Carbon Balance

The carbon balance is an essential tool in the transition toward a low-emission economy. It provides an integrated quantification of the greenhouse gas (GHG) emissions generated by an organisation, product or territory, together with the removals or reductions achieved, to determine the net carbon outcome.

It is central to assessing the contribution to climate change, guiding decarbonisation strategies and demonstrating progress toward climate neutrality, one of the goals set by the Paris Agreement and the European Union's 2050 climate target.

Definition

A carbon balance is the result of subtracting the GHG emissions produced within a reference system (a company, product, city or country) from the natural or induced removals (sinks, offset projects, technological capture). When the balance reaches zero, with any residual emissions neutralised, the system can be considered climate-neutral.

Scope of the carbon balance

• Corporate: direct operations, purchased energy and value-chain emissions (Scopes 1, 2 and 3 of the GHG Protocol).
• Product level: the full life cycle (raw-material extraction, production, transport, use and end of life).
• Territorial or national: emissions inventories alongside forest and marine removals.
• Specific projects: construction, events and infrastructure.

Standards and reference frameworks

• GHG Protocol: the main global standard for emissions inventories.
• ISO 14064-1: specification for organisational GHG quantification and reporting.
• ISO 14067: focused on the product carbon footprint.
• ISO 14068-1:2023: the current carbon-neutrality standard, which replaced the withdrawn PAS 2060.
• Regulation (EU) 2021/1119 (European Climate Law): establishes EU climate neutrality by 2050.
• Spain's Climate Change and Energy Transition Law (Law 7/2021).

How to calculate the carbon balance

1. Identification of emissions: direct (Scope 1, on-site combustion and processes), indirect from energy (Scope 2, purchased electricity, heat or steam) and other indirect (Scope 3, transport, suppliers, product use and end of life).
2. Quantification: apply emission factors (for example, IPCC or national factors) using recognised calculation tools and databases.
3. Identification of removals and reductions: natural (forests, agricultural soils, wetlands), technological (carbon capture and storage) and certified offset projects.
4. Determination of the net balance: compare emissions against removals and define progressive reduction targets.

Benefits of a carbon balance

• Environmental: real emission reductions and protection of natural sinks.
• Economic: energy efficiency and lower energy and transport costs.
• Social: enhanced reputation and transparency for customers and investors.
• Strategic: readiness for future regulation and access to green finance.

Current challenges

• Measuring indirect emissions (Scope 3): often more than 70% of the total footprint.
• Reliable data across global supply chains.
• International standardisation: different methodologies can yield diverging results.
• Greenwashing risk when offsets replace internal reductions instead of complementing them.

Connection with the circular economy

The carbon balance is directly linked to the circular economy through low-impact product design, reuse and recycling that avoid emissions from resource extraction, renewable energy replacing fossil fuels, and logistics optimisation that reduces transport emissions.

Conclusion

The carbon balance is a strategic tool for measuring and managing the climate impact of organisations, products and territories. Implemented properly, it not only demonstrates climate-neutrality commitments but also boosts operational efficiency, innovation and transparency. At Manglai we help companies measure their carbon footprint and prepare their sustainability reporting. Discover how Manglai can help you.