As companies work towards climate targets, two terms come up often: offsetting and insetting. They are sometimes used as if they mean the same thing. They don't, and the difference matters for anyone who grows the products those companies buy.
What is offsetting?
Offsetting means paying for emission reductions or removals outside a company's own value chain, usually by buying carbon credits. A company might fund a project in another industry or another country and count the result against its own emissions. Its own footprint, including the emissions attached to what it buys, stays where it was.
Offsets still have a role. Many companies use them for emissions they cannot yet reduce, and well-designed projects can deliver real benefits. The concern is when offsets are used instead of reducing emissions in a company's own operations and supply chain.
What is insetting?
Insetting means acting inside the company's own supply chain: working with its suppliers to reduce emissions, or increase removals, in the production of the goods it actually buys. If it works, it lowers the emissions attached to those goods, and that shows up in the company's Scope 3 inventory. (New to Scope 3? See Scope 3 emissions in agriculture, explained.)
The World Economic Forum describes insetting as "doing more good rather than doing less bad within a value chain", and cautions that offsetting "can't be considered a substitute for direct emissions reductions" (Bhatia, 2022).
Insetting vs offsetting at a glance
- Where it happens: offsetting outside the value chain; insetting inside the company's own supply shed
- What it changes: offsetting leaves the inventory unchanged; insetting can lower the emissions of purchased goods
- Who benefits: offsetting funds unrelated projects; insetting can fund the company's own suppliers
The criticism, and why it matters
Insetting has critics. NewClimate Institute has called it "offsetting in disguise", pointing to weak methodologies, double counting, and the difficulty of proving that soil carbon stays stored (Civillini, 2023). Those concerns are fair, and they set the bar for any credible programme.
The rules are tightening to meet them. The GHG Protocol's Land Sector and Removals Standard takes effect on 1 January 2027 and is the first GHG Protocol standard to include traceability requirements for Scope 3 emissions (GHG Protocol, 2026). The Science Based Targets initiative will require it from the same date for companies setting land-sector targets (SBTi, 2026).
What a credible inset needs
- A clear baseline, measured before practices change
- A defined supply shed, so results can be traced to the buyer's actual supply
- Independent verification
- A result that is counted once, by one party
Why farmers should care
Done properly, insetting gives growers something offsetting never could: a buyer with a direct reason to invest in their soil, their practices and their measurement. Examples are emerging in Australia, including a wool industry pilot described in where a wool sweater's carbon footprint comes from.
It also means the evidence has to be good. For anyone developing farm inputs, including DuraTerra, that is a strong argument for measuring first and claiming second.
Frequently asked questions
What is the difference between insetting and offsetting?
Offsetting funds emission reductions outside a company's value chain. Insetting funds reductions or removals within the company's own supply chain, which can lower the emissions of the goods it buys.
Is insetting better than offsetting?
It can address a company's own footprint more directly, but critics warn of weak methods and double counting. Credibility depends on baselines, traceability, verification and counting results once.
What rules apply to insetting from 2027?
The GHG Protocol's Land Sector and Removals Standard takes effect on 1 January 2027, including traceability requirements for Scope 3 emissions, and SBTi will require it for land-sector targets from the same date.
References
- Bhatia (2022) 'Carbon insetting vs offsetting: an explainer', World Economic Forum. Available at: https://www.weforum.org/stories/climate-action/carbon-insetting-vs-offsetting-an-explainer/ (Accessed: 20 October 2026).
- Civillini, M. (2023) 'Corporations push "insetting" as new offsetting, but report claims it is even worse', Climate Home News, 20 February. Available at: https://www.climatechangenews.com/2023/02/20/corporations-push-insetting-as-new-offsetting-but-report-claims-it-is-even-worse/ (Accessed: 20 October 2026).
- GHG Protocol (2026) GHG Protocol launches its first-ever global standard for corporate accounting of land-sector emissions and removals. Press release, 30 January. Available at: https://ghgprotocol.org/ (Accessed: 20 October 2026).
- SBTi (2026) 'What companies need to know: SBTi updates the Forest, Land and Agriculture target-setting guidance and the GHG Protocol's Land Sector and Removals Standard', 19 March. Available at: https://sciencebasedtargets.org/blog/what-companies-need-to-know-sbti-updates-the-forest-land-and-agriculture-target-setting-guidance-and-the-ghg-protocols-land-sector-removals-standard (Accessed: 20 October 2026).