CO2 Compensation — A Crucial Solution for a Sustainable Future

9 min readMar 7, 2023


Reducing carbon emissions has become a critical issue as the effects of climate change become increasingly apparent. The continued rise of CO2 emissions is among the main contributors to the greenhouse effect and subsequently, to global warming. To address this issue, different solutions have been developed, including the practice of CO2 compensation. This article will explain what CO2 compensation is, how it works, and why it is so important to achieve a sustainable future.

What creates the need for CO2 compensation?

Global warming, caused by an increasing concentration of CO2 in the air, leads to higher temperatures, extreme weather, and rising sea levels. To avoid these disastrous effects, we must greatly reduce our carbon footprint. Carbon compensation is one way to achieve this.

What is CO2 compensation?

CO2 compensation requires individuals and organizations to compensate for their carbon footprint by purchasing carbon compensation certificates. Each carbon compensation certificate represents an amount of absorbed, captured or sequestered CO2. These certificates are produced by carbon compensation projects and are sold on the voluntary carbon market.

In this way, CO2 compensation offers a way to reduce carbon emissions while supporting sustainable development. The concept of carbon compensation emerged in the late 1990s as a way to address the issue of climate change. The idea stated that by financing projects that reduce carbon emissions, individuals and organizations can compensate for their own emissions.

Calculating a carbon footprint

The carbon footprint is the total amount of CO2 generated directly or indirectly by an individual or organization. The calculation of carbon footprint considers various sources of emissions, such as transportation and energy consumption.

While with individuals the process is relatively straightforward, businesses often face a challenge in this regard due to the varying scopes of their activities. The scope of the emissions from these activities can vary depending on the type of business and its operations. Generally, carbon emissions from business activities are classified into three scopes:

Scope 1 emissions

Scope 1 emissions can include emissions from a variety of sources such as onsite fuel combustion, emissions from manufacturing processes, and emissions from vehicles. They are the easiest to measure and show the business’s immediate climate impact.

Scope 2 emissions

Scope 2 emissions are indirect emissions from the electricity consumption, heating, cooling and air conditioning of a business. These emissions can originate from power plants that supply electricity to the business or from third-party providers of heating and cooling services.

Scope 3 emissions

These are indirect emissions that occur as a result of the business’s operations but are not directly owned or controlled by the business. This can include emissions from the production and transportation of purchased goods, business travel, employee commuting, and waste disposal. Scope 3 emissions are often the most difficult for businesses to measure and manage, as they can be influenced by factors outside of the business’s direct control.

Businesses need to consider all three scopes of emissions when developing a sustainability strategy. While Scope 1 and 2 emissions are often the easiest to address, Scope 3 emissions can account for a significant portion of a business’s overall carbon footprint, and addressing them can have a significant impact on the business’s sustainability goals.

Purchasing CO2 compensation

To compensate for carbon emissions, individuals and businesses can purchase CO2 compensation. Carbon compensation represents the removal, storage or absorption of a specific amount of carbon. In the case of carbon offsets that amount is equal to 1 ton of CO2 or CO2 equivalent. However, other forms of carbon compensation exist, like Coorest CO2 tokens which represent 1 kilogram of removed carbon. Apart from being a more granular unit of compensation, these tokens also have a number of other distinct advantages.

Use cases

​​The voluntary carbon market (VCM) is a platform for individuals, organizations, and companies to purchase carbon compensation freely. Parties that purchase emission compensation from the VCM are not required to meet emission restrictions imposed by governments. Here are some of the use cases for carbon compensation on the voluntary carbon market:

Corporate sustainability

Many companies use the voluntary carbon market to compensate for their carbon emissions and demonstrate their commitment to sustainability. By purchasing carbon compensation, companies can reduce their environmental impact and enhance their reputation for corporate social responsibility.

Event sustainability

Event organizers use the voluntary carbon market to compensate for the carbon emissions generated by their events, such as conferences, festivals, and concerts. By compensating for their carbon footprint, event organizers can reduce the environmental impact of their events and enhance their sustainability credentials.

Travel and tourism

The travel and tourism industry is a significant source of carbon emissions, with air travel being a major contributor. This is why many individuals and businesses in this industry purchase carbon compensation from the VCM.

Individual carbon footprint

Individuals can reduce their carbon footprint by compensating for the emissions generated by their daily activities. such as home energy use, transportation, and food consumption by purchasing carbon compensation. This helps reduce their environmental impact while supporting sustainable projects and contributing to the fight against climate change. Carbon compensation also promotes awareness and responsibility for personal actions, inspiring individuals to adopt more sustainable behaviours and choices.

Supply chain sustainability

Many companies rely on complex and extensive supply chains to deliver goods and services to customers. Such supply chains can generate a considerable amount of carbon dioxide into the air through activities such as transportation, manufacturing, and energy use. As a result, numerous companies use the voluntary carbon market as a means to compensate for the emissions of their supply chain.

Current issues

There are a number of challenges that CO2 compensation faces such as the need for greater scalability, standardisation, and transparency.

Lack of scalability

​​Despite the promising trends and advancements in carbon offsets, the field still faces significant challenges and obstacles that must be overcome to achieve widespread adoption. One of the key challenges is scalability, as the current level of carbon offsetting is insufficient to address the scale of the climate crisis. Achieving the necessary scale will require significant investment in carbon compensation projects, as well as greater collaboration and coordination across the public and private sectors.

Lack of standardization and transparency

Another challenge is the lack of standardization and transparency in the voluntary carbon market. While there are various certifications and standards for carbon offsetting projects, they are often complex and difficult to navigate, making it challenging for businesses and individuals to make informed decisions. In addition, there is a lack of transparency in the voluntary carbon market, which can lead to issues such as double counting and fraud, undermining the credibility and effectiveness of carbon compensation efforts.

Lack of additionality

Another challenge is the need to ensure additionality in carbon projects, meaning that the emissions reductions would not have occurred without the contribution of the project. This requires careful project selection and monitoring, to ensure that the projects deliver genuine and measurable emissions reductions.

Lack of co-benefits

Another challenge is the need to ensure that carbon projects deliver co-benefits. These go beyond emissions reductions, such as improved social and environmental outcomes. This requires a holistic and integrated approach to carbon compensation, considering the projects’ broader social and ecological context.

The impact of CO2 compensation projects on the environment

Carbon projects have a positive impact on the environment by reducing CO2 emissions and contributing to sustainable development. Renewable energy projects replace fossil fuel-based energy sources and reduce the emissions associated with electricity generation. Energy efficiency measures reduce energy consumption and the associated emissions while maintaining or increasing the level of productivity.

Afforestation and reforestation projects increase the carbon sequestration capacity of forests by planting new trees or restoring degraded forests. As trees absorb CO2 from the atmosphere during photosynthesis, afforestation and reforestation projects can help mitigate the effects of climate change. Carbon capture and storage (CCS) projects capture CO2 emissions from industrial processes or power plants and store them underground or in geological formations, reducing the emissions that would otherwise be released into the atmosphere.

Advantages of CO2 compensation

CO2 compensation offers several advantages, both for individuals and organizations and for the environment.

Advantages for individuals and organizations

Compensating for carbon emissions can bring benefits to individuals and organizations. Firstly, it helps reduce their carbon footprint and fight climate change. Secondly, it helps meet legal requirements and sustainability goals. Thirdly, it can enhance their reputation by demonstrating their commitment to sustainability and environmental stewardship. Supporting sustainable development initiatives, such as renewable energy, through carbon compensation can also bring economic and social benefits to local communities.

Advantages for the environment

Carbon compensation schemes benefit the environment by CO2 emissions and promoting sustainable development. Individuals and organizations may assist limit the amount of CO2 emitted into the atmosphere and lessen the consequences of climate change by sponsoring carbon compensation schemes. Carbon compensation initiatives can also help to conserve biodiversity by protecting natural habitats like forests and wetlands, which provide ecosystem services including carbon storage, water management, and soil fertility.

The future of CO2 compensation projects

The future of carbon compensation is undoubtedly linked to the development of new technologies. As the world grapples with the effects of climate change, there is an increasing need for innovative solutions to reduce carbon emissions and mitigate their impact. One of the most promising areas for the future of carbon compensation is the use of technology to enhance the effectiveness of CO2 compensation projects.

One area where technology is already having an impact on carbon compensation is the use of blockchain. Blockchain enables the tokenization of absorbed carbon, which can be bought and sold on a transparent and secure platform. This enables businesses and individuals to directly support carbon compensation projects and track the impact of their investments. Blockchain technology also ensures the authenticity and traceability of the carbon compensation eliminating the risk of fraud and double counting.

The creation of new tools and methods for detecting and monitoring carbon emissions is another area where technology is expected to have an influence on the future of carbon compensation. Conventional methods for measuring emissions are sometimes intricate and labour-intensive, requiring costly machinery and qualified workers. Yet, cutting-edge tools like satellite imagery, drones, and artificial intelligence are improving the efficiency and accuracy of emissions data collection. This can give a more realistic baseline for determining the success of compensatory measures and assist in identifying locations where emissions can be decreased.

The potential for technology to enhance the effectiveness of carbon compensation is not limited to compensation projects. There are also opportunities to use technology to promote behaviour change and encourage individuals and businesses to reduce their carbon footprints. For example, smart home technology can be used to monitor and control energy consumption, while gamification can be used to incentivize sustainable behaviour.

Of course, the development and adoption of new technologies for carbon compensation will not be without its challenges. Ensuring the security and privacy of data collected by new technologies will be critical, as will ensuring that the benefits of these technologies are accessible to all, not just the wealthiest and most technologically advanced countries. In addition, there may be resistance from traditional players in the carbon compensation market who are resistant to change.


CO2 compensation offers a way to reduce carbon emissions while supporting sustainable development. Coorest’s blockchain-based platform offers several advantages over traditional carbon compensation programs, including transparency, accountability, additionality, diversity of projects, community support, and tokenization. By supporting Coorest’s carbon compensation projects, individuals and organizations can make a tangible contribution to the fight against climate change and support sustainable development.




Coorest makes carbon compensation easy, transparent and accessible for businesses and individuals by using blockchain technology and integrated satellite data.