Published

2 years ago

June 20, 2024

Alice Rush

The European Union’s (EU) upcoming carbon border tax is causing waves of anxiety among British green energy producers. As per the new directive, “British wind and solar farms exporting power to continental Europe from 2026 could face CO2 fees, despite producing no emissions, unless the UK and EU agree to amend the carbon border tax.”

Thus, industry leaders fear that this new policy could penalize the UK’s green energy sector. They are apprehensive that their efforts to combat climate change could be undermined, potentially disrupting trade relationships.

What is the Carbon Border Tax?

The EU’s carbon border tax, officially known as the Carbon Border Adjustment Mechanism (CBAM), is designed to prevent “carbon leakage”. This happens when companies shift production to countries with weaker climate regulations, thereby undermining global efforts to reduce emissions. The tax aims to level the playing field by imposing fees on imported goods from countries with less stringent climate policies.

Will the EU CBAM Impact British Renewable Exports?

A few days ago, Reuters reported that industry experts revealed how charges outlined in a little-known clause of the CO2 levy law could impact the revenues of renewable energy projects in the UK. This could further add to already-high EU power prices and even lead to higher emissions.

Andy Berman, deputy director of the industry group Energy UK pointed out that it’s a two-way problem. She added,

“(It) disincentivizes clean power in the UK at the moment in which we’re trying to ramp up the provision of clean power, and it’s going to increase (power) prices in northern Europe.”

Catherine Stewart, the UK Treasury’s deputy director for trade policy also expressed her views on EU’s tax policy by stating,

“It is an issue that we are conscious of and one that we have raised, that the UK has raised, with the EU.”

Despite the UK’s commitment to reducing emissions and its robust green energy sector, industry leaders fear that the carbon border tax might negatively impact British companies. The concern is that the tax will be applied to all imports, regardless of the exporting country’s green credentials and carbon footprint.

source: Carbon Border Adjustment Mechanism – European Commission (Europa.eu)

Let’s elaborate on the potential impact on the renewable industry and trade relations at large.

Economic Feasibility at Risk

Analysts warn that the additional costs could render it “uneconomic” to export surplus clean power from Britain to Europe, especially during periods of low demand, high renewable generation, and low power prices.

Aurora Energy Research’s analysis, shared with Reuters, indicates:

Up to 3 GWh of renewable power could be curtailed by 2030 if the fee discourages exports. This capacity is enough to supply 2,000 homes annually.
Adding a tax on exports essentially reduces the profit margin every time exports occur. By 2030, the carbon border fee could reduce the revenue British renewable projects earn for their power by 5%.

The research firm highlighted key facts about the renewable capacity buildout based on government policy and market forces.

1. Increasing power demand

Europe aims to decarbonize and achieve Net Zero emissions by 2050, primarily by electrifying its economy and expanding renewable energy to cut emissions. Growing demand for Power Purchase Agreements (PPAs) boosts investment in renewables. Enhanced energy efficiency lowers power demand.

2. Strong policy support and Government ambition

Government ambition pushes deploying renewables and robust policy support fosters investor confidence. Sudden policy changes or lack of support can harm investor confidence in renewables within a country.

3. Rising fuel and carbon prices

High gas prices have led to a switch back to coal generation. New market players have increased speculation and volatility, a trend expected to continue. Independent Commodity Intelligence Services (ICIS) estimates carbon prices will reach €90 per tonne by 2030.

4. Phase-out of thermal capacity

As Europe phases out coal and older, unabated gas assets to meet decarbonization goals, it creates opportunities for low-carbon alternatives to meet rising power demand. The retirement of thermal capacity strains system requirements like frequency and voltage control, which cannot be fully met by renewables alone.

Impact on Wholesale Prices and Emissions

Market Screener has reported two interesting analyses:

Aurora Research: The company analyzed the consequence of the reduction in cheap British electricity exports. It can potentially spike wholesale power prices by up to 4% in markets like Ireland and Northern Ireland which rely heavily on UK imports.

AFRY Services: The research firm indicated that if European countries increase coal and gas power generation to cover the shortfall, CO2 emissions could rise by 13 million tonnes annually. This increase is equivalent to the emissions of 8 million cars.

The figure shows that: Failure to remove renewables barriers leads to 80% higher CO2 price in 2030 significantly raising wholesale electricity prices for European industry & consumers.

EU CBAM sources: Aurora Energy Research, EIKON, S&P

MUST READ: UEFA’s Green Goals: $7.6M Climate Fund for EURO 2024 Carbon Footprint (carboncredits.com)

Can Renewable Exports Avoid CO2 Fees?

A European Commission spokesperson stated that renewable power exports could avoid CO2 fees if they meet specific criteria and prove their origin. However, industry experts argue this is challenging. They assume that most electricity traded across interconnectors is anonymous, making it difficult to calculate the carbon content.

They have also voiced concerns, stating the tax penalizes sectors leading the fight against climate change. RenewableUK stressed the need for a system that rewards green energy credentials without unnecessary barriers. They called for policies that consider the actual carbon footprint of imports rather than applying a blanket approach.

Linking Carbon Markets: A Viable Solution

One potential solution is linking the EU and UK carbon markets, which would exempt UK power producers from the tax.

RELATED: UK Reveals Move for a Carbon Border Tax in 2027 (carboncredits.com)

Alistair McGirr, SSE’s Group Head of Policy and Advocacy noted,

“Linking the carbon markets could prevent UK exporters from paying a tax to the EU that could otherwise benefit the UK budget.”

Despite this suggestion, neither Brussels nor London has shown enthusiasm for the idea.

Former UK climate change minister Graham Stuart also spoke in favor of linking carbon markets that could be explored under the post-Brexit Trade and Cooperation Agreement. The European Commission spokesperson added that the EU is open to linking its carbon market with others, but it “must stem from a mutual wish from both parties.”

Green Enhancing, Not Green Washing: Bolstering EU’s Carbon Markets

We discovered a significant aspect of tax implication on industry and consumers from the latest press release of the Council of EU.

Notably, the Council adopted its position on the Green Claims Directive to tackle greenwashing and help consumers make informed greener choices. The directive sets minimum requirements for substantiating, communicating, and verifying environmental claims. This move follows a 2020 study revealing that over half of environmental claims are vague, misleading, or unfounded. Thus, reliable, comparable, and verifiable claims are essential for informed consumer decisions.

Alain Maron, Minister of the Government of the Brussels-Capital Region, responsible for climate change, environment, energy, and participatory democracy has commented on this move,

“Today, we reached an important agreement to fight greenwashing by setting rules on clear, sufficient and evidence-based information on the environmental characteristics of products and services. Our aim is to help European citizens to make well-founded green choices.”

Organizations like Anew Climate, Rubicon Carbon, and others, hailed the EU’s progress on the Green Claims Directive (GCD) but called for further action to ensure it supports transparent and credible green claims, vital for achieving net zero. Key recommendations include:

Reliable Green Claims: Ensure claims are reliable, comparable, and verifiable across the EU to prevent greenwashing.
Simplified Framework: Avoid unnecessary administrative burdens and support the use of all types of carbon credits, not just EU-originated removal credits.
Uniformity in Standards: Align with existing frameworks like the CRCF and ICVCM to avoid overlap and enhance international consistency.

They collectively believe adopting these measures will boost voluntary private-sector investment in climate mitigation. It would also advance the Green Deal and strengthen Europe’s competitive market.

CBAM source: EU-CBAM

This analysis emphasizes the need for dialogue between UK and EU policymakers to ensure the tax does not sabotage the global fight against climate change. Furthermore, a balanced approach is crucial for British Green Energy to recognize its efforts while minimizing trade disruption. Overall, the future of UK-EU trade and the global climate agenda hinges on achieving this equilibrium.

FURTHER READING: EU Commission Backs Germany’s Renewable Hydrogen Plan with $380M Funding • Carbon Credits

The post EU’s Latest Carbon Border Tax Sparks Concerns for British Green Energy appeared first on Carbon Credits.

Carbon Footprint

Finding Nature Based Solutions in Your Supply Chain

Published

1 week ago

May 20, 2026

Alice Rush

“…Protecting nature makes our business more resilient…”

Julie Brown, Chief Financial Officer, GSK, and Co-Chair, A4S CFO Leadership Network (Europe)

Tweet

For companies with land, water, food, fiber, or commodity exposure, the supply chain may be the most practical place to turn nature from a risk into an operating asset.

Your supply chain already has a nature strategy. It may be undocumented. It may live in procurement files, supplier contracts, commodity maps, and one spreadsheet nobody opens without coffee. But it exists.

If your business depends on farms, forests, water, soil, packaging, rubber, timber, fibers, minerals, or food ingredients, nature is part of your operating system. The question is whether you manage that system with intent, or discover it during a disruption, audit, or difficult board question.

That is why more companies are asking how to find Nature-Based Solutions in Your Supply Chain. Do not begin by shopping for offsets. Begin by asking where nature already affects cost, continuity, emissions, regulatory exposure, and supplier resilience.

What Nature-Based Solutions in Your Supply Chain Means

The European Commission defines nature-based solutions as approaches inspired and supported by nature that are cost-effective, deliver environmental, social, and economic benefits, and help build resilience. They should also benefit biodiversity and support ecosystem services.

In supply-chain terms, that becomes practical. Nature-based solutions in your supply chain can include agroforestry in cocoa, coffee, rubber, or palm supply chains. They can include soil health programs for food ingredients, watershed restoration near water-intensive operations, mangrove restoration linked to coastal sourcing regions, and avoided deforestation in forest-linked commodities.

The key test is business relevance. If your procurement team relies on a landscape, watershed, crop, or supplier base, that is where opportunity may sit. The best projects do not hover outside the business like a framed certificate. They plug into the system that already produces your revenue.

Why the Boardroom Should Care

For many companies, the largest climate and nature exposure sits outside direct operations. The GHG Protocol Scope 3 Standard gives companies a method to account for and report value-chain emissions across sectors. Purchased goods, land use, transport, supplier energy, and product use can make direct emissions look like the visible tip of a very large iceberg.

The Taskforce on Nature-related Financial Disclosures notes that many nature-related dependencies, impacts, risks, and opportunities arise upstream and downstream. That is why nature-based supply chain investments matter to boards. You are managing supply security, audit readiness, investor confidence, and regulatory preparedness.

For companies exposed to EU markets, this also connects to rules and expectations such as CSRD, CSDDD, EUDR, and SBTi FLAG.

Step One: Map Where You Touch Land, Water, and Living Systems

Finding Nature-Based Solutions in Your Supply Chain starts with mapping, not marketing.

Begin with procurement and Scope 3 data. Which categories carry high spend, high emissions, or high sourcing risk? Which suppliers depend on agriculture, forestry, mining, water-intensive processing, or land conversion? Which regions face water stress, heat, flood risk, soil degradation, deforestation, or biodiversity pressure?

The Science Based Targets Network uses a clear process for companies: assess, prioritize, set targets, act, and track. That sequence keeps companies from treating nature as a mood board. You identify where the business has exposure, then decide where intervention can create measurable value.

Step Two: Look for Operational Value Before Carbon Value

This is the center of CCC’s Dual-Value Model. A nature-based supply chain investment should do useful work for the business before anyone counts the carbon.

Agroforestry may improve farmer resilience, shade crops, protect soil, and reduce pressure on forests. Watershed restoration may reduce water risk for beverage, textile, or manufacturing sites. Soil health programs may improve the stability of agricultural inputs.

Carbon and sustainability value can still be created. In some cases, the project may support Scope 3 insetting. In others, it may generate verified carbon credits. Sometimes the main value may be resilience, readiness, and better supplier data.

The IPCC has found that ecosystem-based adaptation can reduce climate risks to people, biodiversity, and ecosystem services, with multiple co-benefits, while also warning that effectiveness declines as warming increases. That is a sober argument for acting early.

Step Three: Separate Insetting, Offsetting, and Resilience

Nature-based solutions in your supply chain are not automatically carbon credits. They are not automatically Scope 3 reductions either.

An insetting opportunity usually sits inside or close to your value chain. It may support Scope 3 reporting if the accounting rules, project boundaries, supplier connection, and data quality are strong enough.

An offsetting opportunity usually involves verified credits outside your value chain. High-quality credits can still play a role for residual emissions, but they should not distract from direct reductions or credible value-chain work.

A resilience opportunity may deliver business value even if you cannot claim a Scope 3 reduction immediately. That may include water security, supplier capacity, land restoration, biodiversity protection, or regulatory readiness.

Gold Standard’s Scope 3 value-chain guidance focuses on reporting emissions reductions from interventions in purchased goods and services. Verra’s Scope 3 Standard Program is being developed to certify value-chain interventions and issue units for companies’ emissions accounting. The direction is clear: stronger evidence, tighter boundaries, and more disciplined claims.

Step Four: Design for Audit-Readiness From the Beginning

Weak data is where promising nature projects go to become expensive anecdotes.

Before public claims are made, you need to know the baseline. What would have happened without the project? Who owns or manages the land? Which suppliers are involved? How will outcomes be measured? How will leakage, permanence, and double counting be addressed?

The GHG Protocol Land Sector and Removals Standard gives companies methods to quantify, report, and track land emissions, CO2 removals, and related metrics. This matters because land projects are rarely neat. Farms change practices. Suppliers shift volumes. Weather changes outcomes.

What Recent Corporate Examples Show

Recent case studies show that supply-chain nature work is becoming more serious, and more scrutinized.

Reuters has reported on insetting to reduce emissions within supply chains, including examples linked to Reckitt, Danone, Nestlé, Earthworm Foundation, and Nature-based Insights. The same article highlights familiar problems: measurement, double counting, supplier incentives, and credibility.

Reuters has also reported on companies using the Science Based Targets Network process to examine nature impacts. GSK, Holcim, and Kering were among the first companies with validated science-based targets for nature.

The Financial Times has covered the promise and difficulty of soil carbon in corporate supply chains, including a PepsiCo example in India where yields reportedly increased while greenhouse gas emissions fell. The lesson is that carbon, soil, biodiversity, farmer economics, and measurement need to be handled together.

A Practical Screening Checklist

A supply-chain nature-based solution deserves deeper review when you can answer yes to most of these questions:

Does it sit in or near a material supply-chain hotspot?
Does it address a real business risk?
Can you connect it to supplier behavior, land management, or sourcing practices?
Can the outcomes be measured?
Are the claim boundaries clear?
Does it support Scope 3 strategy, SBTi FLAG, CSRD, CSDDD, EUDR, or investor reporting needs?
Are permanence, leakage, land rights, and community issues addressed?

Build the Asset, Then Make the Claim

Finding Nature-Based Solutions in Your Supply Chain is about identifying where your business already depends on living systems, then designing interventions that make those systems more resilient, measurable, and commercially useful.

For companies with material Scope 3 exposure, the right project can support supplier resilience, emissions strategy, regulatory readiness, and credible climate communication. The wrong project can become a glossy story with a weak audit trail.

Carbon Credit Capital helps companies design nature-based carbon and sustainability assets that embed directly into corporate supply chains. Through CCC’s Dual-Value Model, you can assess where sustainability investment may support operational resilience, Scope 3 insetting eligibility, regulatory readiness, and high-quality carbon or sustainability value.

Schedule your consultation with the carbon and sustainability experts at Carbon Credit Capital to explore how nature-based supply chain investments can support your next stage of climate strategy.

Sources

Carbon Footprint

How Climate Change Is Raising the Cost of Living

Published

1 week ago

May 19, 2026

Alice Rush

Americans are paying more for insurance, electricity, taxes, and home repairs every year. What many people may not realize is that climate change is already one of the drivers behind those rising costs.

For many households, climate change is no longer just an environmental issue. It is becoming a cost-of-living issue. While climate impacts like melting glaciers and shrinking polar ice can feel distant from everyday life, the financial effects are already showing up in monthly budgets across the country.

Today, a larger share of household income is consumed by fixed costs such as housing, insurance, utilities, and healthcare. (3) Climate change and climate inaction are adding pressure to many of those expenses through higher disaster recovery costs, rising energy demand, infrastructure repairs, and increased insurance risk.

The goal of this article is to help connect climate change to the everyday financial realities people already experience. Regardless of where someone stands on climate policy, it is important to recognize that climate change is already increasing costs for households, businesses, and taxpayers across the United States.

More conservative estimates indicate that the average household has experienced an increase of about $400 per year from observed climate change, while less conservative estimates suggest an increase of $900.(1) Those in more disaster-prone regions of the country face disproportionate costs, with some households experiencing climate-related costs averaging $1,300 per year.(1) Another study found that climate adaptation costs driven by climate change have already consumed over 3% of personal income in the U.S. since 2015.(9) By the end of the century, housing units could spend an additional $5,600 on adaptation costs.(1)

Whether we realize it or not, Americans are already paying for climate change through higher insurance premiums, energy costs, taxes, and infrastructure repairs. These growing expenses are often referred to as climate adaptation costs.

Without meaningful climate action, these costs are expected to continue rising. Choosing not to invest in climate action is also choosing to spend more on climate adaptation.

Here are a few ways climate change is already increasing the cost of living:

Higher insurance costs from more frequent and severe storms
Higher energy use during longer and hotter summers
Higher electricity rates tied to storm recovery and grid upgrades
Higher government spending and taxpayer-funded disaster recovery costs

The real debate is not whether climate change costs money. Americans are already paying for it. The question is where we want those costs to go. Should we invest more in climate action to help reduce future climate adaptation costs, or continue paying growing recovery and adaptation expenses in everyday life?

How Climate Change Is Increasing Insurance Costs

There is one industry that closely tracks the financial impact of natural disasters: insurance. Insurance companies are focused on assessing risk, estimating damages, and collecting enough revenue to cover losses and remain financially stable.

Comparing the 20-year periods 1980–1999 and 2000–2019, climate-related disasters increased 83% globally from 3,656 events to 6,681 events. The average time between billion-dollar disasters dropped from 82 days during the 1980s to 16 days during the last 10 years, and in 2025 the average time between disasters fell to just 10 days. (6)

According to the reinsurance firm Munich Re, total economic losses from natural disasters in 2024 exceeded $320 billion globally, nearly 40% higher than the decade-long annual average. Average annual inflation-adjusted costs more than quadrupled from $22.6 billion per year in the 1980s to $102 billion per year in the 2010s. Costs increased further to an average of $153.2 billion annually during 2020–2024, representing another 50% increase over the 2010s. (6)

In the United States, billion-dollar weather and climate disasters have also increased significantly. The average number of billion-dollar disasters per year has grown from roughly three annually during the 1980s to 19 annually over the last decade. In 2023 and 2024, the U.S. recorded 28 and 27 billion-dollar disasters respectively, both setting new records. (6)

The growing impact of climate change is one reason insurance costs continue to rise. “There are two things that drive insurance loss costs, which is the frequency of events and how much they cost,” said Robert Passmore, assistant vice president of personal lines at the Property Casualty Insurers Association of America. “So, as these events become more frequent, that’s definitely going to have an impact.” (8)

After adjusting for inflation, insurance costs have steadily increased over time. From 2000 to 2020, insurance costs consistently grew faster than the Consumer Price Index due to rising rebuilding costs and weather-related losses.(3) Between 2020 and 2023 alone, the average home insurance premium increased from $75 to $360 due to climate change impacts, with disaster-prone regions experiencing especially steep increases.(1) Since 2015, homeowners in some regions affected by more extreme weather have seen home insurance costs increased by nearly 57%.(1) Some insurers have also limited or stopped offering coverage in high-risk areas.(7)

For many families, rising insurance costs are no longer occasional financial burdens. They are becoming recurring monthly expenses tied directly to growing climate risk.

How Rising Temperatures Increase Household Energy Costs

A light bulb, a pen, a calculator and some copper euro cent coins lie on top of an electricity bill

The financial impacts of climate change extend beyond insurance. Rising temperatures are also changing how much energy Americans use and how utilities plan for future electricity demand.

Between 1950 and 2010, per capita electricity use increased 10-fold, though usage has flattened or slightly declined since 2012 due to more efficient appliances and LED lighting. (3) A significant share of increased energy demand comes from cooling needs associated with higher temperatures.

Over the last 20 years, the United States has experienced increasing Cooling Degree Days (CDD) and decreasing Heating Degree Days (HDD). Nearly all counties have become warmer over the past three decades, with some areas experiencing several hundred additional cooling degree days, equivalent to roughly one additional degree of warmth on most days. (1) This trend reflects a warming climate where air conditioning demand is increasing while heating demand generally declines. (4)

As temperatures continue rising, households are expected to spend more on cooling than they save on heating. The U.S. Energy Information Administration (EIA) projects that by 2050, national Heating Degree Days will be 11% lower while Cooling Degree Days will be 28% higher than 2021 levels. Cooling demand is projected to rise 2.5 times faster than heating demand declines. (5)

These projections come from energy and infrastructure experts planning for future electricity demand and grid capacity needs. Utilities and grid operators are already preparing for higher peak summer electricity loads caused by rising temperatures. (5)

Longer and hotter summers also affect how homes and buildings are designed. Buildings constructed for past climate conditions may require upgrades such as larger air conditioning systems, stronger insulation, and improved ventilation to remain comfortable and energy efficient in the future. (10)

For many households, this means higher monthly utility bills and potentially higher long-term home improvement costs as temperatures continue to rise.

How Climate Change Affects Electricity Rates

On an inflation-adjusted basis, average U.S. residential electricity rates are slightly lower today than they were 50 years ago. (2) However, climate-related damage to utility infrastructure is creating new upward pressure on electricity costs.

Electric utilities rely heavily on above-ground poles, wires, transformers, and substations that can be damaged by hurricanes, storms, floods, and wildfires. Repairing and upgrading this infrastructure often requires substantial investment.

As a result, utilities are increasing electricity rates in response to wildfire and hurricane events to fund infrastructure repairs and future mitigation efforts. (1) The average cumulative increase in per-household electricity expenditures due to climate-related price changes is approximately $30. (1)

While this increase may appear modest today, utility costs are expected to rise further as climate-related infrastructure damage becomes more frequent and severe.

How Climate Disasters Increase Government Spending and Taxes

Extreme weather events also damage public infrastructure, including roads, schools, bridges, airports, water systems, and emergency services infrastructure. Recovery and rebuilding costs are often funded through taxpayer dollars at the federal, state, and local levels.

The average annual government cost tied to climate-related disaster recovery is estimated at nearly $142 per household. (1) States that frequently experience hurricanes, wildfires, tornadoes, or flooding can face even higher public recovery costs.

These expenses affect taxpayers whether they personally experience a disaster or not. Climate-related recovery spending can increase pressure on public budgets, emergency management systems, and infrastructure funding nationwide.

Reducing Climate Costs Through Climate Action

While this article focuses on the growing financial costs associated with climate change, the issue is not only about money for many people. It is also about recognizing our environmental impact and taking responsibility for reducing it in order to help preserve a healthy planet for future generations.

While individuals alone cannot solve climate change, collective action can help reduce future climate adaptation costs over time.

For those interested in taking action, there are three important steps:

Estimate your carbon footprint to better understand the emissions connected to your lifestyle and activities.
Create a plan to gradually reduce emissions through energy efficiency, cleaner technologies, and more sustainable choices.
Address remaining emissions by supporting verified carbon reduction projects through carbon credits.

Carbon credits are one of the most cost-effective tools available for climate action because they help fund projects that generate verified emission reductions at scale. Supporting global emission reduction efforts can help reduce the long-term impacts and costs associated with climate change.

Visit Terrapass to learn more about carbon footprints, carbon credits, and climate action solutions.

The post How Climate Change Is Raising the Cost of Living appeared first on Terrapass.

Carbon Footprint

Carbon credit project stewardship: what happens after credit issuance

Published

1 week ago

May 18, 2026

Alice Rush

A carbon credit purchase is not a transaction that closes at issuance. The credit may be retired, the certificate filed, and the reporting box ticked. But on the ground, in the forest, in the field, and in the community, the work continues. It endures for years. In many cases, for decades.