Explainer
Carbon neutral and net zero are often used as if they mean the same thing. They do not. Here is the difference, the standards behind each claim and how to avoid a green claim you cannot back up.
By Christopher Fagan, Managing Partner, PEF Consulting Partners
Carbon neutral usually means your measured emissions for a period are balanced by carbon credits, whether from reductions or removals. Net zero means you have cut emissions as far as possible, typically by 90% or more under the SBTi definition, and neutralised only the small residual with permanent removals. Carbon neutral can be claimed for a period today; net zero is a long term destination.
| Carbon neutral | Net zero | |
|---|---|---|
| Main standard | ISO 14068-1:2023, which replaced PAS 2060 | The SBTi Corporate Net Zero Standard |
| Role of reductions | Expected; under ISO 14068-1 a first claim cannot rest on offsets alone | Required: deep cuts across scopes 1, 2 and 3 |
| Role of credits | Can balance the remaining footprint | Only permanent removals for residual emissions |
| Timescale | A claim for a defined period | A target year, often 2050 or earlier |
| Scopes | The boundary defined in the claim | Scopes 1, 2 and 3 |
BSI withdrew PAS 2060 at the end of 2025, and verifications against it had to be completed by 31 December 2025. Carbon neutrality claims now need to follow ISO 14068-1:2023, which puts more weight on reductions and does not allow a first claim to rely on offsetting alone.
The Competition and Markets Authority’s Green Claims Code says businesses must be clear whether, and how far, a claim relies on offsetting, name the scheme used and rely on verifiable standards. Since April 2025 the CMA can fine businesses up to 10% of global turnover for breaches of consumer law, which includes misleading environmental claims.
The UK has a legal target of net zero greenhouse gas emissions by 2050, set in 2019 by amending the Climate Change Act 2008.
Set a net zero target with interim milestones and a credible reduction plan. Use carbon credits carefully, as a supplement to reductions rather than a substitute, and describe exactly what they do. If you make a carbon neutral claim, make sure it meets ISO 14068-1 and the CMA code.
Related reading: the SBTi explained, scope 1, 2 and 3 emissions explained, transition plans you can deliver, the carbon reduction plan template.
No. Carbon neutral balances a period’s emissions with credits. Net zero means cutting emissions by around 90% or more and neutralising only the residual with permanent removals.
ISO 14068-1:2023. BSI withdrew PAS 2060 at the end of 2025.
No. Under the SBTi standard, net zero requires deep cuts across the value chain; removals can only neutralise the small residual that cannot be cut.
A state in which the greenhouse gas emissions attributed to a company or product for a period are balanced by reductions and removals, demonstrated against a standard such as ISO 14068-1.
If you are about to make a carbon claim in marketing or a tender, check it against the standard and the CMA code first. We can help you word it so it stands up.