Internal Carbon Fee

Ready to make a real impact?

Front-runners in sustainability are increasingly looking for ways to include the true environmental and societal costs of their operations in their climate strategy. Internalising these costs via an internal carbon fee helps to ensure that every ton of carbon your company emits is accounted for, and creates a business wide incentive to reduce your emissions.

Want to learn more about internal carbon fees or how to incorporate this in your business? Download our whitepaper, keep reading or schedule a call!

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What is an Internal
Carbon Fee?

Simply put, an internal carbon fee is a self-imposed charge your company applies to its own carbon emissions. For every ton of CO2 your business emits, you set aside a fee. This creates a budget to fund projects that reduce emissions, or to invest in nature based solutions as part of your Beyond Value Chain Mitigation (BVCM).

Unlike traditional offsetting, this fee makes your company directly responsible for the true cost to the environment and society. By internalising these costs, you can drive real, measurable impact, whilst complying with frameworks like the Corporate Sustainability Reporting Directive (CSRD) and the Science Based Targets initiative (SBTi).

Companies applying an internal carbon fee

How to set an internal carbon fee?

Start with the Science: Use benchmarks like the social cost of carbon or the marginal abatement cost to find a price per ton of CO2. These benchmarks ensure your fee is aligned with global climate goals.

Define Your Scope: Decide if your fee covers internal, external, upstream, or downstream emissions. You can also set different fees for different types of emissions.

Set the Price: Choose a price that’s economically viable now, with plans to increase it over time. This ensures your fee remains relevant and impactful.

Review Regularly: Adjust your fee annually to account for inflation and the latest scientific insights, ensuring it continues to reflect the true cost of emissions.

Benefits of an Internal Carbon Fee

Curious about how an internal carbon fee can revolutionise your business and benefit the planet? Here's what you need to know:

Business-Wide Incentive

By internalizing the cost of emissions, every department in your company is motivated to find ways to reduce their carbon footprint. This transforms day-to-day activities to be more sustainable.

Purposeful Impact

Use the funds from the internal carbon fee for initiatives that align with your company's values and mission. This not only reinforces your brand’s message but also ensures a meaningful return on investment.

Bulletproof Claims

Make solid environmental claims backed by real economic measures. This approach helps you avoid the controversies and problems often associated with traditional carbon credits.

Want to learn more?

If you're eager to understand the full potential of internal carbon fees and how they can be a game-changer for your sustainability strategy, don't stop here.

Download our comprehensive whitepaper now to gain in-depth insights, practical examples, and step-by-step guidance, or schedule a call directly.