Glossary entry

Net Negative

Definitions

Option 1 - Organisation

Net Negative means the Greenhouse Gases (GHGs) removed from the atmosphere [by a party] are greater than [its] GHG Emissions.

Option 2 - Product

Net Negative is a state where there is a net [sequestration] [removal] [absorption] effect from either production or total lifecycle impact of a product leading to negative Scope 1, 2 and 3 Emissions.

Option 3

Net Negative means that the aggregate of [a party’s]/[the [Company’s]] actions to reduce its GHG Emissions and remove them from the atmosphere exceeds its unabated GHG Emissions.

Option 4 - Activity/ technology

Net Negative is a state where the [activity/ technology] absorbs more Scope 1, 2 and 3 Emissions from the atmosphere than it emits.

For all options

The amount of Scope 1, 2 and 3 Emissions [sequestered] [removed from the atmosphere] [absorbed by the [processes] [activities]] must be measured using a standardised method of measuring and quantification to be agreed between the parties.

Related term

Net Negative Amount means the amount to be paid by the [party/ies] where Net Negative is achieved by [date].

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Drafting notes

We provide several options because ‘carbon negative’ and ‘net negative’ are not currently widely used in contracts.

TCLP’s definition of net negative ensures that all greenhouse gases (not just carbon dioxide) are covered in the definition.

Calculating net negative

There is not yet an agreed methodology for calculating if a product or activity is net negative in the same way as there is for Carbon Neutral.

Which definition you use will depend on the subject and purpose of the clause you are writing. Issues to consider include:

  • Do you require an organisation to be net negative?
  • Is an organisation committing to be net negative?
  • Do you require an organisation to only use net negative technology or to produce a net negative product?

On a global scale, removals of greenhouse gases should be consistent with the mitigation pathways that would limit global warming to 1.5°C, with little to no overshoot. See IPCC Special Report on Global Warming of 1.5 ºC, Summary for Policymakers, Part C Emission Pathways and System Transitions Consistent with 1.5°C Global Warming.

The technology or activity used to remove greenhouse gases from the atmosphere must have a degree of permanence. Protocols or rules relevant to the area and project also need to be developed and documented to ensure the quality of removals. Reliable and independent auditors should validate and verify the measurements.

Note that the term ‘carbon positive’ is used by some organisations instead of ‘carbon negative’ when describing their work to reduce their greenhouse gas emissions.

Application

Supply chain clauses, national climate laws, green leases (where the premises being leased are to be carbon negative), project finance documents (e.g. loan, guarantee and recourse agreements, engineering, procurement and construction contracts), policy documents.