Last updated:
April 11, 2024

Residual Emissions

What are Residual Emissions?

Residual emissions refer to the greenhouse gas (GHG) emissions that remain after all feasible measures to reduce a company's carbon footprint have been implemented. These are usually associated with activities that are essential to a company's operations, or with emissions sources for which there is currently no viable low-carbon alternative, but can also include avoidable emissions that have not been reduced.

Understanding the Nature of Residual Emissions

Residual emissions typically arise from sectors or processes where emission reduction is challenging due to current technological limitations or where the cost of reduction is prohibitively high. For example, certain industrial processes may release GHGs as part of chemical reactions that are integral to producing goods. Similarly, emissions from logistics and transportation may also be considered residual because even though some lower-emission solutions do exist, it is often not feasible to switch over to them at scale.

Strategies for Managing Residual Emissions

To address residual emissions, sustainability managers often turn to carbon credits and insetting projects. Carbon credits involve investing in external projects that reduce or remove emissions to neutralise residual emissions. Insetting, on the other hand, involves similar investments but within a company's own value chain or supply chain, aligning closely with the business's core activities and sustainability goals.

What is the difference between residual emissions, unavoidable emissions, and hard-to-abate emissions?

  • Residual Emissions: All emissions that remain after all feasible measures to reduce a company’s emissions have taken place.
  • Unavoidable Emissions: These are a subset of residual emissions that cannot be eliminated due to current technological and economic constraints. They are deemed "unavoidable" as long as no feasible alternative exists, despite efforts to minimise emissions elsewhere.
  • Hard-to-abate Emissions: This term refers to emissions from sectors where reducing carbon footprint is particularly challenging, such as heavy industry (steel and cement manufacturing) and long-haul transportation. Hard-to-abate emissions are a focus for innovation and investment in new technologies.

Importance in the Net Zero Journey

Checklist for preparing your net zero business case

Understanding and addressing residual emissions is crucial for sustainability managers aiming to meet net zero targets. While the focus should first be on reducing emissions as much as possible, residual emissions are inevitable, highlighting the need for measures such as carbon removal in order to neutralise them.

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