A carbon offset is a unit that represents a reduction of CO2e emissions. One carbon offset corresponds to 1 tonne of CO2e (carbon dioxide equivalent) removed from the atmosphere, i.e. sequestered and stored.
Carbon offsets are used to balance greenhouse gas emissions, i.e., the CO2e emissions balance of companies, entities, products, services or units. They act as a form of permission to emit the amount of CO2e purchased in the form of carbon offsets.
Suppose an entity wants to reduce its carbon balance. In that case, it can purchase a certain number of carbon offsets, thereby reducing its balance by the emissions absorbed in the selected sequestration project.
Carbon offsets come from different sequestration projects, such as agroforestry practices, renewable energy production, or conservation of existing greenhouse gas reservoirs such as peatlands, grasslands, or wetlands.