A collage showing two images: stacked servers in an office and an outdoor alpine scene with snow-tipped trees and a clear sky.

Reality check – What does 100% carbon neutral actually mean?

As a consumer, I value when companies set aggressive environmental targets such as “100% carbon neutral” and I’m even more delighted when companies announce they have achieved such targets. What concerns me is that the reality behind the words “100% carbon neutral” is much more complex than you would think. Greenpeace recently published a report about who’s winning the race to build a green internet. In addition to giving a good analysis of who’s winning this race, the report also sheds some light on the complexity of the regulations regarding Renewable Energy (RE). 

The terminology in short:

·     100% Renewable: Long-term commitment to become 100% renewably powered.

·     Clean energy: Often used to refer to renewables along with existing large hydroelectric and sometimes also nuclear or natural gas

·     Carbon neutral/Zero net Carbon: Broadly a commitment to have measured and somehow eliminated or “offset” all carbon dioxide emissions from company activity 

“Offsetting” carbon emissions is an interesting topic in itself because it could actually mean no effect whatsoever on the environment. Some important terminology to pay attention to:

·     Renewable Energy Credits (RECs) and Virtual Power Purchase Agreements (Virtual PPAs): include property rights created when renewable energy is generated. These can be traded in other locations than where the electricity is being used which means that there is no guarantee that it is driving new RE projects. E.g. in a market flooded with RE the price of RECs and PPAs is low and the offsetting is cheap while the demand for fossil fuel remains close to constant.

·     Power Purchase Agreements (PPAs) used locally: Most PPAs are virtual but if they are used on the same grid as the energy produced, it sends a strong signal to the local utility by indicating a reduction in demand for fossil fuel.

A “100% renewable” target is the best indication that there will be a real positive impact on the environment. Data centers today use 3% of the global electricity supply and 2% of total greenhouse gas emissions. This means they have the same carbon footprint as the airline industry. That Facebook in 2011 set a long-term goal to be 100% renewably powered set the standard within the IT industry and many of the big leaders e.g. Google and Amazon were quick to follow with similar targets. This is environmental advocacy at its best and we can only hope that other industries will be inspired.   

Now to the tricky part, enabling these companies to become 100% renewably powered. A challenge with many renewable energy sources is that they’re intermittent. This means that on a windless day when the sun isn’t shining, you don’t get renewable power and the dependency on fossil fuel remains. The good news is, there are viable alternatives for renewable base load power.