Carbon offsetting explained

To reduce our carbon footprint, we can make small changes to our lifestyle and contribute to buying carbon offsets.

Progress Your Home
10 min read
As consumers, it can be overwhelming to understand how we can help to play our part in reducing our carbon footprint and contributing towards a long-term sustainable future for our communities.

One way to contribute to doing better for the environment is by committing to going carbon neutral. Going carbon neutral means taking action to reduce and offset greenhouse gas emissions (including carbon dioxide in the atmosphere), so that the net emissions associated with an activity are equal to zero.

One of the most common ways to achieve carbon neutrality is through programs involving carbon offsets.

What does ‘carbon offsetting’ mean?

As we live and go about our daily lives, this contributes to our carbon footprint. We can cause carbon dioxide emissions by doing things like using power, travelling to and from work in vehicles, consuming food that creates carbon dioxide while produced, packed and transported for sale – just to name a few causes. Our carbon footprint is ‘the total greenhouse gas (GHG) emissions caused by an individual, event, organisation, or product, expressed as carbon dioxide equivalent’.

We all have a carbon footprint, but we also have an opportunity to do our best to reduce our carbon impact by making small changes in our day-to-day lives. For example, we can catch public transport instead of driving, or buy locally made or eco-friendly products.

There are lots of ways you can minimise the carbon dioxide you produce at home. And many of these choices can have great benefits for our bank accounts, health and fitness too, like saving money on your power bills, eating fresh local veggies or riding a bike to run errands near home.


Every little bit helps when it comes to reducing our greenhouse gas emissions. To help make a bigger impact in reducing carbon dioxide produced by modern life, we can also get involved with carbon offset programs.

Carbon offsetting is a way of helping finance emission reduction projects around the world, through doing things like choosing to offset emissions associated with your electricity and gas, your flight bookings, and even the miles travelled by your parcels when you shop online. It’s an option offered by many businesses whose customers are seeking the ability to reduce the environmental impact of their day to day activities.

Carbon offsets are units or ‘credits’ that represent reductions or removals of greenhouse gas emissions from the atmosphere, and helping to buy carbon offsets allows individuals and businesses to invest in projects around the world to reduce their carbon footprints. Projects are most commonly designed to reduce future emissions, such as through clean energy technology or protecting ancient forests from being cleared.

How do carbon offsets work for AGL customers?

For us to offer electricity and gas products that are carbon neutral certified by Climate Active, we must take action to reduce and remove from the environment the volume of greenhouse gas emissions associated with the energy being supplied to those customers who opt in to Carbon Neutral products.

For an electricity product, this includes emissions associated with the generation, supply and use of electricity at the home or business. For a gas product, this includes the emissions associated with the extraction, production, storage, supply and use of gas.

When you pay your power bill you have the choice to choose carbon neutral electricity and gas certified by Climate Active. This means AGL will take action, including purchasing eligible offset units, to cover emissions associated with the supply of your electricity and gas.

Offset units help to fund great projects in Australia and around the world that are issued by organisations such as the Clean Energy Regulator (in Australia) and the Gold Standard (overseas projects).

These are projects like the Westmere Reforestation Project which is helping to re-grow native Aussie forest environments, and the Kenya Burn Stove Project which is helping families in Kenya to reduce emissions and create a safer household environment by upgrading their stoves to a more environmentally friendly and safer model.

Allowing customers to contribute to projects like these that have economic and social benefits to communities around the world and here in Australia, as well as making a positive impact on the environment, is a way of investing in a better future for all of us.

Why should I offset my carbon?

As an individual or business owner, there are lots of things you can do to reduce your carbon footprint. You may choose to limit travel, start cycling to work, choose energy-efficient appliances or convert to renewable energy.

Carbon offsetting can also help to make a difference towards doing better for our environment. You can read more ideas for how to reduce your carbon footprint here.

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Want to learn more about carbon offsetting?

Carbon Neutral is helping Aussie households minimise their carbon footprint, by reducing and offsetting emissions associated with their electricity for $1 per week and gas for $0.50 per week.

Find out more