A carbon footprint is a calculation of the total greenhouse gas emissions caused directly and indirectly by an organisation or company. This is typically calculated and reported over a period of 12 months.

What often makes a carbon footprint complicated is defining the boundaries of the audit. The Greenhouse Gas Protocol provides the guidance to assist in determining both the organisational and operational boundaries of the carbon footprint.

The organisational boundary of a carbon footprint is determined through one of two approaches, namely the equity or control approaches.

Once the organisational boundary is determined, the operational boundary defines which operations and sources of emissions will be included in the carbon footprint.  If this sounds complicated, our team of experts at The Carbon Report can assist as our solution is specifically geared to demystify this complexity.

The next step in doing a carbon footprint involves sourcing business activity information such as electricity consumption or fuel purchases.  This business data is converted into carbon dioxide equivalents using factors that are relevant to the organisation and geography concerned.

Greenhouse gas emissions (often referred to as carbon emissions) are categorised as direct and indirect and accordingly grouped into Scopes for accounting and reporting purposes.

Direct emissions of a carbon footprint

Greenhouse gas emissions are ‘direct’ when they are generated from company owned or controlled sources and activities. These are called Scope 1 emissions and are accounted for as such.  Scope 1 emissions largely include fuel burned in company owned assets and air conditioning and refrigerant use.

Indirect emissions of a carbon footprint

‘Indirect’ greenhouse gas emissions sources are those emissions related to the company’s activities, but that are emitted from sources owned or controlled by a third party. These are categorised as either Scope 2 emissions for purchased electricity or as Scope 3 for other non-owned or controlled emissions e.g. air travel or paper use.

A carbon footprint is an important step in embarking upon a low carbon strategy, as it acts as a baseline from which to measure the success of carbon and energy reduction initiatives.

The South African government is looking to introduce a carbon tax in 2017.  The objective of this form of taxation is to reduce harmful greenhouse gas emissions.  60% of emissions will be tax-exempt up to 2020 to lessen the impact on industry according to the latest information available.

Over and above the basic 60% tax-free threshold for all sectors, additional allowances apply to various sectors and businesses.

So what is a carbon tax?

A carbon tax simply penalises companies and individuals that emit more carbon.  Emissions can occur from various sources although the most common being fuel combustion in transportation and electricity generation.  To put this into perspective, 1kg of carbon dioxide is emitted for every kilowatt hour of electricity generated in South Africa.  The net result is that becoming energy efficient  and lowering energy consumption becomes increasingly important.

Companies have said that a carbon tax that places too heavy a burden on the key energy, mining and manufacturing sectors will hit profits and wider economic growth.   These sectors as we know are already under pressure due to rising power and wage costs and the current economic climate.

The draft carbon tax bill sets the carbon tax rate at R120 per ton of CO2e (carbon dioxide equivalent) for emissions above the thresholds.

The carbon tax will be designed to create incentives for companies, businesses and individuals to change their behaviors and consumption patterns to reduce the reliance on polluting fossil fuels.  This is simply illustrated in the Carbon Tax Cycle diagram set out below.

Feel free to contact us if you have any queries around the impending carbon tax.  Our consultants can assist you in understanding your risk exposure and work with you to develop a strategy to mitigate this risk.

Many companies that we work with want to become carbon neutral. What this means is that emissions that are created in business operations are neutralised through the purchase of a carbon offset. Because global warming is by definition a “global issue”, the purchased offset, if equivalent to the emissions produced renders the organisation in question carbon neutral.

Obviously when deciding to become carbon neutral, the first step is to measure your emissions and that is precisely what The Carbon Report can help you achieve. Not only this, once quantified we are able to issue you with certified carbon offsets through our preferred partners.

The carbon offsets we provide are fully traceable through carbon registries and are certified by one of the recognised carbon standards.