War in Ukraine and carbon management

In February, the war in Ukraine forced Russia to cut off natural gas supplies to Europe and cut exports of coal, crude oil, and more. The resulting increase in European energy prices contributed to the global energy crisis, while simultaneously driving up prices and contributing to the economic crisis.

Since then, awareness of the energy transition has expanded, and carbon schemes such as the Carbon Border Adjustment Scheme, which have been in the works for some time, have brought corporate carbon management into the spotlight.

■ How do I manage carbon?

Carbon management should be tailored to the industry and characteristics of our organization. For example, if our company exports steel products to Europe, we need to align our carbon management with the European Union’s (EU) Carbon Border Adjustment Mechanism (CBAM). The Carbon Boundary Adjustment Scheme requires internal emissions reports from October 23, 2023, and then carbon certificates must be purchased from 2026.

Also, if we are a supplier to Apple, a global company, our carbon management requirements are different. Apple participates in RE100, a global carbon neutrality campaign, and requires its associated companies to do the same. RE100 is an international campaign that aims to have 100% of the electricity used by companies come from renewable energy sources such as wind and solar by 2050. Once you join RE100, you will submit an implementation plan and have your progress reviewed annually.

As you can see, depending on the industry and nature of your organization, the way you manage carbon can vary.

Carbon management, too complicated and difficult

Carbon management is not a simple problem that can be solved by simply throwing money at it, like “imposing a carbon tax. Even the most basic carbon emissions calculations need to be measured accurately, with a total of three levels of scope. You’ll also need to be prepared in specialized areas, such as setting reduction targets for emissions and building specific implementation processes.

But it’s hard to navigate this unfamiliar and complex world of carbon management. This can be an even greater burden for small and midsize businesses that lack the capacity to respond. We also have to customize our industry-specific management methods for our company.