Welcome to our series on understanding carbon markets and carbon credits. In these posts, we’ll break down complex topics to help you gain a clearer view of (1) how carbon markets work, (2) the different types of carbon credits,(3) what makes a high-quality carbon credit - and why these tools matter for climate action. Let’s have a closer look at the different types of carbon credits - reductions and removals!

One carbon credit represents one metric tonne of CO₂e removed or reduced from Earth's atmosphere. The terms “reduction” and “removal” indicate the type of climate benefit achieved by the project: Does the project prevent emissions that would otherwise occur, like switching from coal to renewables, or does it actively extract CO₂ out of the atmosphere - for example with trees or large technological machines?

1 carbon credit = 1 tonne of CO₂e removed or reduced from Earth's atmosphere

To put things into perspective, 1 tonne CO ₂ is equivalent to approximately 5050 km in a petrol car (a round trip from Oslo to Rome), 250 hamburgers, 3846 bananas or 12 phones. The average Norwegian emits around 7-8 tonnes of CO₂ every year, the same size as over 1.5 Olympic-sized swimming pool, or 300-350 kg beef. Our forests are already absorbing a lot of that CO₂ through natural processes, but there is still way too much CO₂ in the atmosphere - which is where carbon projects come into play.

Reduction projects

Reduction activities are focused on avoiding or lowering future emissions, by preventing the release of emissions that would have otherwise been released.

These projects work by quantifying emissions reduced against a hypothetical future emissions baseline, or a “counterfactual” scenario — essentially, the emissions that would have occurred if the project weren’t implemented.

Common carbon reduction projects include initiatives that increase energy efficiency, replace fossil fuels with renewable energy sources, or prevent the degradation or loss of natural carbon sinks like forests.

Reduction projects play a key role in the short to medium term, helping to preserve carbon stored in vulnerable ecosystems and speeding up the transition to a low-carbon society. In fact, most credits in the voluntary carbon market (VCM) are tied to emission reduction activities. In 2023, a striking 82% of the projects on the VCM focused on reductions, with only 10% dedicated to removals and 7% offering a mix.

*Common carbon reduction projects: wind, clean cookstoves, fuel switching and avoided deforestation*

Removal projects

Removal activities, often referred to as Carbon Dioxide Removal (CDR) projects, are focused on actively sequestering or removing CO₂ from the atmosphere and storing it. These activities lower the atmospheric concentration of CO₂, and are therefore not dependent on hypothetical emission scenarios. Removal projects can have either temporary or permanent impacts, meaning that the duration of carbon storage varies significantly depending on the approach. For instance, tree planting stores carbon for decades to centuries, while some novel, technological solutions can store carbon in geological formations for thousands of years.

Removal projects include mainly two types, conventional nature-based solutions, such as afforestation, reforestation and revegetation (ARR), or novel engineered solutions, like Direct Air Carbon Capture and Storage (DACCS), Bioenergy with carbon capture and storage (BECCS), enhanced rock weathering or biochar production.

While novel, engineered CDR solutions currently make up a tiny fraction (0.1%) of the total carbon removals, their potential to scale is steadily growing with advancing technology and investment. The remaining 99.9% of carbon removals stem from conventional nature-based methods, and is expected to continue to play an important role.

Carbon removal solutions: Direct Air Carbon Capture and Storage, Bioenergy with Carbon Capture and Storage, Biochar and Afforestation, Reforestation, Regvegetation (ARR).

Mixed projects

Mixed activities lead to both removal and reduction outcomes, which allows for both types of credits to be issued. Mixed outcomes are especially common in nature-based solutions such as improved forest management and sustainable agriculture.

Improved Forest Management (IFM) is an example that both reduces emissions by minimizing forest disturbances, and enhances carbon uptake by allowing the forest to mature and sequester more CO₂.

Noora partners with professional forest owners to implement Improved Forest Management projects that enhance carbon uptake and reduce emissions. If you are a professional forest owner in Europe curious to see if your forest is suitable for carbon projects, sign up here to assess the carbon income potential in your forest by extending the rotation age.

Noora partners with professional forest owners to implement Improved Forest Management projects that enhance carbon uptake and reduce emissions.

Improved Forest Management includes extension of rotation age, enrichment planting, thinning, or reducing timber harvest levels

What carbon project type is best?

In addition to drastic emissions reductions, we need to remove carbon from the atmosphere in order to meet the 1.5°C target. However, many climate scientists now emphasize the 2°C target, acknowledging that we are far from being on track to limit global warming to 1.5°C. Even if we manage to reduce every possible emission, we will still need to remove around 9 gigatonnes (Gt) of CO₂ from the atmosphere annually by 2050 to achieve our climate goals.

To illustrate the immense scale of the global challenge, we can compare it to Norway's emissions in 2023, which totaled 46.7 million tonnes (Mt) of CO₂. Meeting the global removal target of 9 gigatonnes (Gt) annually would be equivalent to removing 193 "Norways" worth of emissions from the atmosphere every single year.

Source: The State of Carbon Dioxide Removal 2. edition

Removal projects reduce the amount of carbon dioxide in the atmosphere, and their effect is more clearly quantifiable and traceable. Therefore, it is a common opinion that removal type projects are “better” than reduction projects, but this does not necessarily mean that reduction type projects are of low environmental integrity.

Reduction and mixed projects play an important role in the global context of combating climate change in this decade and beyond. They provide near-term climate action, often with several co-benefits for biodiversity or local communities - at a reasonable cost. Removals, on the other hand, do not exist anywhere near the scale we need now, and on average it costs a lot more to remove a tonne of CO₂ than to avoid its emission in the first place.

The Oxford Principles for Net Zero Aligned Carbon Offsetting is a widely recognized standard for the use of climate credits in line with net zero ambitions.

The principles were devised through collaboration with experts across the University of Oxford. They incorporate expertise from the Blavatnik School of Government, Environmental Change Institute, Nature-based Solutions Initiative, Oxford Martin School, Oxford Sustainable Finance Group, Saïd Business School, School of Geography and the Environment, and the Smith School of Enterprise and the Environment.

The Oxford Principles state that businesses should increase the proportion of carbon removal in their carbon credit portfolio over time, aiming to reach 100% by 2050. These principles also highlight the importance of protecting and amplifying a wide range of ecosystems. This approach not only helps reduce emissions and remove carbon, but also provides valuable social and environmental benefits, such as strengthening nature’s ability to support society in adapting to the impacts of climate change.

Our ecosystems provide a wide range of social and environmental benefits, such as strengthening nature’s ability to support society in adapting to the impacts of climate change.

In the global effort to limit climate change, both reduction, removal and mixed projects play important roles. Reduction projects offer affordable, immediate action with added benefits for biodiversity and local communities, while removals represent a much needed, long-term solution. However, removals are not yet scalable to the levels needed and often come at a higher cost.

At Noora, we acknowledge the global need for nature-based and technological solutions working in tandem to reach our shared, global net zero goal. We can’t afford to lean solely on technological carbon removal, we need climate action now, and in the foreseeable future. And we need to act on nature’s terms, protecting and amplifying our natural resources along the way. Therefore, we prioritize nature-based solutions, while developing state-of-the-art approaches for quantifying, monitoring and reporting on additional climate impacts.

We need to act on nature’s terms, protecting and amplifying our natural resources along the way.

Noora empowers businesses to take meaningful climate action through certified carbon credits from Norwegian forests. By partnering with local forest owners and using advanced monitoring technology, we help protect and enhance nature’s role in removing CO₂ from the atmosphere - while contributing to local environmental responsibility and our shared, global climate goals.

Are you a forest owner interested in generating carbon income, or a business looking to make a measurable impact on climate? Get in touch with us to learn more!

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Carbon credits: reductions vs removals