Net zero: Definition

Updated 2026-11-02 · 2 min read · By the akar.earth specialist team

What does net zero mean? The balance of emissions and removals for countries and companies, the role of carbon removals, and how Indonesia frames its target.

Net zero is the state in which greenhouse gas emissions released into the atmosphere are balanced by an equal amount removed, so the net effect is zero. For companies under frameworks such as SBTi, it means cutting emissions deeply, typically by around 90% across the value chain, and neutralising only the small residual with permanent carbon removals.

Why it matters

Net zero is the end goal of the Paris Agreement’s long-term temperature target and of most corporate and national climate strategies. It drives long-term demand for carbon removals, including forest and agroforestry removals, as well as engineered ones. It also sets limits: avoidance credits do not count toward neutralisation in most net zero standards.

How it is used

• Companies: set near-term targets, a long-term reduction target and a net zero year, then plan removals for residual emissions. See SBTi.
• Countries: set net zero years in long-term strategies and update NDCs on the way.
• Credits: high-quality removals can neutralise residuals; credits used before net zero count as contributions beyond the value chain. See removals vs avoidance.

Indonesia and Southeast Asia angle

Indonesia has set a net zero goal for 2060 or sooner. Its forest and land sector is central to that path through the FOLU Net Sink 2030 target, which aims for the sector to absorb more than it emits. Domestic carbon pricing under Perpres 110/2025 and IDXCarbon supports this. See Indonesia’s NDC.

Countries and companies use the term differently. A national net zero target covers all sectors in its territory, while a corporate one covers the company’s own emissions and value chain. Both rely on forests, but credits cannot be counted in both places without corresponding adjustments, which links net zero to Article 6 accounting.

Common mistakes

• Claiming net zero today by buying cheap avoidance credits.
• Ignoring Scope 3 when declaring a net zero target.
• Treating short-lived storage as equivalent to permanent removals without addressing reversal risk.

More on the climate finance hub.