New rules, new opportunities? The impact of changing CO2 legislation on your business!

European legislation on greenhouse gas emissions: a changing landscape

The European Union is making significant strides to reduce greenhouse gas emissions, aiming to become the first climate-neutral continent by 2050. In the context of the European Green Deal, increasingly stringent legislation is being introduced for emissions from energy consumption, transportation, production processes, and the supply chain. Companies must accurately map their Corporate Carbon Footprint (CCF), distinguishing between Scope 1, Scope 2, and Scope 3 emissions. This enables them to better manage their direct and indirect impact on the environment.

Scope 1 emissions include direct emissions from business activities, such as fossil fuels used for production and transport. Scope 2 emissions arise from the purchase of energy, such as electricity and heat. The EU is tightening the Emissions Trading System (ETS), whereby the number of emission allowances decreases annually. Companies need to transition to sustainable energy sources and increase energy efficiency to meet the increasingly stringent requirements.

Transport causes significant Scope 1 and Scope 3 emissions. The EU is focusing on promoting emission-free transport, with the goal that all new vehicles will be emission-free by 2035. Freight, transport and shipping are being subjected to new emission standards. Companies need to invest in electric and hydrogen vehicles to reduce their emissions and comply with upcoming regulations.

The industry is being urged to drastically reduce their Scope 1 emissions, with measures such as the expansion of the ETS and the introduction of the Carbon Border Adjustment Mechanism. (CBAM). So that polluting and cheaper products only enter the EU market at higher costs. Scope 3 emissions, which include indirect emissions from the supply chain, are also becoming increasingly important. Companies need to make their entire value chain sustainable, from raw materials to end products, to reduce their carbon footprint.

European legislation will be further tightened in the coming years, with a focus shifting to Scope 1, 2, and 3 emissions. Scope 3 is complex due to the long chains, but often constitutes the largest part of the emissions. Companies must hold their supply chain partners to stricter standards and provide more transparency about their environmental impact.

Conclusion: time to take action

Companies that are already taking measures to reduce their Scope 1, 2, and 3 emissions will not only comply with future legislation but also save costs, enhance their reputation, and gain a competitive advantage. The European market is moving towards a low-carbon future, and taking early action offers opportunities for growth and sustainability.