With a new year comes new sustainability goals and important interim emissions targets. Once internal reductions are underway, it's critical to invest in projects which can offset emissions you're unable to reduce on your own. The supply of carbon credit and offset projects is diverse and building a robust carbon credit portfolio has emerged as a critical component of comprehensive climate strategies. To position themselves for net-zero climate targets in 2030, companies must choose the components that matter to them.
Below we outline eight key components to include in your approach to building an impactful carbon credit portfolio in 2025.
1. Speed
Holding integrity and permanence constant, the single most important attribute of offsetting is speed. Projects that deliver their impact within a calendar year are more important and create greater climate outcomes. It's relatively easy to set longterm goals and creep toward them as the impact of emissions continue to increase. Market leaders, however, pursue projects that can have verifiable impacts today. Industrial gas elimination projects, like the projects we work on at ClimateWells, are the fastest way to deliver results.
2. Credit Matching
Each industry has unique emission sources. Your carbon credit investments should directly address these sources, strategically offsetting your emissions by matching credits with your emission sources. For example, lumber companies can prioritize protecting and growing new forests, directly offsetting deforestation and associated emissions. Petrochemical and natural gas companies can invest in projects aimed at reducing oil and gas emissions, such as advanced methane capture technologies.
Aligning credits with your supply chain’s emissions profile ensures your offsets are both relevant and impactful.
3. Invest Where You Operate
A percentage of your portfolio should be dedicated to projects in the regions where your operations contribute to emissions. Supporting local initiatives fosters goodwill, improves community relations, and ensures tangible benefits for the areas most affected by your activities.
For example, JPMorgan Chase partnered with us in reducing emissions in Los Angeles since it has a large corporate presence in the area. This initiative helped reduce methane emissions and improve overall air quality in nearby communities.
4. Durable Carbon Removal
While reducing emissions now is critical, catalyzing innovation in durable carbon removal (CDR) technologies is also important for future climate stability when all emissions have been reduced. These technologies, such as direct air capture and mineralization, remove carbon permanently and will play a vital role in achieving net-zero emissions in the long term. Allocating a small portion of your portfolio to durable CDR supports the development and scalability of these emerging technologies.
5. Nature-Based Solutions
Protecting nature is critical to slowing down climate change and safeguarding much-needed biodiversity. Investing in nature-based solutions (NBS), like reforestation and peatland preservation, helps protect ecosystems that act as natural carbon sinks while delivering co-benefits like improved water quality and resilience to extreme weather events.
6. Frontline Communities and Job Creation
Climate change disproportionately affects frontline communities. Every project in your portfolio should prioritize creating jobs and infrastructure in areas most vulnerable to climate impacts. This ensures that the transition to a low-carbon economy is equitable and inclusive.
Los Angeles, for example, houses over half a million people who live less than a quarter mile from an active oil well. Nearly a third of the city’s wells are located near schools, parks, homes, and other residential areas and disproportionately affect communities of color.
The Wilmington neighborhood in Los Angeles is home to the third-largest oil field in the continental United States and has the highest asthma and childhood cancer risk area in the state. ClimateWells’ Wilmington East project will shut down 30 wells across three sites, reducing respiratory risks for nearby families and children and improving their overall quality of life. The Wilmington project also offers employment opportunities for skilled workers in the area, from cementing and welding to regulatory and trucking.
7. Methane and High Global Warming Potential Gases
Methane and refrigerants are far more potent greenhouse gases than CO2 – so capturing or eliminating these gases in the short-term can abate the impacts of climate change faster than tackling CO2. Including projects that capture or reduce emissions from these sources can significantly amplify the impact of your portfolio.
ClimateWells’ work decommissioning marginal wells tackles methane emissions; other projects in this category span landfill methane capture and the destruction of high-GWP refrigerants.
8. Permanence
The projects in your portfolio should aim to be permanent. While not every project can ensure permanence, appropriate project selection and robust management can strengthen the permanence of your offsets.
Methods like reforestation, afforestation, and soil carbon storage aim to capture and store carbon dioxide over a shorter period of time. These methods prevent carbon from re-entering the atmosphere but any sequestration done within nature faces certain permanence issues. Temporary offset projects such as short-term forestry initiatives, carry the risk of reversals like tree loss due to deforestation, fire, or disease.
Permanent offset projects can align your investments with long-term sustainability goals, ensuring emissions that are offset today won’t reappear and undermine future commitments. Choosing permanent carbon offset projects addresses your business’ current emissions and contributes to durable climate change mitigation, enhancing your reputation and fostering a sustainable future for 2025 – and beyond.
