Achieving carbon neutrality involves an entity, be it an organization, product, service, or activity, reaching a balance between the carbon dioxide it emits and the amount it removes or offsets from the atmosphere. This state signifies a commitment to environmental responsibility by effectively neutralizing the entity's impact on climate change.

To become carbon neutral, companies, processes, and products must first quantify their carbon emissions. This initial step involves a comprehensive calculation of their carbon footprint, encompassing all relevant sources of carbon dioxide release. Following this, entities must implement strategies to reduce these emissions as much as feasible. For emissions that cannot be eliminated, compensation is achieved through carbon offsetting initiatives, which may include projects focused on renewable energy, reforestation, or energy efficiency improvements.

While both carbon neutrality and net zero aim to address climate change, they follow distinct approaches. Carbon neutrality is achieved by offsetting emitted carbon with an equivalent amount of sequestration or offsets, such as purchasing carbon credits or undertaking tree-planting projects. This approach does not necessarily entail a reduction in emissions. In contrast, reaching net zero involves a more rigorous process. It necessitates substantial reductions in greenhouse gas emissions across the board.

Only the unavoidable residual emissions are offset, aiming for an equilibrium where the volume of emissions released is matched by the amount removed from the atmosphere. Achieving net zero is a more comprehensive commitment to minimizing an entity's climate impact, highlighting the importance of emission reduction alongside offsetting measures.