Climate change has become a priority issue for governments, companies and individuals around the world. Reducing carbon emissions is at the heart of this challenge and companies have certain obligations in this regard. In this article, we will examine the legal obligations of companies to reduce carbon emissions, current as of July 2024.

International Obligations

a) Paris Agreement

Paris Agreementis a global climate agreement adopted in 2015 and signed by 196 countries. The main goal of the agreement is to keep the global temperature rise below 2°C and, if possible, limit it to 1.5°C. Under the Paris Agreement, countries submit their Nationally Determined Contributions (NDCs) and make specific commitments to reduce their carbon emissions.

b) Kyoto Protocol

Kyoto Protocol, It was a 1997 climate change agreement that entered into force in 2005. The Protocol expired in 2020 and was replaced by the Paris Agreement.

European Union Obligations

a) European Green Deal

The European Green Deal is a comprehensive strategy that sets the European Union's goal of becoming carbon neutral by 2050. The agreement includes various obligations and incentives for companies:

• Border Carbon Adjustment Mechanism (CBAM): It envisages taxing certain products imported into the EU based on their carbon content. This mechanism, adopted in 2023, will come into full force in 2026.
• Emissions Trading System (ETS): It allows companies to buy and sell emission rights within a certain carbon emission quota. The ETS came into force in 2005 and has been expanded over time.

b) Fit for 55 Package

Fit for 55 Paketi, 2030 yılına kadar AB’nin karbon emisyonlarını 1990 seviyelerine göre %55 azaltmayı hedefleyen bir dizi düzenlemeden oluşur. Bu paket kapsamında, enerji, ulaşım, sanayi ve inşaat sektörlerindeki şirketler için çeşitli yasal yükümlülükler getirilmiştir.

• Renewable Energy Directive: It includes specific targets and regulations to increase the use of renewable energy.
• Energy Performance of Buildings Directive: Imposes obligations to improve the energy efficiency of buildings.

National Obligations

The obligations and practices of countries to reduce carbon emissions vary according to each country. Below are some important examples:

a) Germany: Climate Protection Act (Klimaschutzgesetz)

Almanya’nın İklim Koruma Yasası, ülkenin karbon emisyonlarını 2030 yılına kadar %55 azaltmayı ve 2045 yılına kadar karbon nötr olmayı hedefler. Yasa, sektör bazında karbon emisyon azaltım hedefleri belirler ve bu hedeflere ulaşmak için çeşitli düzenlemeler getirir.

b) United States of America: Climate Action Plans

The US has various climate action plans at the federal and state level. The federal government has implemented various policies to reduce carbon emissions, such as energy efficiency standards, renewable energy incentives and carbon regulations. In addition, some states, such as California, have set their own carbon trading systems and emission reduction targets.

Legal Obligations for Companies

The legal obligations of companies to reduce carbon emissions may vary depending on the country or region in which they operate. However, in general, companies may have the following obligations:

a) Carbon Footprint Reporting

Many countries and regions require large companies to report their carbon footprint. These reports cover Scope 1 (direct emissions), Scope 2 (indirect energy emissions) and Scope 3 (other indirect emissions). Reporting requirements may vary depending on the size, sector and location of the company.

b) Energy Efficiency Standards

Companies have to comply with legal standards set to reduce energy consumption and improve energy efficiency. This includes the use of energy efficient equipment, the installation of energy management systems and energy consumption reporting.

c) Use of Renewable Energy

Many governments encourage companies to use renewable energy. These incentives are supported by various regulations for renewable energy investments, such as tax breaks, subsidies and mandatory renewable energy rates.

d) Other Liabilities

In some countries and regions, there are additional legal obligations for companies to reduce carbon emissions. This includes regulations on issues such as waste management, supply chain sustainability and environmental claims on products.

Compliance Benefits

Complying with legal obligations to reduce carbon emissions has many benefits for companies:

• Reducing environmental impact
• Reducing costs
• Enhancing reputation
• Access to new market opportunities
• Attracting investors and customers
• Reducing regulator risk

Conclusion

Reducing carbon emissions is a pressing issue for all companies. Understanding current and legal obligations and taking proactive steps to reduce GHG emissions is critical from both an environmental and business perspective. In addition to complying with legal obligations, companies can take additional steps to reduce GHG emissions, such as

• Investing to increase energy efficiency
• Switch to renewable energy sources
• Adopting sustainable supply chain practices
• Raising awareness among employees and organizing training programs
• Investing in innovation and low-carbon technologies

By taking these steps, companies can contribute to reducing global greenhouse gas emissions and contributing to a more sustainable future. It is also relevant to the European Union and Germany's link you can get information over.