Insetting is often presented as the better version of offsetting: closer to home, more tangible, harder to criticise. That is partly true. But insetting and offsetting answer different questions, they are accounted for differently, and a project near your supply chain is not automatically an inset.
Carbon insetting finances reductions or removals inside your own value chain; carbon offsetting finances projects outside it. Insetting can lower your reported Scope 3 emissions if it is traceable and measured; offsets are reported separately. This article explains the difference, the grey zone in between, what changed in 2026 and when each fits.
The difference in one table
Insetting | Offsetting | |
|---|---|---|
Where the project is | in your value chain: your suppliers, your sourcing regions, your logistics | anywhere outside your value chain |
What it changes | your own Scope 3 emissions | nothing in your inventory; it finances climate action elsewhere |
How it is reported | as a reduction in the affected Scope 3 category, with evidence | separately from the inventory, with retirement evidence |
Evidence needed | traceability to your purchases, measured results | a verified, retired carbon credit |
Typical examples | supplier switch to renewable heat, regenerative farming at your growers, low-carbon materials | forest protection, cookstoves, biochar, direct air capture |
Counts towards SBTi targets | yes, if it shows up in the inventory | no |
The International Platform for Insetting, now part of the WBCSD, describes insetting as investing in climate and nature action within a company’s own value chain: in the farms, landscapes and communities it sources from (WBCSD).
Why the accounting differs
Your greenhouse gas inventory measures the emissions linked to what you buy, make and sell. If you help a supplier cut the emissions of the products you buy, the emission factor of those purchases falls, and so does your Scope 3. That is a real reduction in your footprint.
An offset works differently. It finances a reduction or removal somewhere unconnected to your products. Your inventory stays the same, and under the GHG Protocol the credit is reported beside it. SBTi’s Corporate Net-Zero Standard V2.0 measures target progress on the physical inventory only, so offsets never count towards a reduction target (Scope 3 and carbon credits).
The grey zone: near your value chain is not in it
Many projects sit in between. A fashion brand funds reforestation in the region where its cotton grows; a coffee company supports cookstoves in villages near its growers. These projects are close to the value chain and often make a better story, but if they do not change the emissions of the products you buy, they are offsets.
O My Bag, an Amsterdam bag brand that manufactures in India, is a good example of doing this well. It supports verified carbon projects in India, close to where its chain begins, for their social and ecological benefits, and it treats them as responsibility for emissions it cannot yet reduce, kept outside its own footprint calculation.
The test is simple: does the project change an emission factor or an activity in your inventory? If yes, it can be an inset, with evidence. If no, it is an offset, however close it is.
Tip from Bernard de Wit, Founder of Regreener: “Before you call something an inset, ask your sustainability team which number in next year’s Scope 3 will be lower because of it. If nobody can point to a category and a supplier, call it what it is: a well-chosen contribution near your supply chain. That is still worth doing, and much easier to defend.”
What changed in 2026
Certification for value-chain projects. On 15 September 2026, Verra launched its Scope 3 Standard Program. It certifies climate projects inside corporate value chains and issues Scope 3 Units linked to the products they affect, giving insetting a verification route similar to carbon credits (Verra).
Claims rules. From 27 September 2026, EU consumer law bans claims that a product is carbon neutral or has a reduced impact because of offsetting (EmpCo carbon neutral claim ban). Claims based on real reductions in your own value chain are a different case, but they still have to be specific and verifiable. Insetting does not create a loophole for vague claims.
Scope 3 gap claims. The VCMI’s Scope 3 Action Code lets companies on track with scope 1 and 2 targets use high-quality credits to cover part of a temporary scope 3 gap, up to 25% of their scope 3 trajectory, until 2040. That is an offset-based claim, made next to insetting work rather than replacing it.
When to use which
Use insetting when you have significant Scope 3 emissions in a few supplier categories, a relationship with those suppliers, and the ability to measure the change. It is slower to set up and harder to verify, but it lowers your own footprint and strengthens your supply chain.
Use offsetting for emissions you cannot yet reduce, for contribution beyond your value chain and, from 2035, for SBTi’s removal requirement. It is faster, can be bought to a quality policy today, and does not depend on supplier data.
Most companies need both, in that order of priority. Our free budget and strategy planner helps size the offset part next to your reduction plan.
“Insetting is reduction work with a carbon price attached, and it belongs in the reduction plan. Offsetting is what you do about the emissions that remain while that plan runs. Both are useful. Problems start when a company presents one as the other.”
Bernard de Wit, Founder of Regreener
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