Can I use carbon offsets in my Carbon Reduction Plan?

Not to reduce the figures. A PPN 006 plan reports your emissions as measured, and the reduction targets and projects should be real cuts. You can mention offsets you buy in a separate note, but evaluators look for reductions against your baseline.

What is the difference between an offset and a removal?

An avoidance or reduction credit pays for emissions to be cut somewhere else, such as a project replacing cooking stoves. A removal credit pays for CO2 to be taken out of the atmosphere and stored, for example in new woodland or by direct air capture. Net zero standards only accept removals, and only for the small amount of emissions left after deep cuts.

Can I say my business is carbon neutral if I offset?

Only with care. The CMA's Green Claims Code says that where a claim relies on offsetting, you should say so and give information about the scheme. Since April 2025 the CMA can fine businesses up to 10% of global turnover for misleading consumers. Many businesses now avoid the phrase and describe exactly what they did instead.

Are UK woodland carbon units better than overseas credits?

They are removals, verified under a UK government-backed code, which many buyers prefer. But only verified Woodland Carbon Units can be used against current emissions. Pending Issuance Units are a promise of future removals and can't support offsetting or carbon neutral claims until verified.

How much do carbon offsets cost?

Prices vary enormously by project type, standard, location and vintage, from a few pounds a tonne for some avoidance credits to hundreds of pounds a tonne for engineered removals. Price is not a reliable guide to quality, so check the standard and project documents.

Is PAS 2060 still the standard for carbon neutrality?

No. PAS 2060 has been superseded by ISO 14068-1:2023, the international standard for carbon neutrality, which puts more weight on reducing emissions before compensating for them. BSI no longer certifies against PAS 2060.

Carbon offsetting for UK businesses: what counts and what you can claim

A carbon offset is a credit representing one tonne of CO2e reduced, avoided or removed outside your business. Offsets don't reduce your reported footprint: a PPN 006 Carbon Reduction Plan and an SECR report show your actual emissions, and net zero standards only allow permanent removals for the small residual left after deep cuts. If you make claims based on offsets, the CMA's Green Claims Code expects you to say so clearly.

Updated 3 October 2026 by the Carbon Recycling team. Figures use the official UK government conversion factors and are checked against the current gov.uk guidance.

What an offset is

A carbon credit is a certificate that one tonne of carbon dioxide equivalent has been kept out of, or taken out of, the atmosphere by a project somewhere else. When you buy and retire a credit to compensate for your own emissions, it is usually called an offset. Credits are issued under standards that set the rules for measuring and verifying projects, and recorded on registries so each one is only used once.

Type	Examples	What it does
Avoidance or reduction	Renewable energy, efficient cookstoves, landfill gas capture, avoided deforestation	Prevents emissions that would otherwise have happened. Nothing is taken out of the atmosphere
Nature-based removal	New woodland, peatland restoration (which also cuts emissions), soil carbon	Takes CO2 out of the air and stores it in plants and soils, with some risk of reversal
Engineered removal	Direct air capture with storage, biochar, enhanced rock weathering	Takes CO2 out and stores it for a long time, at a much higher price per tonne

Why offsets don't change your footprint

Under the GHG Protocol, your inventory is your gross emissions. Credits are reported separately, if at all. That is why offsets don't belong in the figures of a PPN 006 Carbon Reduction Plan or an SECR report. A Carbon Reduction Plan's reduction targets and projects should be cuts you make in your own operations and value chain; you can describe any offsetting in a separate note, clearly labelled. Our free template leaves space for that.

The same applies to net zero. Under the SBTi's Corporate Net-Zero Standard, credits don't count towards your reduction targets. At net zero, only permanent removals can neutralise the residual emissions you cannot cut, which for most companies is no more than about a tenth of their base year emissions. Buying credits on the way there is allowed, and encouraged as extra climate action, but it is separate from your targets. See our net zero guide and science-based targets guide.

How to judge quality

The UK government has backed the Integrity Council for the Voluntary Carbon Market's Core Carbon Principles as a minimum quality threshold, and the VCMI Claims Code of Practice as guidance on how companies use credits in claims. The questions that matter:

Additionality. Would the project have happened anyway? If yes, the credit represents no extra climate benefit.
Permanence. How long is the carbon stored, and what happens if a forest burns? Look for a buffer pool or insurance.
Measurement and verification. Is the tonnage independently verified against a recognised methodology, rather than estimated by the seller?
No double counting. Is the credit on a public registry and retired in your name?
Leakage and harm. Does the project just push emissions elsewhere, or harm local communities or nature?

In the UK, the Woodland Carbon Code, backed by the UK's forestry authorities, and the UK Peatland Code are the main standards for domestic projects. Under the Woodland Carbon Code only verified Woodland Carbon Units can be used against your emissions. Pending Issuance Units are a promise of future sequestration: you can say you bought them, but not that they offset or balance your emissions, until they are verified and converted.

Green claims and the CMA

The Competition and Markets Authority's Green Claims Code sets six principles for environmental claims. Claims must be truthful and accurate; clear and unambiguous; must not omit or hide important information; must make only fair and meaningful comparisons; must consider the full life cycle; and must be substantiated. On offsetting specifically, the CMA says businesses should give information about any scheme they use, otherwise people may be misled into thinking a product or business produces few emissions when it does not.

Since April 2025, under the Digital Markets, Competition and Consumers Act 2024, the CMA can decide for itself that consumer law has been broken and fine a business up to 10% of its global turnover, without going to court. The Green Claims Code covers claims to consumers; claims made to other businesses are covered by separate rules on misleading business-to-business marketing, and advertising by the Advertising Standards Authority's codes. The safe approach is the same either way:

Lead with what you have measured and cut, with figures and dates.
If you buy credits, say how many tonnes, of what type, under which standard, and that they are in addition to your reductions.
Avoid "carbon neutral", "net zero" or "climate positive" for your business or products unless you can substantiate exactly what they mean, including any reliance on offsets.
Don't call a target "science-based" unless the SBTi has validated it.

What is changing

The government consulted in 2025 on raising integrity in voluntary carbon and nature markets, based on six principles: use credits in addition to ambitious action in your value chain; use high-integrity credits; measure and disclose planned use of credits in sustainability reporting; plan ahead; make accurate green claims using appropriate terminology; and co-operate to grow high-integrity markets. It published a summary of responses in March 2026 and said a formal government response would follow. Separately, BSI's PAS 2060 for carbon neutrality has been superseded by the international standard ISO 14068-1:2023.

A sensible approach for an SME

Measure your footprint first. Our step-by-step guide and kWh to CO2e calculator get you started.
Set reduction targets and act on your biggest sources.
If you want to go further, fund high-quality projects with a clear label, such as "climate contribution", rather than a neutrality claim.
Report credits separately from your emissions, every year.

How Carbon Recycling helps

Carbon Recycling reports your gross Scope 1, 2 and 3 emissions, which is what PPN 006, SECR and net zero standards look at. Your Carbon Reduction Plan shows reductions against your baseline, so the claims you make are backed by figures with a traceable government factor behind each one.