The definition of carbon neutral refers to a specific product, service, activity or organisation (i.e. the “subject” of the carbon neutrality claim), whose carbon footprint is fully offset by purchasing high quality certified carbon credits, which must be equivalent to the total GHG emissions released into atmosphere.
Carbon neutrality may be achieved through offsetting using carbon reduction projects, rather than through more expensive carbon removals for “hard-to-decarbonise” residual CO2 only, and as such is somehow considered to be less ambitious than achieving “net zero carbon” status, which usually is not a short term goal and involves setting a thorough decarbonisation trajectory with science-based specific CO2 reduction targets to work towards over a number of years from the baseline emissions in line with the 1.5°C pathway (Paris Agreement).
Typically carbon-neutral projects include (directly or indirectly, through energy procurement) renewable energy generation e.g. solar PV and wind. The associated costs are limited (i.e. up to £10/tonne) compared to the net zero, where the cost per tonne may rise up to £100.