Carbon dioxide removal has become the gold standard in today’s carbon markets. Buyers, investors and policymakers see carbon removal as a more rigorous alternative to traditional offsets. But in the rush to meet demand, many registries have started conflating emission-reduction projects with carbon removal. That confusion risks undermining trust in the very market meant to build credibility.
The difference between a reduction and a removal is not a technicality. It determines whether a project slows the accumulation of CO₂ in the atmosphere or actually reverses it by pulling CO₂ out of the atmosphere. Treating them as the same thing has led to credits that look equivalent on paper but have entirely different atmospheric outcomes.
In my work leading Absolute Climate, where we evaluate carbon management projects against an independent, universal standard, I frequently encounter the accounting loopholes that lead to impact conflation. After nearly a decade in this field, it is clear to me that inconsistent definitions are distorting credit quality. Without strict science-based criteria, the market risks selling buyers on outcomes that don’t match reality.
The confusion starts with registries
The problem is already visible in the market. On the Puro Registry, both Climeworks’s direct air capture project and Red Trail Energy’s ethanol plant are categorized as carbon removal projects. Climeworks removes CO₂ directly from ambient air. In comparison, Red Trail captures some of the emissions from its ethanol production process while continuing to release significant amounts of CO₂.
From 2023 to 2025, Red Trail Energy emitted more than 300,000 tons of CO₂ and captured about 220,000 tons, leaving tens of thousands of tons still entering the atmosphere. Over a similar timeframe, Climeworks’ Orca facility emitted roughly 288 tons while removing and storing more than 1,100 tons. Both received carbon removal credits, yet one project emitted carbon while the other eliminated it.
The issue isn’t unique to Puro. Other registries use similar accounting frameworks that allow industrial capture projects to be labeled as removals even though the facilities themselves continue to emit CO₂. For example, Isometric has announced their intention to credit waste-to-energy facilities with attached carbon capture systems as carbon dioxide removal, despite the fact that trash incineration will increase the amount of CO₂ in the atmosphere rather than remove it.
Reduction vs. removal
A reduction project prevents new CO₂ from entering the atmosphere. For example, a factory with a carbon capture system will emit fewer emissions relative to the same factory without the equipment installed.
A removal project extracts CO₂ that is already in the atmosphere and stores it durably. Examples include reforestation, direct air capture and biomass carbon removal that fully accounts for embodied and process emissions.
The Intergovernmental Panel on Climate Change, or IPCC, defines net-negative emissions as situations where more greenhouse gases are removed from the atmosphere than emitted into it. By that standard, many projects currently labeled as removals do not qualify.
An accounting loophole
The confusion comes down to how registries draw the “system boundary” around a project. In the case of Red Trail Energy, Puro’s Geologically Stored Carbon methodology allows the project to exclude all emissions from the ethanol plant itself, arguing that those emissions would have occurred anyway. Under that accounting, the project looks net-negative.
But the logic breaks down under scrutiny. If the plant’s emissions are excluded because it would have operated anyway, then the project also cannot claim credit for the carbon uptake from growing the corn feedstock for the ethanol plant, since that too would have happened anyway. The project does not cause any additional removal of CO₂ from the atmosphere. It simply prevents a portion of industrial emissions from being released.
The result is a reduction project mislabeled as a removal project. Reductions cut ongoing emissions. Removals offset what remains. Confusing the two creates accounting errors that ripple through the market.
The cost of getting it wrong
Mislabeling reductions as removals has real consequences. For buyers, it creates credibility and compliance risks. Companies purchasing “removal” credits that are not actually removing carbon risk overstating their climate impact. That mislabeling exposes them to accusations of greenwashing, potential legal scrutiny and reputational damage. As accounting rules evolve, companies that cannot substantiate removal claims could also face regulatory penalties.
For innovators, mislabeling distorts market incentives. True carbon removal technologies remain costly. Reduction projects, which typically use concentrated CO₂ streams from industrial sources, are much cheaper. When both types of credits are treated as equivalent, buyers naturally choose the lower-cost option. That distortion directs capital away from the removal technologies the world will ultimately need to balance the carbon budget.
For the market as a whole, the conflation of reduction and removal risks another credibility crisis. The offset market lost public trust after years of inflated claims and questionable verification. If the carbon removal market repeats those mistakes, it could face a similar collapse in confidence just as it begins to scale.
Building a credible carbon market
The solution is not complicated. It requires clarity, consistency and honesty about what each kind of credit represents. Registries should disclose the full lifecycle emissions for every project and explicitly label credits as either reductions or removals. If a project’s primary activity continues to emit CO₂, it belongs in the reduction category.
Buyers should require transparency on how projects account for emissions across their entire supply chain. Purchasing decisions should be based on whether a project truly removes carbon from the atmosphere or simply prevents additional emissions. Policymakers should standardize definitions across programs, aligning with the IPCC’s clear guidance on net-negative emissions. Consistency will help ensure that markets grow on a solid, credible foundation.
Reductions and removals both matter. Reductions will help industries lower their emissions as fast as possible. Removals will balance what cannot be avoided and eventually draw atmospheric CO₂ levels down. But they are not interchangeable.
The carbon removal industry has an opportunity to learn from the past. Clearer definitions and honest accounting will protect buyers, attract investment to the right technologies and build the trust that carbon markets need to deliver real impact.
Carbon markets aren’t fundamentally broken. They simply need precision. Getting clear about what counts as a reduction and what counts as a removal is the first step toward a market that delivers what it promises: measurable, verifiable progress toward net zero.
Editor’s note: ImpactAlpha reached out to the Puro Registry for comment but did not receive a response before publication.
Peter Minor is the co-founder and CEO of Absolute Climate, a company building a universal framework to ensure carbon management claims match climate outcomes. By applying consistent, science-based rigor to project evaluation, Absolute Climate works to verify the true value of climate impacts for buyers and developers.
Guest posts on ImpactAlpha represent the opinions of their authors and do not necessarily reflect the views of ImpactAlpha.
