Pfizer revealed its Net Zero path and plans to reduce GHG emissions by 95% from 2019 levels by 2040.

Pfizer is one of the world’s biggest biopharmaceutical companies and also aims to cut its value chain emissions by 90% by 2040.

This commitment is part of Pfizer’s Environmental, Social and Governance (ESG) priorities.

Other pharma companies that have made net zero pledges include Biogen, Bayer, AstraZeneca, Sanofi, Novartis, and J&J.

Pfizer also announced that it had signed a voluntary US Department of Health & Human Services pledge to cut emissions and ramp up climate action.

Pfizer Net Zero Commitment

Pfizer’s net zero pledge builds on more than 20 years of environmental sustainability. For the firm’s CEO and Chairman Albert Bourla,

“With urgency of action, we believe that our commitment to speed up decarbonization of our value chain and achieve the Net-Zero standard… (which aligns with Pfizer’s purpose and ESG priorities)… can help drive positive change and build a healthier, more sustainable world.”

The pharma firm has been delivering emissions reduction goals since 2000. In fact, it was the first in the sector to set up STBi-approved emissions reduction targets.

In 2020, Pfizer declared to become carbon neutral across internal operations by 2030. It also seeks to reduce Scope 1 and 2 GHG emissions by 46% by 2030 from its 2019 baseline.

The image shows the company’s 2019 GHG emissions baseline.

So far, Pfizer’s Scope 1 and 2 emissions for 2021 were 7% lower than its 2019 levels. Most of the reductions are due to COVID-19 responses such as a decrease in field sales operations.

In cutting emissions from its operations, the pharma company plans to achieve that by reducing its reliance on fossil fuels. It also aims to invest in a fleet of hybrid and electric vehicles.

To help reach its net zero pledge Pfizer plans to:

Design greener facilities or renovation projects with reduced environmental impact
Replace equipment at end-of-life with energy-efficient alternatives
Invest in no/low carbon technologies that enable sourcing energy from renewables
Undertake process enhancements within product manufacturing to reduce the resources needed

Pfizer further intends to purchase 80% renewable electricity by 2025, and 100% by 2030.

In 2021, it was able to use 6.5% renewable power. It also entered into a virtual power purchase agreement (PPA) with Vesper Energy for 310 MWh of renewable energy starting in 2023. 

Ramping up climate action across supply chain

Pfizer’s scope 3 (value chain) GHG emissions is over 4x greater than its direct operations. The procurement of goods and services (66%) for producing medicines and vaccines takes the most of its scope 3 emissions.

Other activities contributing to value chain emissions are shown in the graph below.

To reduce scope 3 emissions, Pfizer is urging its suppliers to also set their own STBi aligned reduction targets.

In 2021, Pfizer was recognized as a CDP Supplier Engagement Leader four times in a row for its work to measure and reduce environmental risks in its supply chain.

The company further seeks to tackle residual emissions with verified carbon credits. These are through investing in projects that avoid or reduce GHG emissions.

But the firm didn’t determine yet how much credits it will buy and where.

Other key environmental initiatives

Sustainable Medicines. Pfizer conducts life cycle assessments (LCAs) across its small molecule, large molecule, and device portfolios. It will help guide the company which areas to improve to reduce footprint of medicines.

Waste. Pfizer uses a metric that encourages the hierarchy of control of handling waste: reduce, reuse, recycle, disposal. Each site has targets to improve the circularity of its waste.

Also, its manufacturing sites look for opportunities to reduce, reuse and recycle other materials.

Water Stewardship. Responsibly managing wastewater discharges from internal sites and assessing discharges from supplier sites. Achieved 15% reduction in water withdrawal in 2021 compared to 2020.

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The African nation of Gabon is planning to make the largest carbon credits issuance ever. 187 million carbon credits will be issued and 50% of which will be sold on the offsets market.

Gabon comes second to Suriname as the most forested nation. The country wants to harvest its forests in a sustainable manner to generate income for the country.

Last April, Gabon submitted an application to be part of ART’s TREES program. It’s the standard for quantifying, monitoring, reporting, and verifying emission reductions and removals from REDD+ activities.

This application covers Gabon’s entire forest spanning 23.5 million hectares. This is where the carbon credits will be from. They’ll most likely end up on the market before the COP27 event.

Carbon Credits from Protecting Forests

Gabon is 88% covered by tropical rainforest. Its forests are part of the Congo Basin, the Earth’s second-largest tropical forest after the Amazon.

Lee White, Gabon’s environment minister, said that preserving forests is “almost a moral responsibility” and a matter of national security. He also said that:

“The Congo Basin forest sends rainfall to the Sahel, Ethiopia and beyond… and a plunge in precipitation elsewhere could destabilize parts of Africa.”

The country is finding ways to preserve its thick carbon sink while diversifying its economy from oil at the same time. It’s the first African nation to be paid for its forest protection efforts. Such an initiative helps forests capture and store more carbon.

In fact, it received its first payment of $17 million from the Central African Forest Initiative (CAFI) for such work.

The carbon credits Gabon plans to sell can be at around $291 million. It depends on the average price for similar projects calculated by a carbon offsets data provider.

This huge issuance may flood the one billion carbon market if the country sells the credits all at once.

Each carbon credit represents a ton of planet-warming CO2 that’s avoided, reduced, or removed from the atmosphere. Firms use these credits to offset their carbon emissions. They can buy credits traded on carbon exchanges or they can also invest in projects that generate them.

There are some doubts in the impact of REDD+ projects in reducing emissions. Other heavily forested countries suspended their carbon credits programs to ensure proper regulation. Indonesia and Papua New Guinea are some examples.

Yet, REDD+ projects remain the most popular in the voluntary carbon market. In fact, they receive the highest prices and have the biggest share of the market value.

Gabon’s carbon credit generation

White addresses the concern by claiming that Gabon has reduced its emissions by 90 million tons yearly. That’s in comparison to its 2000-2009 baseline emissions. And this is due to preserving its forests and avoiding deforestation/degradation.

In particular, the forest elephants in the country’s jungle increase by over 50% to 95,000. Plus, there are several protected wetland sites, heritage sites, and national parks put up. They help preserve and protect the thick forests.

These vegetation-dense forests suck up more CO2 than they emit. Hence, they’re known as carbon sinks.

The environment minister also revealed the plan of TotalEnergies SE to use the credits as its offsets. This would be via the oil major’s acquisition of Compagnie des Bois du Gabon (CBG). It controls more than 1.48 million acres of forest which is about 2.6% of the country’s land mass.

The oil company plans to produce carbon offset credits along with developing a forest management model. The credits generation will be through reforestation, agroforestry and forest conservation.

But the minister said that they’re relying on allowances (concessions) to fuel their timber transformation efforts. They’d banned the export of unprocessed logs to boost this industry. 

About a dozen Chinese firms own forest concessions in Gabon, with over 30 others processing the wood.

He also commented that selective logging is one way to boost carbon capture in the long run than no logging.

That’s because the former lets the sunlight reach the soil ground of the forests. And that’s beneficial as it promotes more tree growth. In effect, more carbon is sequestered.

Meanwhile, Gabon is creating its national REDD+ registry to track payments from different projects. All carbon credits created must enter the registry. And even if issuances are from voluntary carbon standards, the government still owns full rights to them.

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Indigo Agriculture announced its first-ever production of 20,000 soil carbon credits that it will sell as emissions offsets to large companies.

U.S.-based Indigo Ag harnesses science and technology to help improve the sustainability and profitability of the agriculture industry. One of its core products is carbon.

This historic milestone for Indigo’s carbon farming program makes agricultural carbon credits a new revenue stream for farmers. Climate Action Reserve (CAR) will verify and issue these ag carbon credits.

CAR is a non-profit registry and carbon credit standard in California. It’s the largest state-level carbon standard so far.

Indigo Ag Carbon Farming Program

Indigo’s carbon farming program is one of the projects by agriculture firms tapping market-based solutions to capture and store carbon on the farm’s soils. It offers a credible, nature-based climate solution for businesses.

While carbon removal technologies are emerging to help limit global warming, they face the major challenge of scale up. Meanwhile, nature-based solutions have been around in removing greenhouse gases.

Agriculture has historically produced less than 1% of voluntary carbon credits. The issuance of these credits shows how farmers can help mitigate climate change. And that’s through one of the world’s biggest and most vital carbon sinks – the soil.

Hence, there has been growing recognition and demand for ag soil carbon credits.

According to Indigo CEO Ron Hovsepian:

“It is hard to overstate the importance of this milestone… This issuance validates the role of agriculture in meeting the world’s urgent need for the kind of sustainability and climate solutions… that Indigo’s network of farmers, soil scientists, buyers, and partners have worked tirelessly to realize.”

CAR’s issuance of 20,000 farm soil carbon credits is the very first for generating quality offsets via a carbon farming program. It’s part of the growing voluntary carbon market which experts expect to reach $50 billion by 2030.

Indigo said that partnering with the CAR would reassure buyers of its ag soil credits. Their credit buyers include JPMorgan Chase, Barclays and The North Face.

As for CAR’s President,

“This milestone is the result of a collaborative effort to create an innovative, robust solution for accurate, cost-effective credit generation in agriculture… These credits are tangible evidence that farmers gain a new credible source of income and benefit from the massive global investment in carbon credits needed to solve the climate crisis.”

Here’s how ag carbon credit generation by Indigo works:

Generating Soil Carbon Credits

Indigo adopted a hybrid approach that combines soil sampling and modeling to help farmers generate ag carbon credits that meet industry quality standards.

The CAR then verifies and issues the credits for the use of Indigo’s global network of about 20 entities committed to buying credit offsets.

The credits reflect the works of 175 growers/farmers who shifted to climate-friendly farming practices. Others call this regenerative farming that involves planting cover crops and less soil tillage. They cover over 100,000 acres of land during the 2018-2020 growing seasons.

Indigo plans to at least double the amount of credits offered in its next tranche.

There are concerns, however, that make some farmers still hesitant to join carbon farming programs. These are:

Reluctance to make disruptive changes to farming practices
Hesitant to take on the added costs for things like cover crop seed.

But soil carbon credit buyers, especially the big companies, are willing to pay for their environmental value.

In fact, Indigo contracted to sell the credits at $40 per ton, up 100% from $20 in 2020. Farmers who sequester carbon for about 0.3 to 0.6 tons per acre will receive 75% of the price.

Here are the steps how farmers can earn carbon credits via Indigo’s carbon farming program:

To date, there are almost 2,000 farmers and 5 million acres enrolled in Indigo’s carbon farming program. The firm and its partners give farmers the tools they need to take part in the carbon market and enjoy its benefits.

Indigo’s second carbon credit issuance will be early next year. The firm expects it to be at least double the size of its first tranche.

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The world of carbon offsets and carbon offset programs can be quite complex and intimidating. So, if you’re looking for the best carbon offset programs for 2022 but don’t know your options, this article will guide you through.

You’ll learn the important concepts, which carbon offset program should you choose, and why investing in this space matters.

What is a Carbon Offset?

First things first. We need to define what does it mean by a carbon offset.

Essentially, it refers to a credit bought by an individual or entity to compensate for its carbon emissions or footprint. One carbon offset generally represents one ton of CO2 reduced or removed.

And so carbon offsetting means financially supporting a project that can reduce emissions.

Carbon offsets are produced by companies that remove CO2 from the atmosphere. The offsets are then sold to firms that emit (or have emitted) CO2 into the air.

In a sense, you can think that offset-producing entities are funded by companies that emit CO2 or its equivalent.

Trading of carbon offsets happens both in the compliance carbon market (regulated by the government) and in the voluntary carbon market (VCM) where bulk of them are sold.

A very identical concept to carbon offsets is carbon credits. While both terms are created for the same goal – to abate climate change – carbon credits are originally created through government regulations.

The government limits the amount of GHG that companies can emit by setting a cap on them with certain tons of CO2 emissions they’re permitted to emit. These allowed emissions correspond to carbon credits.

Same with a carbon offset, one carbon credit equals one ton of CO2 reduced or removed.

Below is the rising trend of voluntary carbon offsets issued since 2005 in metric ton CO2e.

Carbon offset project vs. carbon offset program

Many people often take carbon offset programs one and the same as carbon offset projects. But they’re actually two different concepts.

A carbon offset project is an initiative developed to reduce actual GHG emissions. It can be in any sector, agricultural to industrial.

On the other hand, a carbon offset program refers to a set of standards made by an organization to measure, regulate, and review carbon offset projects.

The best carbon offset programs are also known as carbon standards or registries. They allow individuals or companies to invest in carbon offset projects locally or internationally to balance their carbon footprint. They ensure that the projects are trustworthy.

Here are the four largest and best carbon offset programs for 2022 that you can find in the market. They all have a solid track record of performance that you can verify.

Top 4 Carbon Offset Programs

Let’s discuss each one of them in detail so that you know which one fits for your carbon offsetting needs.

1. Verra: The Verified Carbon Standard

Verra is a non-profit organization headquartered in Washington, D.C. Since it was launched in 2006, Verra’s VCS is the most known voluntary carbon offsetting program available today.

It’s the world’s most widely applied program and you’re most likely familiar with its logo. It appears when you decide to offset your carbon footprint when buying airline tickets.

Offset projects certified by VCS Program

To date, Verra has more than 1,806 certified VCS projects that collectively reduced or removed over 928 million tons of CO2 and other GHG emissions. The VCS program allows certified projects to turn their GHG emission reductions and removals into carbon credits.

The Program focuses on GHG reduction attributes only and does not require projects to have additional environmental or social benefits. It’s supported by the carbon offset industry players – project developers, big offset buyers, verifiers, and projects consultants.

The projects in Verra’s carbon offset program fall under 15 major sectors. They all undergo Verra’s rigorous rules and requirements. They include a number of technologies and measures that reduce or remove CO2 and other GHGs.

These involve the renewable energy, forest and wetland conservation/restoration, transport efficiency improvements, and more.

When it comes to renewables, here’s Verra-certified credits by country from 2009-2021.

Same with the other best carbon offset programs for 2022, Verra issues a unique number to each carbon credit generated by an offset project.

These numbers are called Verified Carbon Units, or VCUs. Individuals and companies wanting to offset their emissions can buy these credits in various carbon exchanges in the VCM.

VCS is also working to develop carbon crediting procedures for seabased activities, such as kelp farming, sustainable fishing and seagrass meadow restoration.

These projects have the potential to reduce or remove over one billion tons of CO2 from the air each year, all while restoring ocean ecosystems.

How does the VCS process work?

A process exists for approving GHG programs that meet VCS Program criteria. The project/program should meet the following criteria:

must comply with the VCS Program,
hire an external qualified consultant team for a detailed gap analysis of the two programs to evaluate the proposed program, and
then the Verra Board decides to either fully adopt or adopt elements of the other offset program

If an entire offset standard is adopted by the VCS, all the auditors and methodologies are automatically accepted. Also, credits certified by that standard can be fungible with VCUs.

Verra periodically reviews approved programs to ensure compliance with the VCS Program.

2. The Gold Standard

The Gold Standard (GS) is a voluntary carbon offset program unique from others. Unlike Verra, it puts the UN Sustainable Development Goals (SDGs) front and center when certifying offset projects.

GS was developed with the leadership of the World Wildlife Fund (WWF), HELIO International, and SouthSouthNorth. It focuses on offset projects that provide lasting social, economic, and environmental benefits.

Also, the GS program is applicable to both voluntary offset projects and to Clean Development Mechanism (CDM) projects.

The GS CDM was launched in 2003 after a 2-year period of consultation with stakeholders, governments, non-governmental organizations, and private sector specialists from over 40 countries.

The GS for voluntary offset projects also known as GS Verified Emission Reduction or VER was launched in 2006. The project registry which contains all projects implemented through the GS program took off in 2018.

Offset projects that Gold Standard certifies

For a carbon offset project to be accepted by GS it must perform assessment of its community impact. It must also ensure that populations nearby are also benefiting from the project.

In general, offset projects need to contribute to at least 3 out of 17 UN SDGs to be certified. And like other best carbon offset programs in 2022, GS projects fall under these major categories:

renewable energy,
reforestation, and
community service projects (waste management)

Most of the GS projects are in developing, low, and middle-income countries.

Why offset with Gold Standard?

In a word, impact. This means that every dollar, Euro, pound or peso you spend offsetting creates more value for local communities and ecosystems. It also contributes in a measurable way to the UN SDGs.

The Gold Standard is considered one of the most rigorous carbon credit programs for 2022. In fact, over 80 NGOs are endorsing it, including the David Suzuki Foundation and WWF.

To date, about 2,000 GS-certified projects in over 80 countries have prevented >173 million tons of CO2 emissions.

You can directly support projects certified by Gold Standard through its site. Prices vary per type and purpose. You can also buy credits for Gold Standard–verified projects through various carbon retailers or exchanges.

3. Climate Action Reserve (CAR)‍

Climate Action Reserve began in 2001 as the California Climate Action Registry. Its mission is to encourage companies and other organizations to measure, manage and reduce GHG emissions.

The CAR is a national offsets program focused on ensuring environmental integrity of GHG emissions reduction projects. Its main purpose is to support financial and environmental value in the voluntary carbon market. CAR does that by:

establishing high-quality standards for quantifying and verifying GHG emissions reduction projects,
overseeing independent third party verification bodies,
issuing carbon offset credits, Climate Reserve Tonnes (CRT), generated from projects
tracking the credits over time on a transparent and accessible system.

CRTs are developed and quantified using project protocols. Adherence to these standards ensures emissions reductions are real, additional, and permanent.

Offset projects that CAR certifies

CAR registers and certifies carbon offset projects based on their permanence. Their GHG reductions must also be accounted for and audited.

And same with Gold Standard, CAR also considers the project’s social and economic benefits. But not all carbon offset programs in 2022 do that.

Most of CAR’s projects include:

Coal mine methane capture,
Landfill gas collection,
Forestry and grassland
Even rice cultivation

They’re in the United States but CAR also certifies projects in Canada and Mexico.

All carbon offset credits generated by CAR-certified projects are given a unique serial number. This helps tracking each project effectively.

More importantly, the number assures buyers that a “retired” credit isn’t eligible for selling or transferring. Retired means credits have already been used to offset emissions.

All project information is publicly available in the CAR system.

Why choose CAR?

CAR is considered the premier voluntary carbon offset program for the North American carbon market. In 2021, CAR achieved more than 150 million metric tons of GHG reductions.

CAR doesn’t sell carbon credits directly to consumers. To buy carbon offset credits, you’ve to go directly to a retailer. Then look for the CAR seal of approval.

Examples of retailers that sell CAR-verified credits are Cool Effect, Carbonfund.org and Sterling Planet.

CAR’s emission reduction program has been approved under the Verra’s VCS. CRTs issued by the Reserve can be converted into Verified Carbon Units (VCUs) and transferred to a VCS registry. But VCUs cannot be converted into CRTs.

4. American Carbon Registry (ACR)

ACR is a pioneer on the voluntary emissions and carbon market. It was founded back in 1996 by the Environmental Resources Trust (ERT) as the first GHG registry.

The registry became the American Carbon Registry (ACR) in 2008. And in 2012, ACR was accepted as an approved Offset Project Registry by the California Air Resources Board (CARB). It’s the regulatory body of the California cap-and-trade offset credit market.

ACR operates in both voluntary and regulated carbon markets.

Offset projects that ACR certifies

Projects certified by the ACR are found worldwide and include the following:

improved forest management,
recycling of transformer oil,
carbon capture and storage,

ACR uses “science-based carbon offset standards” for evaluating projects. The program requires projects to show permanent carbon reduction or removal.

Among the many projects that ACR supports is a truck stop electrification initiative. It employs plug-in units that can reduce around 4.1 million tons a year.

It also supports projects that offer farmers financial incentives to voluntarily reduce emissions by curbing their use of nitrogen-based fertilizer.

Why select ACR?

ACR isn’t only the oldest kid on the block when it comes to carbon offset programs. It’s also trusted by the ICAO or International Civil Aviation Organization to supply emission reduction units for the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA).

It’s a scheme that can offset 2.6 billion tons of carbon over the next 14 years.

As with Verra and CAR, you’ll need to visit a carbon retailer or exchange to buy carbon offset credits from ACR-certified projects.

ACR methodologies and protocols are all based on International Standards Organization (ISO) 14064. The program allows project developers to use methods and tools from the CDM. But as long as they go with the ACR’s own standards.

Projects may be transferred between ACR and another registry provided all unsold, non-transferred, and non-retired offset credits are canceled.

Overall, ACR has a 3.1% share of credits issued in the VCM as shown in the chart. CAR gets the 8.3% credits share while VCS and GS issued 68.5% and 20.1% of credits, respectively.

In summary, the table below shows the key comparison among the 4 best carbon offset programs to consider in 2022.

So, why does offsetting your carbon footprint matter?

Take note that offsets aren’t a replacement for actual emissions reduction. BUT they can make a big difference in helping the fight against climate change.

By deciding to buy carbon credits through any of the carbon offset programs above, you’re helping a project remove or prevent planet-warming emissions.

The best part is that buying carbon offset credits will eliminate the last traces of your carbon footprint. For companies, this means addressing their unavoidable emissions.

So, investing in carbon offset credits hits two birds with one stone. It allows you to help people who benefit from the projects and help protect the planet at the same time.

Here’s our complete guide if you want to learn more about investing in carbon credits and carbon offsets.

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