalent emissions. And because these emissions come from single sources (say, a smokestack or landfill), they are easy to quantify and track, making industrial offsets easier to generate than nature based ones.

 Industrial emissions can come from the following sources:

  • Industrial exhausts. Scrubbers or emissions-reduction tech collects or avoids harmful gasses like CO2, N2O, and more.
  • Landfills. As organic material rots underground, potent methane is released into the atmosphere. This gas can be captured at the source and used as renewable natural gas to offset fossil fuels used for heating, industrial applications, and electricity generation.
  • Waste-to-energy (WTE). Industrial offsets can also be generated when waste is burned and converted into energy, keeping waste from entering a landfill and offsetting the burning of fossil fuels.
  • Waste energy recovery. There’s a lot of waste heat and gas produced in industrial processes. This waste can be collected and transferred back into usable energy to produce electricity, power industrial processes, and more.

Industrial emissions offset projects are usually in the avoided emissions category, and are usually generated when a waste gas like methane, HFCs, and N2O are captured and destroyed or their emission is avoided. The downside to industrial offsets is they don’t provide as many of the social and ecological benefits that other offsets do. Regardless, industrial offsets are an important tool in erasing the world’s carbon footprint.

Examples of industrial offset projects

Hyundai Steel Waste Energy Project

The Hyundai Steel Waste Energy Project in South Korea utilizes surplus waste gasses to generate electricity and steam. It generates enough electricity and steam to power the plant and feed the local electric grid, saving harmful emissions from entering the atmosphere and offsetting fossil fuels that would be burned for local electricity.

The Hyundai Steel Waste Energy Recovery Co-generation Project produces 400mw of energy, enough to power 260,000 homes annually. In all, the project avoids the equivalent of 1.78 million metric tons of CO2 each year, the weight of 300,000 elephants. Now that’s a big difference.

Corinth Abandoned Mine Methane Recovery Project

Natural gas veins are commonly exposed during mining, releasing the potent GHG methane into the atmosphere. The Corinth Abandoned Mine Methane Recovery Project diverts this gas from the atmosphere and into homes and businesses. 

Near Carbondale, IL, the natural gas from 14 abandoned coal mines is being collected and purified for use in natural gas markets. Once burned, natural gas creates CO2  which has way less warming potential than methane. Most abandoned mines continue to emit climate-damaging natural gas indefinitely, but thanks to the Corinth project, enough mining emissions are captured to offset 122,288 metric tons of CO2 annually.


In this article, we’ve covered renewable energy and industrial offset projects. The potential for carbon avoidance/sequestration in these two areas is huge, and quantifying emissions reductions in these categories is a treasure trove of carbon offset generation. Purchasing carbon offsets in these categories not only erases your carbon footprint, but helps advance a low/no emission future.

In our next article, we’ll dive into other forms of carbon offset projects that are helping to make the planet a cleaner, greener, more just place to live.

Offset your footprint with Neutral

It’s important for individuals and systems to do what they can to reduce emissions. What’s left, offset with Neutral. Your investment in Neutral’s quality offset projects helps scale third-party verified carbon removal and avoidance projects that will be essential in helping society move away from fossil fuels and remove the carbon we’ve emitted.

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