Carbon Removals vs Avoidance Credits: What Buyers Need to Know

If you are buying carbon credits for your business, one of the first decisions you will face is whether to purchase removal credits or avoidance credits. These two categories represent fundamentally different approaches to climate action, and understanding the distinction is essential for making credible, defensible purchasing decisions.

This article explains what each type is, how they differ in quality and permanence, and how businesses should think about them within a broader carbon strategy.

What Are Carbon Removal Credits?

Carbon removal credits represent the actual removal of carbon dioxide from the atmosphere. The carbon that was already in the air is captured and stored, either through natural processes or technological solutions. Examples of removal projects include afforestation and reforestation, where trees absorb CO2 as they grow; biochar, where organic waste is converted into a stable carbon-rich material and added to soil; direct air capture (DAC), where machines pull CO2 directly from the atmosphere and store it underground; and enhanced rock weathering, where crushed minerals absorb CO2 through natural chemical reactions.

Removal credits are increasingly seen as the gold standard for net-zero strategies because they address carbon that is already in the atmosphere rather than simply preventing new emissions.

What Are Carbon Avoidance Credits?

Avoidance credits represent emissions that would have occurred but were prevented. The carbon was never released into the atmosphere because of the project's intervention. Examples include renewable energy projects that replace fossil fuel power generation, cookstove projects that reduce wood or charcoal burning, methane capture from landfills or agricultural operations, and energy efficiency upgrades in industrial processes.

Avoidance credits have been the dominant type in the voluntary carbon market for over a decade. They are generally cheaper to produce and more widely available than removal credits.

Key Differences Between Removal and Avoidance Credits

The fundamental difference is direction. Removal credits take carbon out of the atmosphere. Avoidance credits prevent carbon from entering the atmosphere. Both have climate value, but they serve different purposes in a company's strategy.

Permanence is another important distinction. Technology-based removals like direct air capture with geological storage offer near-permanent carbon storage. Nature-based removals like forestry carry reversal risks from fire, disease, or land-use change. Avoidance credits do not store carbon at all; they simply prevent it from being released.

Price is also a factor. Avoidance credits typically cost between $5 and $30 per tonne, while nature-based removal credits range from $15 to $50 per tonne, and technology-based removals like DAC can exceed $200 per tonne. The price reflects the cost of producing the credit and, to some extent, the quality and permanence of the outcome.

Which Type Should Your Business Buy?

The answer depends on your goals, budget, and the claims you want to make. If you are working toward a Science Based Targets initiative (SBTi) net-zero target, you will eventually need removal credits to neutralise residual emissions. SBTi explicitly requires removals, not avoidance credits, for the final neutralisation step. If you are at an earlier stage and want to take meaningful climate action while reducing your own emissions, a mix of high-quality avoidance credits and removal credits can be appropriate.

The most credible approach is a portfolio strategy: invest in your own emission reductions first, use avoidance credits to compensate for emissions you cannot yet reduce, and begin building exposure to removal credits as they become more available and affordable. This shows genuine progress rather than simply buying your way to a claim.

Common Mistakes Buyers Make

One common mistake is assuming all avoidance credits are low quality. Many avoidance projects deliver genuine, verified emission reductions with strong co-benefits. The quality depends on the specific project, methodology, and verification, not the category alone. Another mistake is assuming removal credits are automatically high quality. A poorly managed forestry project with weak permanence guarantees is not necessarily better than a rigorously verified renewable energy project.

The most important thing is to evaluate each credit on its individual merits: additionality, permanence, verification standard, and co-benefits, regardless of whether it is categorised as removal or avoidance.

How Csquare Carbon Helps You Choose

At Csquare Carbon, we help businesses build carbon credit portfolios that balance cost, quality, and strategic alignment. Whether you need nature-based removal credits from our afforestation projects or verified avoidance credits from trusted project partners, we guide you through the selection process with full transparency. Talk to a Csquare Carbon advisor to build a credit portfolio that matches your climate goals.