The Carbon Border Adjustment Mechanism (CBAM)
10 min
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In this article we’ll explore what the CBAM is, why it’s been created, and what importers need to know ahead of its introduction.
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What Are Scope 1 Emissions?
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Global warming is taking the world by storm, in both our personal lives as well as the business world.
As the movement to join the net-zero movement to reduce emissions by 2050 grows exponentially, more and more companies are becoming interested in carbon accounting to help them reduce their emissions and create a better future for the environment.
Carbon accounting is broken down into three well-known categories called, “scopes”.
👉 What are scope 1 emissions, and are they different from scope 2 and scope 3 emissions?
What are scope 1 emissions?
Scope 1 emissions, definition
“ Scope 1 emissions are the first category in carbon accounting. Scope 1 emissions include energy that is used solely within your own company. This can include energy consumed by rented or leased office spaces, vehicles, or the fuel or electricity required to operate heavy equipment like central heating or air conditioning. ”
Scope 1 emissions are greenhouse gasses that are produced directly at the source of the industrial activity of the company.
For example, at a Ford car manufacturing center, the emissions created by the actual production of the cars at that said facility would fall under scope 1 emissions.
Therefore, scope 1 emissions are the only emissions that are directly produced by the organization themselves.
Quick reminder: what is carbon accounting?
Carbon accounting is a method companies use to determine the culprit behind their own carbon footprint. In other words, carbon accounting helps companies break down their emissions into categories, otherwise known as “scopes''.
These scopes aim to break down the sources of activity which produce carbon dioxide emissions, so that a company can better understand their carbon footprint.
Carbon accounting is also referred to as greenhouse gas accounting.
Carbon accounting has been gaining recognition, as it often serves as the first step when companies decide they are ready to comprehend their own carbon footprint – and allows them to determine the next steps necessary to reduce their own carbon emissions.
Is carbon accounting important to reducing emissions?
As climate change continues to negatively impact life around the globe, carbon accounting has become more pivotal than ever before. This is because carbon accounting serves as an excellent first step for companies to transition into sustainable business patterns that the environment will thank them for.
“ Carbon accounting not only helps to reduce emissions and establish that a company is making an effort to be more sustainable, but it can persuade a company to make long-lasting, positive environmental change. For example, if a company sees that much of their emissions are being created by the vehicles in their company – they may be inspired to invest in electric cars to mitigate the amount of greenhouse gasses and pollution they are contributing to. ”
👉 Carbon accounting can also prevent greenwashing – which is when a company claims to be “greener” than they actually are. Carbon accounting does this by numerically delineating the areas where a company is successfully mitigating emissions, and where they can aim to improve their carbon footprint.
Lastly, carbon accounting can increase revenue and their overall finances – more investors and customers are becoming aware of the importance of investing or purchasing products that seek to be sustainable, avoid waste, and don’t contribute to climate change.
Scope 1 emissions are often the category first looked at in carbon accounting. So, does that mean they’re the most important – or do scope 2 and scope 3 emissions play just a big part in a company’s carbon footprint?
Why are scope 1 emissions important?
Scope 1 emissions are important because they are the only category of emissions in carbon accounting that can be completely controlled by the company.
The business has full authority to implement new equipment or business strategies to reduce the emissions in scope 1 emissions, whereas a company is not able to do the same with scope 2 emissions or scope 3 emissions.
Scope 1 emissions can help to reduce the amount of energy and emissions produced in scope 2 emissions. Therefore, it can be said that scope 1 emissions serve as the baseline for the future of all emissions to be produced by the company.
Do scope 1 emissions have a large impact on how much carbon dioxide emissions are produced by a company?
Scope 1 emissions have the potential to reduce the amount of emissions created in scope 2. Therefore, while scope 2 emissions don’t require the most upkeep – they are like the root of any other problem.
If you make an effort to reduce the amount of emissions being produced at the source, or at least improve the efficiency of the equipment, it could very well help to reduce your scope 2 emissions as well.
How can you and your company make an effort to reduce your own emissions?
Scope 1 emissions in carbon accounting can help demonstrate the importance of altering your company’s business model or industrialization tactics to reduce emissions. However, many of these changes are often not an immediate option for companies to reduce their emissions, and take time to successfully implement.
So, what are the other ways you can reduce your environmental impact that aren’t specific to scope 1 emissions?
Here are 3 ways that your company can lower your overall carbon emissions and join the fight against climate change.
Reduce electricity consumption
Everything requires power to operate, but does it need to be running when you’re not there?
Your company should strive to reduce their energy consumption whenever possible, and one of the biggest culprits of excessive energy use is when the heat, air conditioning, or lights are left on inhabited spaces.
Turn off lights and heating or air cooling systems where they aren’t necessary, and your company could help the environment while reducing their electricity bill at the same time!
Even better, see if your company can aim to use renewable energy sources instead of fossil fuels. This way, your company might be able to keep up with their production goals whilst still preserving the atmosphere.
Change the packaging of your product
It’s understandable that a massive change in your production habits isn’t financially feasible, especially for new companies. Pieces of equipment that drastically reduce carbon dioxide emissions from the source of activity, like a carbon capture and storage system – are expensive and require heavy labor to install.
You may not be able to change the production line of your company with ease, but how about the packaging?
Customers aren’t fond of excessive plastic or paper that they need to throw out after opening the product they ordered anyways, so why not strive to make your packaging environmentally friendly?
Even small businesses can implement sustainable packaging into their business. It doesn’t have to break the bank: just be mindful if the packaging is made with recycled or raw materials, can be reused, and doesn’t create a large carbon footprint to produce in the first place.
This is a really easy way for companies to reduce their carbon footprint and demonstrate their commitment to reducing emissions while maintaining their budget.
Invest in electric cars for your company!
There’s a reason why Teslas and electric car charging stations are becoming more popular. The Biden administration is even encouraging Americans to do so in the new climate bill by providing them with a tax credit if they decide to purchase an electric car over a gasoline powered car.
Not only is an electric car better for the environment, but it’s better for your gas bill. It may seem like a large investment at first, but over time – the amount of money and time you’ll save no longer filling up your car for gas will become indispensable to both you and the planet.
What about Greenly?
If reading this article about scope 1 emissions has made you interested in reducing your carbon emissions to further fight against climate change – Greenly can help you!
Greenly can help you make an environmental change for the better, starting with a carbon footprint assessment to know how much carbon emissions your company produces.
Click here to learn more about Greenly and how we can help you reduce your carbon footprint.
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