A growing number of organizations, companies and even entire countries are talking about becoming carbon neutral. Most strategies aiming to achieve this have one thing in common: carbon offsetting practices. But what are these, and what is the role of carbon offsetting in achieving carbon neutrality?

Carbon offsetting is a process where an entity calculates and compensates its emissions by analyzing how its activities generate CO2 and investing in projects to balance this impact. Everything from heating to lighting and even storing emails emits CO2. Each emitter’s responsibility is to engage with energy-saving behaviours and to cut down unnecessary travel and transport whenever possible. Of course, travelling and shipping of products, goods or people hold the highest emissions toll together with manufacturing processes. However, even with the most efficient machinery and habits, companies will still be leaving a footprint. That is where offsetting comes in.

Once a company has calculated its carbon footprint, it can pay for initiatives that remove carbon or other greenhouse gases from the atmosphere to cancel its emissions. It can be done via planting trees that capture carbon dioxide, generating renewable energy or buying carbon credits.

A few years ago, emitters would offset by planting trees and sponsoring reforestation projects to capture and store carbon. Trees absorb CO2 as they grow and keep it, making forests one of the biggest carbon sinks. However, emitters can now buy carbon credits to establish ongoing programs of carbon offsetting for every action taken – for instance; customers can pay a carbon fee to offset their emissions when buying a plane ticket or shipping a product overseas. These carbon credits support a wide range of environmental projects such as re-planting the Amazon rainforest, supporting sustainable agriculture or providing developing countries with renewable energy.

Most interestingly, carbon credits offer something that conventional tree-planting initiatives do not. Investment in reforestation projects and forest preservation focuses on reducing and absorbing carbon. While these are highly needed initiatives, they offset emissions by storing them in carbon sinks. On the other side, carbon credits are also awarded for schemes that reduce fossil fuel consumption, such as investing in wind farms or regenerative agriculture. In theory, both activities cancel off the impact of carbon emissions, yet planting trees only compensates by subtracting CO2 while some carbon credit projects actively encourage a shift to less fossil fuel consumption. On top of this, if we stay true to the real meaning of sustainability, we must remember that even carbon sinks (i.e., rainforests) have storage limits – they cannot store forever. Trusting our rainforests to absorb our emissions permanently is not a plausible strategy to become green.

At Modulex, we have been focusing on energy-saving habits for years now. We have incorporated efficient machinery in our factory in Billund, optimized our production lines and shifted to energy-efficient LED lighting. In 2018, Modulex Billund adopted the LEAN methodology further to optimize our resources, space, and energy. LEAN has shown us that saving energy and resources is not a matter of small changes. Becoming an energy-efficient business is a transition that affects the foundations and philosophy of how a company operates and requires a long-term perspective and commitment.

At Modulex, we also try to find new ways to compensate for the impact of our emissions. Our factory building in Billund is owned by the KIRKBI Group, which has invested in two offshore wind farms and is responsible for our energy supply. These generate enough renewable energy to meet KIRKBI’s total energy consumption, including our Billund factory. In turn, the electric power consumption in our factory in Billund is 100 % CO2 neutral.

Despite the potential of such schemes, carbon offsetting cannot be a substitute for preventing emissions. Transitioning to a low-carbon economy is a much more urgent project, and it should not be shadowed by offsetting initiatives suggesting that it can erase emissions. While carbon offsetting holds considerable potential to help spur a transition to greener economies, we must not forget that mitigating and preventing emissions should always be prioritized over offsetting them. In the same way that becoming more efficient at Modulex required a bottom-up shift in philosophy and organization, achieving a truly green transition requires us to focus first on saving energy and emissions before thinking of ways to balance them.


Erik Sørensen Ruiz

Environmental and Partnership Manager

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