Carbon emission regulations around the world

Legal Regulations for Emissions Reporting
Many countries have different legal requirements for companies to report their carbon emissions. In the UK, for example, companies are required to report their emissions under the Streamlined Energy and Carbon Reporting (SECR) framework if they meet two of the following three criteria: annual turnover of £36 million or more; a balance sheet total of £18 million or more; or 250 or more employees. Under SECR, companies must report their greenhouse gas emissions, energy consumption, and energy efficiency measures in their annual reports.

In the European Union (EU), companies are required to report their carbon emissions under the EU Emissions Trading System (ETS). The ETS sets a limit on the total amount of greenhouse gas emissions that can be released by covered entities. Companies that emit more than 25,000 tonnes of carbon dioxide a year must purchase carbon credits to offset their emissions.

In the United States, facilities that emit more than 25,000 metric tons of carbon dioxide will need to report their emissions to the Environmental Protection Agency (EPA), but some states have implemented their own regulations. California, for example, requires companies to report their greenhouse gas emissions if they emit more than 10,000 metric tonnes of carbon dioxide.

Australia, which has been hit particularly hard by climate change, especially in their wildlife and marine environment, also has mandatory emissions reporting. Companies that either earn over AUD $100 million in revenue, produce over 200,000 tonnes of carbon dioxide in scope 1 or 2 emissions, or over 100,000 tonnes of carbon dioxide in scope 3 emissions, will have to report their emissions under the National Greenhouse and Energy Report (NGER) scheme.

These schemes are very different from each other and none of them go far enough, although Europe and the UK’s are better than most others.

Voluntary Frameworks
In addition to legal requirements for emissions reporting, many companies are voluntarily participating in programs designed to reduce their carbon emissions and promote sustainable practices. One of the most well-known programs is the Science Based Targets initiative (SBTi), which encourages companies to set targets for reducing their greenhouse gas emissions in line with the latest climate science. More than 1,000 companies around the world have committed to setting science-based targets, including major corporations like Walmart, Coca-Cola, and Nestle.

Another popular voluntary framework is the Task Force on Climate-related Financial Disclosures (TCFD), which encourages companies to disclose their climate-related risks and opportunities to investors. The TCFD was created in response to concerns that companies were not adequately disclosing the financial risks associated with climate change, and it has been endorsed by over 1,000 organisations worldwide.

Litigation and Fines surrounding Carbon Emissions Reporting
As the impact of climate change becomes more severe, we are seeing an increasing number of lawsuits and penalties related to false claims. Currently, there are over 2000 climate litigation cases. Regarding carbon emissions, most litigations and fines have to do with misreporting of emissions by corporations.

Perhaps the most high-profile case regarding carbon emissions to date is the scandal involving Volkswagen AG, where they were required to pay $4.3 billion in criminal and civil penalties. This is a result of the company’s scheme to sell diesel vehicles in the United States by cheating on emissions tests mandated by the EPA and the California Air Resources Board (CARB).