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Are Car Rental Carbon Offset Programs a Green Deal?

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Concerned about the environment? You may worry about the carbon footprint of your rental car. Several companies offer car rental carbon offset programs that let you counteract your vehicle’s carbon emissions. They’re billed as a way to make up for your rental car’s “carbon footprint.”

But is this green new deal actually no deal for renters? Carbon offsets are essentially a trade. When you buy an offset, you fund projects that reduce greenhouse gas (GHG) emissions. But your car is still emitting just as much pollution.

How Car Rental Carbon Offset Programs Work

Enterprise, Alamo and National Carbon Offset

Since 2008, Enterprise Holdings—which owns Alamo, Enterprise and National—has offered CO2 Offsets on rentals. It partners with TerraPass. The three companies offer a carbon offset for $1.25 per rental for 30 days. The fee for a four-hour rental is the same as for a four-week rental. All proceeds go to TerraPass to fund sustainability projects, and Enterprise even offers a match. Alamo and National do not match the contribution.

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Hertz Carbon Offset

In 2017, The Hertz Corp. also began offering a carbon offset program exclusively to corporate customers with the opportunity to reduce the carbon footprints associated with vehicle rentals through the purchase of carbon offsets. Hertz has also partnered with TerraPass. The partnership allows Hertz to provide carbon emission reporting to customers. The report feeds directly into a personalized platform, which allows corporate customers to then purchase carbon offsets, if desired, to neutralize their environmental impact.

The Downsides of Car Rental Carbon Offset Programs

While we’re all for doing our part to combat climate change, we find greater value contributing in other ways that make more sense to us. Like all other add-ons offered by rental car companies, carbon offsets aren’t necessarily a great green deal for renters.

First, it’s likely you’re paying additional taxes and fees on top of the carbon offset charge. Many local governments and airports tax all revenue collected by a rental car company for add-on charges, including contributions to environmental causes. So the $1.25 carbon offset charge per rental has tax on top.

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Second, we question whether contributing to TerraPass is the most effective way to counteract your carbon emissions. Terrapass is a for-profit company that’s part of the publicly-held utility called Just Energy Group. We don’t doubt that it does good work, but if you really wanted to help the environment, you could choose to rent a low-emissions hybrid car.

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