How Long Do Carbon Credits Last: Understanding the Lifespan of Offsets

Companies purchase carbon credits to offset the greenhouse gas emissions they create via daily operations. Common carbon offset projects include reforestation, afforestation, blue carbon, renewable energy, and carbon dioxide removal projects.

If you've been involved with the carbon market for a while, you know this. But did you also know that carbon credits have lifespans? Or that the best carbon credits not only avoid or sequester carbon now, but keep it out of the environment for hundreds, if not thousands of years? It's true.

In this article, we answer the question, "How long do carbon credits last?" That way you can buy credits that better fit your organization's financial and climate change goals.

The Myth of Permanent Carbon Removal

You've purchased a carbon credit. The tonne of CO2 it represents is now gone forever, right?

Actually, no. The act of buying carbon credits, while beneficial, doesn't eliminate the carbon emission. In fact, most carbon projects only store carbon temporarily, which has consequences.

Here's the truth: carbon removal credits, sold via the compliance and voluntary carbon market, represent a temporary removal of global greenhouse gas emissions from the atmosphere. The overall permanence of CDR projects is determined by how long the removal is expected to last.

Buyers increasingly scrutinize permanence before investing in carbon credits. Why wouldn't they? Doing so helps them invest in better projects, avoid carbon removal reversals that damage their reputations, and make a positive impact on the global warming crisis.

What Durability Really Means in Carbon Markets

The term "durability" has become popular in recent years. It has two meanings: One, the expected duration of carbon storage; and two, the risk of storage reversal before expectation.

If you're thinking, "Those definitions sound a lot like permanence," you're right. The only difference is the term "permanence" refers to the risk of storage reversal in general. Purists also believe durability is a more accurate explanation, as it implies a range of outcomes. Technically speaking, something is either permanent or it's not.

Carbon projects get durability ratings. Some are short and capture carbon for 10-100 years. Others are medium and capture carbon for 100-1,000 years. Still others are long and capture carbon for 1,000+ years. The longer the capture period, the higher the durability of offsets 

Generally speaking, technology-based solutions are more durable than nature based solutions. Why? Because technology-based solutions are less prone to reversal. (A reversal is when GHG emissions that were previously captured and stored are released back into the atmosphere.)

Think about it: If a forestry project experiences a reversal, because of a wildfire or pest infestation, for example, both past and future benefits are lost. The sequestered carbon is released back into the atmosphere and the trees won't be able to capture more.

If a piece of mineralization technology shuts down, carbon is NOT released back into the atmosphere, though future benefits won't materialize. These facts make the mineralization tech more durable than the forestry project, which should be considered when building a carbon offset program.

The Case for Durable Carbon Dioxide Removal (CDR)

As we've seen, durability is an important factor. 

While nature-based solutions like afforestation, reforestation, and revegetation (ARR,) soil carbon sequestration, and blue carbon projects are valuable, they offer shorter durability.

Many tech-based solutions, on the other hand, offer high durability CDR. Examples include direct air capture (DAC,) bioenergy with carbon capture storage (BECCS,) and enhanced rock weathering.

Does that mean you should only invest in highly durable, technology solutions to reduce GHG emissions? Not necessarily. There are two approaches to this topic:

• Like-for-Like: The like-for-like principle encourages companies to invest in carbon projects that match the durability of the carbon they produce via daily operations. So, if a company serves steak for lunch, they could invest in a reforestation project. But if they burn fossil fuels to ship products across the world, they should invest in a more durable DAC program. This is because cow methane (a byproduct of a steak lunch) only stays in the atmosphere for about 12 years, so a reforestation project offers comparable durability. Fossil fuels, on the other hand, stay in the atmosphere for much longer, so more durable climate projects are required to offset the company's emissions.
• Gradual Transition: The gradual transition strategy encourages companies to invest in removals at the beginning of their climate journeys, as they're more affordable and easy to obtain. Then, as said companies get closer to their net zero goals, they ramp up efforts and invest in more durable CDR methods.

In our opinion, the gradual transition strategy is best for most organizations. Why? Because the like-for-like principle is often difficult to implement. As such, it can be a burden rather than an incentive, and discourage climate-based actions.

At the end of the day, all emission reduction projects are important. Just do your best to invest in durable carbon dioxide removal (CDR) initiatives when possible. This will give your company the chance to support different project developers, impact local communities in various ways, and promote climate change.

Why Durability Drives Value and Risk in Carbon Projects

It's important to note that durable carbon removal projects are often risky. While the impact they generate is less likely to be reversed, they cost more to build and maintain.

You should factor this into your climate change strategy.

Some companies work with carbon project developers to plant new forests and manage soil in sustainable ways. It's much cheaper. And if the business doesn't produce long-lasting carbon emissions, this might be all it needs to offset its greenhouse gases and support global climate change.

Other companies, like Boeing, pay a premium to invest in technology-based solutions that promise long-term removals. This makes sense. Boeing is a massive company that burns a lot of fossil fuels. They need to purchase a high volume of durable credits to reach carbon neutrality.

Whichever strategy you implement, remember there is a financial and reputational risk to short-term offsets. If the project fails, it won't generate credits, which could make your company non-compliant. It also won't reach its climate targets, which could upset customers, who expect your brand to offset its own emissions, at the very least.

Sylvera’s Role in Durability Assessment

You're probably thinking, "Durable carbon credits sound great! How do I invest in them?" Simple: Use the Sylvera platform, which has the tools you need to assess carbon projects.

• Project Assessments: We evaluate projects for durability based on natural and people-related risks. Is the project prone to natural disasters, like wildfires, pests, or floods? Do the project developers have a history of successful projects? Is the local government and/or people supportive of the project, or will they fight its implementation? Equally important, is the project a nature-based solution (NBS) or a durable carbon dioxide removal (DCDR) solution?
• Unbiased Ratings: Our platform offers Pre-Issuance and final project Ratings to help determine which projects to invest in. Is the project built with integrity? Can we foresee problems in the project design document? And is the project developer willing to fix them? How much risk is there to buyers and/or investors? Is said risk worth the potential benefit of purchasing credits? The best part about our ratings is that they're unbiased. We aren't involved with the projects we evaluate, so we can give an honest opinion.
• Continual Monitoring: What happens after you purchase carbon credits to reduce emissions? You probably want to monitor your investments to make sure they pan out. The Sylvera platform offers a complete Monitoring suite. Ensure ongoing quality, learn about new regulations in the area, and stay up-to-date with industry news. Doing so will help you evaluate durability on a continual basis, and fix problems as they arise.

Durability is an important factor in the world of carbon removal. Use Sylvera to make sure the credits you purchase for your company have a lasting impact on climate change.

Credits Don’t Last Forever—But You Can Choose Better Ones

Carbon credits only sequester carbon for a limited amount of time. The best carbon projects offer low reversal risk, which is why we suggest investing in them when possible.

Simply ask yourself, "How long will this project store carbon emissions?" Then use this data to inform your strategy to remove and/or offset your company's greenhouse gas production.

Sylvera can help with every stage of your journey, from identifying which carbon credits to buy to facilitating the purchase and monitoring your investment. Specific to this article, Sylvera has the tools to validate credit durability before you buy them, which is valuable. Book a demo of Sylvera today to see how we can help you pinpoint durable credits and a whole lot more!