Carbon neutral means remaining emissions over a period are balanced with carbon credits, following ISO 14068-1. Net zero means cutting emissions across Scope 1, 2 and 3 by 90% or more in line with 1.5 °C, by 2050 at the latest, and removing the small remainder permanently, following the SBTi Net-Zero Standard. In the EU, claims that a product is climate neutral because of offsets are banned from 27 September 2026, and future net zero claims need a verifiable plan.
Carbon neutral: balance with credits
A company, product or event is carbon neutral when its remaining greenhouse gas emissions over a period are balanced by carbon credits from projects elsewhere. The international standard is ISO 14068-1:2023, which replaced the British PAS 2060 when that was withdrawn on 30 November 2025. ISO 14068-1 asks for a measured footprint, a carbon neutrality management plan that puts reductions first, credits that meet quality criteria for what remains, and a claim that says exactly what it covers. A claim can be renewed every year, even if emissions barely fall.
Net zero: cut deeply, then remove what is left
Net zero is a target state, not a yearly balance. Under the Science Based Targets initiative, a company reaches net zero when it has cut its emissions across Scope 1, 2 and 3 in line with limiting warming to 1.5 °C, by 90% or more for most companies, by 2050 at the latest, and neutralises the small remainder with permanent carbon removals. Credits bought along the way do not count towards the reductions. Version 2 of the SBTi Corporate Net-Zero Standard was published in June 2026 and can be used for targets from 1 February 2027; version 1 remains usable until 31 January 2028.
The difference at a glance
Carbon neutral can be claimed today, with offsets. Net zero is a claim about the future that needs a credible path. Carbon neutral is often scoped to a site, product or Scope 1 and 2 only. Net zero covers the whole value chain, including Scope 3, which for most companies is the largest part. A company can be carbon neutral this year and still be far from net zero.
What you may claim in the EU from September 2026
Directive (EU) 2024/825 on empowering consumers for the green transition applies from 27 September 2026. It bans claims that a product has a neutral, reduced or positive impact on the environment because of offsetting, so “climate neutral product” labels based on credits are no longer allowed. Claims about future environmental performance, such as “net zero by 2040”, are only allowed with clear, verifiable commitments, a detailed and realistic implementation plan with measurable targets, and regular checks by an independent expert. Generic claims such as “green” or “climate friendly” need recognised excellent environmental performance behind them. In the UK, the Competition and Markets Authority can now fine companies directly for misleading claims.
How to talk about it safely
Say what you measured, what you reduced, and what you fund, separately.
- Report your footprint with its scope and year, and the change against your base year.
- State targets with a year, a scope and a plan, and report progress against them every year.
- Describe carbon credits as a contribution to climate projects, not as cancelling your emissions.
- Avoid “carbon neutral” or “climate neutral” on products sold to consumers in the EU.
Doing it in Greener Ahead
Carbon accounting in Greener Ahead measures your footprint for Scope 1, 2 and all 15 Scope 3 categories, with the emission factor and source behind every tonne, and compares every year with your base year: the figures any claim has to rest on. It costs €1,495 per year with unlimited users, and you can try it free for 14 days without a card. Climate strategy, coming soon, adds reduction targets, an action plan and progress against the path you chose. Check the pricing page for current details.
Carbon neutral and net zero compared
The main differences.
| Carbon neutral | Net zero | |
|---|---|---|
| When | Claimed for a past period | A target state, by 2050 at the latest |
| Reductions | Expected, but no fixed level | 90% or more for most companies, in line with 1.5 °C |
| Remaining emissions | Balanced with carbon credits | Neutralised with permanent removals |
| Scope | Often a site, product or Scope 1 and 2 | Scope 1, 2 and 3 |
| Standard | ISO 14068-1:2023 | SBTi Corporate Net-Zero Standard |
| EU consumer products | Offset-based claims banned from 27 September 2026 | Future claims need a verifiable plan |
Check every claim against this list
Before a climate claim goes on the website or the packaging.
- Does it say which scope, period and part of the company or product it covers?
- Is there a measured footprint behind it, with the method stated?
- Is a future target backed by a plan with interim targets and yearly progress?
- Are carbon credits described as a contribution, not as cancelling emissions?
- Would a customer reading it alone understand it correctly?
Sources and scope
- ISO: ISO 14068-1:2023 Climate change management, carbon neutrality
- SBTi: Corporate Net-Zero Standard
- EUR-Lex: Directive (EU) 2024/825 on empowering consumers for the green transition
These resources explain a preparation workflow. Check your selected standard and recipient requirements before sharing your report.
Joost ThissenFounder
