What does "carbon neutral" mean?

The IPCC (AR6 Working Group III glossary, 2022) describes carbon neutrality as the condition in which the human-caused carbon dioxide emissions linked to a subject are balanced by human-caused carbon dioxide removals. The subject can be a country, a company, a district, a product, a service or an event. The IPCC notes that it is often assessed over the full life cycle, including indirect (scope 3) emissions, and that some claims rely on offsets to balance what remains after the entity's own actions. It uses the separate term greenhouse gas neutrality when all gases, not only CO2, are balanced.

The main international standard for carbon neutrality claims is ISO 14068:2026, "Climate change management: Carbon neutrality", published by ISO in September 2026. It replaced ISO 14068-1:2023 (November 2023); ISO says only the number and title changed, not the content. According to ISO's description, it:

• covers organisations and products;
• requires the carbon footprint to be quantified, then reduced, and only then offset;
• follows a hierarchy that puts reductions and removals within the value chain ahead of offsetting;
• asks for a carbon neutrality management plan and for claims to be communicated transparently.

ISO 14068 (first published as ISO 14068-1) builds on the older British standard PAS 2060, and BSI, which published PAS 2060, now points users to the ISO standard.

The key point: a carbon neutral claim can be made while a company still emits a lot, as long as it measures its emissions, has a reduction plan and balances the rest with credits that meet the standard's rules. That is why the quality of those credits and the honesty of the plan matter so much.