Insulation maker Kingspan is to charge its own internal business units a notional carbon tax in a bid to drive down emissions.
As part of its ongoing “Planet Passionate” plan, which aims to cut the company’s emissions by 90 per cent by the end of the decade, the firm said that since January it had adopted a new internal carbon pricing scheme.
In practice, it means an emissions charge – charged at a rate of €70 per tonne of carbon emissions on the unit’s scope one and two emissions the previous year – will be deducted from the unit’s profits. Scope one are direct emissions from company-owned and controlled resources while scope two are indirect from the energy it purchases and uses.
Some of the more climate-conscious companies have been applying a voluntary cost of carbon within their own operations. This can either be in the form of a shadow or notional price added to transactions or, in Kingspan’s case, deducted from earnings, or by the adoption of an actual internal carbon tax where the business units are charged a real charge for every tonne of carbon dioxide emitted with the proceeds then contributing to a climate change fund, which is then used to invest in further carbon reducing measures.
Iseq-listed Kingspan published an update on its sustainability drive on Tuesday, noting the company had achieved a 26 per cent reduction in scope one and two emissions against its 2020 base year.
It has also made a 42 per cent reduction in the amount of waste sent to landfill and a 26 per cent increase in rainwater harvesting capacity compared to 2020.
In addition, it said estimated emissions savings benefit from Kingspan insulation systems sold in 2022 was 173 million tonnes of carbon emissions, enough to power a big airline for 15 years.
“As a group, Kingspan remains steadfast in our commitment to help accelerate progress towards a net zero emissions future,” Kingspan chief executive Gene Murtagh said.
As part of its update, the company also noted that it was continuing to make efforts to progress towards its verified science-based target to reduce absolute scope three emissions by 42 per cent by 2030, “as it continues to pursue its decarbonisation strategy for its key raw materials from its upstream supply chain”.
Scope three are emissions that are not produced by the company itself but those emanating from across the company’s value chain.
“By collaborating with suppliers on absolute carbon reductions across its value chain, Kingspan aims to reduce the carbon intensity of its key products and make progress towards its target of a 50 per cent reduction in product carbon intensity from its primary supply partners by 2030,” it said.
