Call for evidence outcome

Carbon offsetting in transport: government response

Updated 14 July 2021

Executive summary

Reducing transport emissions is a priority for this government and we have increased our ambition and stepped up the pace of progress.

However, we also recognise that transport decarbonisation will take time and that other measures could complement the policies and commitments put forward in Decarbonising transport: a better, greener Britain.

This call for evidence explored one of these potential measures in detail: the option to offer consumers the opportunity to offset the carbon emissions associated with specific journeys, where specific journey types cannot be avoided.

Carbon offsetting can help individuals and organisations to compensate for any emissions they cannot avoid or reduce by paying for an equivalent amount of emissions to be reduced or removed elsewhere. The call for evidence also asked how we can improve consumer understanding of the emissions associated with journeys and, in turn, what role this could play in mitigating transport emissions.

We received 70 responses to this call for evidence from a range of stakeholders and interested members of the public.

Respondents were almost unanimous that the government should focus its efforts on incentivising the developments needed to make low and zero emission transport technology readily available.

Most responses in support of a role for offsetting in the transport sector included the caveat that this should only be the case while transport decarbonises and that it should be used in such a way that it does not limit or slow down decarbonisation.

Many respondents were sceptical of the potential impact of widespread offsetting on the transition to a zero emission transport system, noting that it could disincentivise businesses and consumers from making efforts to reduce current emission levels.

Several respondents suggested that trusted, government-accredited guidance around offsetting could be key to increasing awareness and improving uptake. Understanding of the environmental impact of transport, and the role offsetting could play in addressing this, remains low.

Respondents were keen to emphasise that any measures introduced for ticketed transport must also be introduced for non-ticketed transport to avoid disincentivising the use of public transport.

Provision of information to the consumer

The first 2 questions in the call for evidence concerned the provision of emissions information to the consumer. While responses were largely in favour of increasing the amount of information provided to consumers on the emissions and the associated environmental impact of their transport choices, there was division over the extent to which this would influence consumer behaviour and a wide range of proposals as to what form the information should take.

Question 1

Do you believe that greater information provision on journeys’ carbon emissions would affect consumer behaviours? Would this lead to lower carbon choices? What evidence can you provide?

Several respondents evidenced that information provision has a verifiable impact on consumers’ decision-making.

Respondents pointed to the effect of ‘flight shaming’ in Germany and Sweden, suggesting that a switch in public awareness and consciousness has encouraged a modal shift away from flying.

Another response reported that over 10 million customers have opted for the least carbon intensive choice when comparative emissions information is provided on the same journey.

Some respondents were confident that consumers do want to make more environmentally friendly choices, but many also felt that the lack of information currently provided means there is limited awareness of the impacts of transport choices on the environment.

Conversely, other respondents provided reasons to suggest that information on emissions does not impact consumer behaviour in transport. This included the:

• attitude-behaviour gap, where consumers do consider the impact of their transport choices on the environment but do not modify their actions accordingly
• relative importance of other factors in transport-related decisions (including comfort and cost)
• statistical lack of concern for the impact among most people when using transport

Question 2

What information regarding carbon emissions do you believe consumers should be provided with? How should this be provided? Where or when in the customer booking process should this be provided? Do you have evidence to support your view?

Respondents were divided on the information that should be provided to consumers.

Some responses called for direct provision of emissions information and suggested this could be communicated as a carbon metric (such as the exact emissions generated by the journey).

Many wanted to see a single, reliable system for calculating emissions, with some arguing this should be government-led to provide credibility.

Several respondents stressed the need for accuracy and ease of understanding, particularly if used to drive uptake of carbon offsetting, as inaccuracy would cause mistrust.

Other respondents argued that providing consumers solely with carbon emissions information could be confusing, overly granular or not relatable to their daily lives.

Several suggested included relatable information on the environmental impact of the journey, for example, the tangible impact on the planet (such as the effect it may have on a glacier melting) or what would need to be done to offset the impact.

Some suggested providing comparisons between different modes or travel routes to foster more sustainable travel choices. Respondents proposed different methods for providing emissions information, for example, labels indicating how carbon-intensive a mode or journey is.

Multiple responses recommended that this information be included at the beginning of the booking process, while others suggested it should be provided immediately before the process is completed.

Several respondents emphasised that any mandatory information provision must be equitable across modes, including ticketed and non-ticketed, to ensure it did not cause a modal shift away from ticketed transport.

Current emission information and reporting

Question 3

Are travel providers already collecting information on the carbon emissions associated with journeys? If so, how is this information collected and reported? Does this vary across modes of transportation? Are they providing this information to passengers?

Respondents generally reported that travel providers across modes were recording their own emissions information, often in accordance with modal domestic or international regulations, but there were different views on whether this information is passed on to the consumer.

This information was largely, though not entirely, available to consumers who specifically looked for it, but not provided directly at the point of purchase or otherwise.

Question 4

To what extent are current energy use and emissions reporting and audit requirements sufficient in ensuring that travel companies have the right data to provide journey- and product-specific emissions information? Where they are not, what would be required?

Responses were split on whether current regulatory frameworks and requirements are sufficient to enable provision of journey- and product-specific emissions information. Strict reporting requirements are in place for most transport sectors, but current systems are set up to achieve different purposes.

In some instances, the aim is to disclose total emissions produced by a company. However, journey-specific footprints are a combination of supply and demand data and are thus more complex to derive than total emission figures.

Several respondents outlined the factors that should be included in any reporting and audit requirements to enable provision of journey- or product-specific emissions information. Whatever requirements were decided upon, multiple respondents stressed the need for cross-modal standardisation and independent regulation.

In terms of further obstacles to the reporting of journey- and product-specific information, respondents primarily cited administrative burdens and commercial sensitivities around the publication of data and practical difficulties (for example, to distinguish between emissions associated with a journey and emissions generated for entertainment services on cruise ships).

The role of carbon offsetting

Question 5

Do you agree that offsetting journeys could play a role in tackling emissions, while transport is decarbonised? Can you provide evidence supporting your view?

Respondents were nearly unanimous that the government’s focus should be on investing in incentivising the developments needed to make low and zero emission technology readily available to reduce in-use transport emissions.

However, respondents expressed a range of opinions on the potential role for offsetting, how it could be implemented and what alternatives could be pursued to incentivise change in the transport sector.

Over 60% of respondents considered that there could be a role for offsetting, as long as it is not prioritised over in-sector reductions.

This approach was particularly prominent among transport providers who suggested that offsetting could have a role to play in mitigating emissions associated with transport. However, this was not unanimous and responses from charities and non-governmental organisations (NGOs) were more vocal in emphasising the problems associated with offsetting.

Reasons for supporting the involvement of offsetting included:

• incentivising behavioural change by making consumers consider the environmental impact of their journey
• proposing market-based solutions as the most effective way to reduce emissions
• the necessity of offsetting while technological solutions develop

Many of the responses noted that offsetting should be accompanied by further measures aimed at reducing transport emissions and should only be utilised after efforts to avoid and reduce the emissions in question.

Reasons for opposing offsetting, particularly in any mandatory form, included:

• that it paves the way for a business-as-usual approach or distracts the focus away from reducing emissions at the source
• scientific objections relating to the movement of carbon from the lithosphere to the biosphere
• that offsetting schemes are ineffective in sequestering carbon
• that it could incentivise negative behavioural shift if not properly implemented
• that it would not get sufficient uptake

Offsetting criteria, reporting requirements and the design of any future offsetting scheme

Question 6

Do you agree with the offsetting principles outlined in the ‘good quality’ criteria within the UK’s Environmental reporting guidelines? Are there any further elements – for instance, with respect to geographic origin, eligible project types or the date the offset was generated – that should be included to further strengthen the environmental integrity of any future scheme?

The majority of respondents confirmed that they did agree with the offsetting principles outlined in the Environmental reporting guidelines.

Many welcomed the government’s support (as expressed in the Clean Growth Strategy) for a strengthened domestic carbon market, with high standards and fully verifiable carbon reductions with guarantees of additionality seen as central to this.

In line with comments around verifiable carbon reductions, respondents noted that transparency was essential in legitimising offset schemes. This principle included ensuring that any criteria were assisting in delivering offsets’ intended objective through monitoring and reporting.

Several responses stated that the ‘Good Quality Criteria’ as currently outlined are not sufficient. A regular theme was that carbon offsets need to be domestically sourced, although multiple respondents noted that there is currently limited scope in the domestic market.

Others suggested potential additions to the principles, including that the government should provide further guidance on what constitutes a ‘good offset’ and specific restrictions on the temporal lag time between the emission being generated and sequestered.

Several respondents did raise problems with offsets in response to this question. For example, one concern was the number of project emission credits available (2 billion were currently on the market under the Clean Development Mechanism). This abundance could lead to the price of carbon credits becoming lower to buy than the cost of implementing decarbonisation measures in the rail sector, thus disincentivising decarbonisation.

Question 7

How should any future carbon offsetting scheme correspond with existing schemes under which carbon emissions are accounted for, or reported, such as the Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) or the EU Emissions Trading System (EU ETS)?

Responses were largely, though not exclusively, concerned with aviation and, as such, referred principally to the CORSIA and the EU ETS.

Some responses maintained that a UK offsetting scheme would detract from, or contradict with, existing obligations.

If a new scheme were to be introduced, several responses referenced the need to consider emissions already offset by such schemes and obligations to avoid regulatory overlap. For example, by having voluntary offset products deduct the emissions saved by policy measures as part of the calculation of an individual’s emissions.

Another respondent raised concerns that a UK-specific scheme could harm UK businesses’ competitiveness, as any new scheme should be global rather than restricted to the national or regional level.

Others argued a voluntary UK scheme could complement existing schemes, although any new scheme would need to be set up with a clear explanation of any overlap to avoid duplication and consumer confusion.

Several respondents referred to the limitations and remit of CORSIA with a number arguing that, as CORSIA is focused on international flights, a UK scheme could focus on domestic aviation.

Other respondents maintained that, because CORSIA only included the emissions of International Civil Aviation Organization (ICAO) member countries, a potential UK scheme could focus on the growth in emissions from non-member countries.

A UK scheme could also close the gaps in current compliance regimes, according to one response, as it could focus on all emissions rather than solely on emissions above a specified baseline.

Several respondents also noted that an additional UK scheme could complement CORSIA as its focus could be on voluntary consumer action as opposed to obligations on businesses (as with CORSIA).

Others provided thoughts on how a potential new offsetting scheme should be linked to other emission regulatory frameworks.

On maritime, respondents felt that any scheme would have to meet the International Maritime Organization (IMO) Data Collection System reporting requirements and be debated and agreed with the IMO. One respondent also advised that any regional UK requirement on international shipping emissions could both conflict with IMO regulations and result in market distortion.

Question 8

What reporting requirements would be needed for any future scheme? How can these be designed so as to minimise additional burdens? Who should be in scope of requirements?

Several respondents emphasised that reporting should be mandatory, but views differed on what exactly this should include.

One respondent stated that reporting should be sufficiently detailed to give those purchasing a clear understanding of:

• what offset is being bought
• how the offset will be managed to meet the quality criteria
• how much of the fee will be used to purchase the offsets, and how any element of the fee not used to purchase offsets will be used
• as accurately as possible, the actual carbon impact of their journey, as well as any modal comparison

Another respondent stated that any offsetting scheme introduced for modes other than aviation must have the same strict reporting as CORSIA, with potential emissions unit programmes being subject to the same conditions and application processes.

On emission reporting requirements for any new scheme, multiple respondents stated that consumers should be provided with the average carbon dioxide (CO₂) emissions for their particular route. One respondent stated that to allow consumers to make informed decisions on greenhouse gas (GHG) impacts, this must include reporting on:

• fuel use
• fuel type
• tonnes lifted
• passengers moved in order to calculate modal averages

Responses were split over the feasibility of minimising the burden of reporting for any new scheme.

Those who suggested burdens could be minimised largely recommended streamlining potential reporting processes with existing processes. For example, by incorporating emissions and offset reporting into the annual earning and tax reporting requirements or the Streamlined Energy and Carbon Reporting (SECR) regulation.

Others felt it would not be possible to minimise the additional burden of reporting for any new scheme, as any additional reporting burdens would require further resource allocation, detracting from funds that could otherwise be spent on decarbonisation measures.

In terms of the scope of reporting requirements, one proposal was for all transport service providers to be included, with clarity required on what legal basis there may be for including non-UK airlines.

Other responses focused on the size of businesses included within scope. One recommendation was for regulations to apply to small and medium-sized enterprises (SMEs) and larger.

Question 9

How should any future carbon offsetting scheme be designed to support the objectives and requirements of the Paris Agreement, including the requirement to avoid the double-counting of emission reductions?

Respondents felt that one of the principal ways in which any future scheme could support the objectives and requirements of the Paris Agreement is through alignment with existing international offsetting and emissions trading schemes such as CORSIA and the EU ETS.

The majority of responses focused on how the scheme could be designed to avoid ‘double-counting’ – largely through alignment with existing international schemes such as CORSIA.

One respondent wrote that, in designing a UK scheme, a single, central record of total emissions offset would help in avoiding double counting. Several respondents stated that double-counting and double-claiming mechanisms must be given significant consideration, but it is impossible to be entirely aligned with the Paris Agreement until the negotiations and decisions on Article 6 are finalised.

Other respondents also recommended how the scheme could support the development of a strengthened UK carbon market, the importance of high quality offsets, and other specific design features.

Respondents referred to the potential for developing a domestic ‘gold standard’ for offsetting, which they claimed would provide standardisation and help avoid the double-counting, double-claiming and double-issuance, and the need for government oversight to ensure all schemes adhere to the UK’s existing Environmental reporting guidelines.

Multiple respondents also proposed specific features that should be incorporated into the design of any future UK offsetting scheme, including an ‘end date’ – at which transport would have to stop utilising offsetting – and the importance of accounting for small-scale transport operators who would require an intelligent, phased approach to decarbonising their fleet.

Some respondents also rejected the notion that an offsetting scheme could be designed in such a way as to support the objectives and requirements of the Paris Agreement.

Encouraging and/or mandating carbon offsetting in transport

Question 10

What examples currently exist to offset emissions from travel at the point where tickets are purchased? Can you provide examples of where this works well and where it does not?

Several respondents provided examples of transport providers currently offering consumers the chance to offset their emissions, most commonly in aviation. These included both point-of-purchase offsetting and, more commonly, the parallel purchase of offsets where consumers are directed to third parties, either to calculate their journey’s emissions or to independently offset their journeys.

Respondents offered a range of estimates for the percentage uptake of carbon offsets, although there was widespread agreement that uptake is low. Figures provided ranged from 0.1% to 3%. Reasons provided for low uptake included how the offset is offered and widespread scepticism and uncertainty about offset schemes.^{[footnote 1]}

To boost the low uptake of offsets among consumers, respondents suggested improved visibility or integration of the option to purchase offsets, as well as increased transparency about what the money will be spent on.

Some respondents also flagged concerns about carbon offsetting at the point of purchase. Several of these concerns centred around the cost and complexity of building offsets, and their purchase, into legacy IT systems. Another concern was that, in some circumstances, customers do not have sufficient access to transparent information around the offsets purchased.

Multiple respondents’ concern was that the cost of offsetting should not be passed on to the consumer for domestic public transport options (excluding aviation), with one stating that the “responsible commuter who has already abandoned the private car for public transport to work” should not be made to absorb the additional price of the offset.

Question 11

To what extent is there a role for government in increasing the uptake of/mandating ticket providers offering offsets?

Some respondents felt that the government could further improve consumer confidence by providing guidance on what constitutes a ‘good offset’.

Similarly, several respondents stressed that there is an important role for government in providing and regulating the framework for the scheme to operate in, potentially also including setting the price signal to ensure that offsetting is only a transitionary arrangement.

Several respondents felt that the government should mandate offsetting, with one stating that a voluntary system, or a code of practice, would not be successful.

Several responses suggested the government’s role should vary across modes, with ticket providers for carbon-intensive forms of travel being mandated to offer offsetting, while less damaging forms – principally public transport – should not.

Other respondents saw no role for government as regards offsetting. Two reasons given were that mandating public transport ticket providers to offer offsets could give the impression that public transport is a high-carbon option, or that it could create an additional burden on UK transport providers given the government’s jurisdiction would only extend to UK companies.

Respondents also provided further thoughts on the role for government in areas other than mandating offsetting. Several respondents felt that a new carbon taxation mechanism should be devised, with a ‘carbon price’ incorporated into every ticket price.

Another response suggested that the government’s role should include setting a progressively reducing cap for certain sectors – adjusted periodically in the light of emerging scientific evidence – with offsetting only being permitted to a certain limited extent within that cap. This would prevent any mode-specific reliance on offsetting in place of decarbonisation measures.

Question 12

More generally, how can the proportion of consumers taking up the option to offset emissions from their travel be maximised? Are there any other models for offsetting that should be considered?

Many respondents felt the government should capitalise on its tools and levers to increase awareness and understanding of offsetting schemes. This, in turn, would increase public confidence, a significant driver in further increasing consumer demand for ‘greener’ travel options.

Several respondents were explicit that such a drive should be government-led, while others suggested it should be either a joint effort between government and operators, or entirely led by industry.

In terms of other models, several respondents felt that an opt-out model would be the best way of improving uptake.

For pricing models, some respondents maintained that the price of offsetting should be included in the price of tickets, while another response suggested offering a flat offsetting cost.

Others suggested exploring the option of net positive offsetting, where passengers are given the option to offset more carbon than is produced by their journey, or specifically contributing to climate adaptation funds in developing countries in place of offsetting.

Question 13

What role could behavioural insights have in improving the uptake of carbon offsetting options by passengers?

Several respondents reflected on the role of behavioural insights in improving uptake of carbon offsetting. One regular theme was the ‘attitude-behaviour gap’. This is characterised by passengers concerned about climate change and the environmental impact of their transport choices, but who do not express this concern in their behaviour unless an alternative choice (such as a low- or zero-carbon form of travel) is presented as more attractive.

Several respondents felt that ‘nudges’ could be used to help overcome this attitude-behaviour gap as, where there are multiple choices, consumers will take the path of least resistance. It is, therefore, crucial to make sustainable options the easiest and most natural options available.

However, several respondents pointed to evidence that nudging may be insufficient^{[footnote 2]} and therefore outlined alternative behavioural insights perspectives. For example, some felt efforts would be better focused on ‘building a sense of climate citizenship’, ‘social practice theory’^{[footnote 3]} or studies promoting habit-breaking and habit-making strategies to achieve lasting behavioural change.

Respondents also provided recommendations for what research ought to be carried out to gain more valuable behavioural insights into increasing uptake of offsetting.

Suggestions included research on whether UK consumers are more likely to offset their emissions if the project funded is UK-based (even if more expensive), whether an opt-out approach would increase uptake and why attempts to promote shifts towards more sustainable transport choices have not always been successful.

Question 14

How could the mentioned potential issues of new carbon offsetting schemes be addressed? Are there any other issues in implementing the provision of carbon offsetting options at the ticket sale point? Please provide evidence.

One respondent raised the issue of daily and weekly price-capped ticketing on public transport services. In these instances, there is a cost limit that the passenger knows they will not exceed. The respondent’s concern was that with this type of ticket it would only be possible to calculate the carbon emissions of the journey once the ticket had expired, and not in advance.

Similarly, another respondent stated that special consideration must be given on how to offer carbon offsetting for season ticket purchasers.

Carbon offsetting for non-ticketed transport

Question 15

Do you have views or evidence on the provision of carbon emissions information for non-ticketed travel? Do you have views or evidence on offsetting non-ticketed travel?

Several responses provided examples of carbon offsetting for non-ticketed travel. These included requirements imposed on oil and gas companies to become carbon neutral, and voluntary investments these businesses make in carbon sequestration projects.

Several respondents were keen to emphasise that, if measures are introduced for offsetting of ticketed transport, there must be similar measures introduced for non-ticketed transport. This would help to avoid a negative modal shift away from public transport.

Several respondents argued that the option to offset, or increased emissions information, would be most effective if presented to drivers at the fuel pump. Respondents were divided on whether the provision of the option to offset should be mandatory, non-mandatory or follow an opt-out model.

Respondents were split over the use and efficacy of a ‘carbon tax’ – a price levy added to fuel – to offset emissions generated. Responses focused on the extent to which this would impact the decision-making of vehicle owners, who have already absorbed the principal costs of driving such as vehicle purchase and insurance.

One respondent stated that there is an opportunity for government to accelerate the adoption of low-carbon transport technologies, including electric vehicles, by mandating offsets for all new vehicles. The respondent argued for a 2% to 3% levy to be added to the price of new vehicles dependent on their emission levels. This private-sector carbon finance could then be used to drive significant emissions reductions.

As with many of the arguments already set out, one respondent argued that offsetting should not be offered for non-ticketed travel, including private motor vehicles, because it provides a form of “vindication or absolution” for their continued use.

Conclusions and next steps

The Department for Transport (DfT) is grateful to this call for evidence’s respondents for the level of detail provided in their responses and their engagement.

It is evident that there are a range of perspectives and competing priorities that must be accounted for when considering the role of government, industry and consumers as regards carbon offsetting in transport.

The evidence and feedback provided in response to this call for evidence has fed into the work of DfT to decarbonise the transport sector. Our sector-wide report Decarbonising transport: a better, greener Britain clarifies the government’s stance on the role of offsetting in reducing transport’s environmental impact.

Glossary

Attitude-behaviour gap

The ‘attitude-behaviour gap’ depicts the phenomenon in which consumers do not alter their behaviour and make more environmentally sustainable travel choices, despite stating their support for environmentally sustainable goals.

Carbon credits

Carbon credits are commonly understood to represent a tonne of CO₂ (or its equivalent in GHGs other than CO₂ that has been reduced or removed from the atmosphere and are typically generated by emission reduction projects.

Carbon Offsetting and Reduction Scheme for International Aviation

Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) is a global market-based measure designed to offset international CO₂ emissions to stabilise the levels of such emissions from 2020 onwards. CORSIA aims for carbon neutral growth in international aviation by requiring airlines to offset the growth of their emissions after 2020.

Clean Development Mechanism

The Clean Development Mechanism (CDM) is a mechanism under the Kyoto Protocol which, in accordance with Article 12 of the Kyoto Protocol, allows emission-reduction projects in developing countries to earn certified emission reduction credits, each equivalent to one tonne of carbon dioxide equivalent (tCO₂e).

The CDM allows industrialised countries with a GHG reduction commitment to invest in projects that reduce emissions in developing countries.

Gold Standard

Gold Standard is an independent, internationally recognised benchmark for carbon offset projects. Gold Standard was established in 2003 by World Wide Fund for Nature (WWF) and other international NGOs to ensure projects that reduced carbon emissions featured the highest levels of environmental integrity and also contributed to sustainable development.

International Civil Aviation Organization

The International Civil Aviation Organization (ICAO) is a UN specialised agency that works with the Convention on International Civil Aviation’s (Chicago Convention) 193 member states and industry groups to reach consensus on international civil aviation standards and policies in support of a safe, efficient, secure, economically sustainable and environmentally responsible civil aviation sector.

Passive carbon pool

The passive carbon pool – or ‘lithosphere’ – comprises carbon that has been buried underground for several million years, for example, as coal, oil or gas.

Carbon in this pool does not contribute to climate change as long as it is not transferred to the active carbon pool, which is made up of all carbon that circulates between the atmosphere, land and oceans.

Streamlined Energy and Carbon Reporting

The Streamlined Energy and Carbon Reporting (SECR) scheme launched in April 2019 and requires qualifying organisations to report energy and carbon emissions in their annual reporting.

1. James Higham, Scott A Cohen, Christina T Cavaliere, Arianne Reis, Wiebke Finkler, ‘Climate change, tourist air travel and radical emissions reduction’, Journal of Cleaner Production, volume 111, part B, 2016, pages 336-347. ↩

2. Corner A and Clarke J, 2017: Talking Climate: From Research to Practice in Public Engagement. ↩

3. DeVincenzo, Joshua L, 2019: Climate Change and Cognition: Towards a Pedagogy Journal of International Affairs, volume 73, number 1, pages 69 to 86. ↩