The Oxford Offsetting Principles Update

The University of Oxford recently released its updated principles for Net Zero Aligned Carbon Offsetting. This publication is a resource to guide the design delivery of net zero commitments by governments, cities and companies. In order to claim contributions to tackling climate change, “net zero” has long been the bedrock aspiration for many institutions – yet pathways for achieving it have been fraught with difficulty, scandal and critique. 

However, there are a number of new entities working to improve the integrity of the voluntary carbon market (VCM) – working on both the supply side (i.e. identifying high-quality credits) and demand side (i.e. guidance for high-quality claims by companies).

Calyx Global ratings are aligned with the Oxford Principles. In particular, the first principle is to cut emissions while also ensuring the environmental integrity of credits used to achieve net zero. It speaks to ensuring “social and environmental integrity” and that credits should have a low risk of “negative unintended consequences to ecosystems and communities.” Calyx Global’s GHG integrity and SDG impact ratings inform carbon credit buyers of both social and environmental integrity. Furthermore, Calyx Global is the only ratings agency that offers environmental and social risk screening. 

Another key element of the Oxford Principles is illustrated by the image below – where companies may start by focusing on both avoided emissions and removals, using credits from both technologies and nature, but over time moving towards durable removals. 

Source: Oxford Principles for Net Zero Aligned Carbon Offsetting (revised 2024), University of Oxford.

The Oxford approach conforms well with Calyx Global’s analysis of the current state of the VCM, and how companies can increase their impact today when buying credits. The highest quality credits we have rated to date are avoided emissions. There are also some removal-based credits that reach into our “B” ratings range. Often, the reason they are not in the “A” range is due to the risk of reversal, as most are nature-based removals. There are also a number of efforts to increase the supply of “durable CDR” (carbon dioxide removals), but these are only emerging. Currently, much of the supply is “off registry” (i.e. not issued through a carbon registry at any significant scale) and often at prices that are out of reach for many companies.  

Figure: Calyx Global ratings of GHG integrity for removal vs. avoided emission projects
Number of Calyx ratings in each category, noting that removal-based projects tend to generate fewer credits per project

It would be hard to provide sufficient high-quality supply for the current demands of the market if only removals were considered. We agree with the Oxford Principles, in that we need to see a transition to removals over time and particularly durable removals if we are to meet the Paris Agreement goal of limiting the temperature increase to 1.5°C above pre-industrial levels by mid-century. But we also agree that there is an urgency to reduce emissions today – not only from fossil fuels but also other important greenhouse gases (such as methane, CFCs or N2O). 

Since the initial publication of the Oxford Principles in 2020, interest in best practices for offsetting strategies to reach net zero has grown. In the latest edition of the principles for net zero-aligned carbon offsetting, the authors have highlighted the following areas as the most significant updates: 

• Reinforcing the urgency of emission reductions;

• Re-emphasizing the need to close the carbon removal gap;

• Highlighting the importance of Nature-based solutions (NbS) for addressing the drivers and impacts of climate change;

• Clarifying the durability risks and co-benefits of different types of carbon removal and storage;

• Recognizing consensus on, and defining new international guidance on the nature of net zero and nature commitments;

• Recognizing the value of mitigation efforts outside of organizational net-zero targets.

Calyx Global can help companies that wish to follow the Oxford Principles by providing independent and rigorous ratings of carbon credits. Our ratings can be used when considering a portfolio that aligns with the Oxford Principles, starting today. We help companies identify higher-quality credits, whether avoided emissions or removals and including both nature- and technology-based credits.

To learn more about our approach to carbon credit ratings, read Calyx Global Ratings Explained.