Frequently asked questions

Some of the most common questions about us are shown below. If you can't find the answer to your question, please get in touch at info@carbonretirement.com.

How is Carbon Retirement different to other types of offsetting?

Traditional offsetting works by investing in projects in the developing world that reduce emissions or absorb greenhouse gas from the atmosphere. Typical projects include tree planting (the most common type of project), renewable energy, biofuel cultivation and improving building efficiency.

Carbon Retirement is a fundamentally different approach. It works by buying heavy industry's rights to release greenhouse gases. Our page on how we are different to other types of offsetting explains more.

Can I pay in a currency other than British Pounds?

If you use a different currency, it is very likely that your credit or debit card will allow you to pay in British Pound Sterling. Just follow our normal process. The amount you pay in your currency will depend on the current exchange rate.

What is the EU Emission Trading Scheme?"

The EU Emission Trading Scheme, or the EU ETS, is a system that European governments use to support their commitments to reducing greenhouse gas emissions. It limits carbon dioxide emissions from a range of industries, including power generation, offshore extraction, cement production, iron and steel, paper and pulp and chemical processing. Carbon Retirement buys credits out of the EU ETS. You can read more about it on out our page about the EU ETS.

What is an EUA?

EU Emission Allowances, or EUAs, are the credits that are allocated to the companies covered by the EU Emission Trading Scheme. They are tradable. Carbon Retirement buys and retires EUAs.

How is the price calculated?

We estimate today's market price of EUAs and add the following elements to it:

Estimate of market price for one Phase 2 EUA £0.00
+ our admin fee* (0%) £0.00
+ spread fee** (0%) £0.00
= price £0.00

*Admin fee. The admin fee is the portion of your money that we use to pay the company's costs. It is much smaller than the admin fee of a typical offsetting company.

** Spread fee. The 'spread fee' is a small fee that we add to reflect the risk of changing market prices. We combine your order with other customers before making a lump purchase of EUAs, to keep the transaction costs down. If the market price has gone up in the meantime, we risk not being able to purchase your full order. The small 'spread fee' covers this risk. We don't make any margin on the price of EUAs, and any money remaining is reserved for buying and retiring further EUAs.

Why does the price of EUAs change?

Fundamentally, the price of EUAs is determined by the perceived cost of complying with the reduction required by the EU Emission Trading Scheme. During trading, the market participants' views of the cost of achieving the reduction can change.

If, for example, today's price of carbon is £15 per tonne and a new technology is discovered that could reduce emissions in one of the industries covered by the scheme for £10 per tonne, the price of EUAs would fall as that industry invests in the new technology and sells its surplus EUAs in the market.

The energy market is an important driver of the EUA price. When demand for energy is high, demand for EUAs to cover the generation rises too. Burning coal produces particularly large quantities of greenhouse gases, so the price of EUAs is sensitive to demand for coal.

Where do you buy EUAs from?

We purchase EUAs either from an exchange, a market broker a or regulated participant in the market. As EUAs are freely tradable between market participants, the source of an EUA does not affect the environmental benefit of retiring it.

Why do different offsetting companies charge different amounts to offset the same thing?

The main reason is that there are different ways to reduce emissions and they cost different amounts. Ideally, an offset would be both cheap and reliable, but in reality it doesn't usually work like that. Our price reflects the real cost of reducing industrial emissions in Europe. While this is a very accurate and reliable way to offset carbon emissions, it is often more expensive per tonne than projects in the developing world.

The other reason why costs might look different is that companies calculate the quantity of offsets you need to buy for the same activity in different ways. Our calculator uses data and calculation methodologies recommended by Defra (the UK environment department).

Project-based offsets often have social benefits. Are there any social benefits to taking EUAs out of circulation?

We don't think we're fence-sitting here by saying sort of.

We facilitate emission reductions in Europe, and we're dealing with major energy-intensive industries, so there's less opportunity for helping out communities at the same time.

The social benefits of offsetting projects can be hard to measure and we need to remember that our aim here is to reduce emissions. Globally, emission reduction and mitigation of climate change will have plenty of social benefits. We're focused on making sure the emission reductions happen.

How does your calculator work?

Once you have entered data into the calculator, we multiply it by emissions factors. For example, if you input that you have driven a certain number of miles in a large petrol car, we multiply that distance by a factor showing the greenhouse gases released for each mile.

These factors and the methodology behind the calculator follow the UK government's guidelines for calculating a carbon footprint.

If you have used a calculator on another website, you can offset the footprint that it came up with by entering it into our website.

Could Carbon Retirement end up buying all the credits, leaving industry with no rights to pollute?

While Carbon Retirement aims to have a significant effect on the carbon credit market, the market is sufficiently large that we do not anticipate retiring as many credits as the power generation industry, for example, holds.

There were some difficulties with Phase 1. Are these likely to be repeated?

No. The price of Phase 1 EUAs dropped when analysts realised in spring 2006 that European governments had allocated so many allowances that the regulated industries did not have to make reductions. This was because the allocation plans were based on estimates of emissions, rather than audited measurements.

The allocation plans behind Phase 2 are based on extensive and credible measurement of the industries' emissions, and the industries within the scheme will have to make emission reductions. This is why the price of Phase 2 credits remained strong when the Phase 1 credits collapsed. Independent analysts have recently assessed the allocation for Phase 2 and forecast that credits will be scarce.

What's the difference between a Certified Emission Reduction (CER) and an EU Emission Allowance (EUA)?

EUAs are electronic certificates distributed to industry by European governments. Each represents the right to release one tonne of carbon dioxide into the atmosphere. There are a fixed number of EUAs. Carbon Retirement buys EUAs.

CERs are awarded by the United Nations to projects in the developing world that reduce emissions. Companies in the EU Emission Trading Scheme are allowed to offset a small proportion of their emissions using CERs.

There are a range of advantages that retirement of EUAs holds over other types of offsetting.

Where can I go to find out more about climate change and the EU Emission Trading Scheme?

For more information about climate change, visit the United Nations Environment Programme's pages on climate change or the BBC's site on climate change.

For more information about the Kyoto Protocol, visit the Kyoto Protocol pages at the UN Framework Convention on Climate Change.

For more information about the EU Emission Trading Scheme, visit the European Commission's site on the EU ETS or the Department for Environment, Food and Rural Affairs' page on the EU ETS.

Offset my...


Flights

Driving

House

Known amount

Use the options above to work out how many tonnes of carbon you want to retire. You can calculate the emissions associated with flights, driving, and the energy you use at home. If you already know how many tonnes you want to retire, you can enter it directly.

The calculator follows recognised government guidelines. It uses data published by the Department for Environment, Food and Rural Affairs.