The future of electric vehicle (EV) charging has finally come, yet the carbon credits market for EVs is still highly centralized and C+Charge aims to change that.

Big industry players such as Tesla has earned hefty income from selling carbon credits, making a total of ~5.4 billion to date. But the small ones like their consumers enjoy little to none of the rewards of their carbon reduction actions.

Democratizing Access to Carbon Credits Market

In 2022, the carbon credit industry is at around $851 billion in size. And with an average growth rate of 31% per year projected over the next few years, the market will reach $2.4 trillion in 2027.

Yet, participation in the carbon credits market remains limited to large corporations that are paying to pollute. Many firms that remove carbon from the air or invest in carbon offset activities also have a role in this near trillion-dollar industry.

But many people, especially small consumers, are still unfamiliar with the carbon credit market. One reason is because they don’t have the capital to access the market even if they also do carbon avoidance actions. One of them is driving an EV.

In the US, the average passenger vehicle releases 650g CO2/km. The government has plans to phase out fuel cars with EVs while Canada and European nations are also planning the same.

Unfortunately, there’s currently no set standard for EV charging customers and there’s also no uniform payment gateways available across different charging stations. Charging station owners and EV manufacturers do earn carbon credits but EV drivers don’t.

This is why C+Charge created a blockchain-backed solution to address such issues through its real-world dynamic utility token. The goal is to democratize access to the carbon credit market.

Democratization of the carbon credit industry plays a key part in its future growth. And cryptocurrency or blockchain technology will play a key role in promoting accessibility.

C+Charge seeks to bring more awareness and accessibility to the carbon credits markets. One way to do that is rewarding EV drivers with carbon credits as they charge their cars. The payment system is opening up to a greater number of EV consumers to drive demand.

C+Charge and GNT Carbon Credits

C+Charge is developing a peer-to-peer blockchain-based payment system designed to bring carbon credits to EV drivers like Tesla.

It intends to create a complete EV charging ecosystem that democratizes the carbon credit industry. At the same time, providing a revolutionary customer experience with a streamlined and transparent pricing and payment system.

And the platform also hopes its solution can attract a wave of new EV buyers with the prospect of being financially rewarded for reducing their carbon footprint by driving an EV. Here are the platform’s key features:

How C+Charge Works

C+Charge’s strategic partnership with Flowcarbon will provide tokenized carbon credits through Flowcarbon’s Goodness Nature Token ($GNT).

Drivers will use the C+Charge application to pay to charge their EVs using the native cryptocurrency CCHG. Then they will be rewarded with carbon credits in the form of $GNT. Tokenholders will also earn carbon credits from a percentage of transaction fees on a pro-rata basis.

GNT token represents a verified voluntary carbon credit backed by venture capital firms a16z Crypto, Samsung Next, and fund manager Invesco.

In essence, the more EV drivers charge and the more CCHG they spend, the more GNT they will earn. Plus, there’s a 1% tax on all transactions that C+Charge uses in buying carbon credits and then distributing them proportionately among token holders.

A unique feature of the C+Charge token ecosystem is that each time tokens are used to pay for a charge, they will be removed from circulation. This further gives a constant supply of demand in the network.

C+Charge Tokenomics

And as the charging stations grow, the number of tokens taken out of the system also increases, providing organic support.

Apart from being a payment platform for EV charging and a carbon credit tracker, C+Charge will also help users locate nearby charging stations and offer useful information. It will show real-time charger wait times and charging station technical diagnosis.

How to Invest in C+Charge Presale

To fund its development, C+Charge recently opened the pre-sale of its CCHG token. 40% of the token’s maximum supply of 1 billion will be available to the public over the next few weeks.

Currently, CCHG tokens are on offer for $0.013 each, but will increase to $0.02350 over the course of four presale stages.

With the high levels of interest in green projects, as seen by the recent success of the IMPT.io presale, investors must decide soon if they want to purchase tokens at a discounted rate. Doing so is easy.

Users just need either a Trust Wallet or MetaMask Binance Smart Chain crypto wallet. They need to fund the wallet, which also includes an option for a card. Then they have to connect their wallet on the C+Charge website.

Users will now have the option to buy CCHG tokens using either BNB or USDT on the Binance Smart Chain. They can then claim the tokens that will enter their wallet after the presale is over.

Spreading the rewards of sustainable mobility with carbon credits, improving the environment, and reducing emissions on a global scale are what led to the C+Charge revolution.

Companies with internal carbon pricing say this tool allows them to assess the financial implications of their carbon emissions and incentivizes them to shift to low-carbon initiatives. It also complements the emissions reduction regulations by governments under which businesses are subject to.

Others even lauded that an internal carbon price or tax helps them in achieving their climate goals while addressing shareholders’ concern about disclosure. While some businesses use it to help them prepare for future policies on carbon emissions.

So, what is internal carbon pricing (ICP)? How does an internal carbon price work for a company? Do businesses really pay for their emissions via a carbon tax? This comprehensive guide will answer all these questions and more about internal carbon pricing.

What is Internal Carbon Pricing?

The heavy emitting sectors have been using a business carbon pricing as part of their risk mitigation strategy since the 1990s. In particular, firms in the oil and gas, minerals and mining, and the power sectors are using this pricing tool to place a value on their carbon emissions in a manner that drives positive change in their business.

When an internal carbon price is set, a cost is assigned to every ton of carbon emitted. Companies can then factor that cost into their business or investment decisions, encouraging efficiency and low-carbon innovation.

According to 2016 disclosures to CDP (Carbon Disclosure Project), over 1,200 companies worldwide are either looking to set an internal business carbon pricing or preparing to do so. Most of them are in Europe and North America but businesses in emerging economies such as China, India, and Brazil have seen the highest increase in ICP use.

And as companies are getting more serious about taking climate actions, internal carbon pricing also becomes more vital in helping the world transition to a low-carbon economy in 2023 and beyond.

If your company is also considering having an internal carbon price in place, then you need to know that it comes in three major types.

3 Types of ICP

There’s no definitive answer on what your company’s carbon price should be. Plus, there are also many different ways that the cost of carbon can be integrated into your business operations.

That only means that the best starting point for your business when pursuing internal carbon pricing is to understand your own drivers for it. To help you with this, here are the forms of internal carbon price you can consider.

Internal Carbon Tax

An internal carbon tax is a monetary value on each ton of carbon emitted by your business activities. This is readily understandable throughout your company. You just have to keep a record of and report those activities.

The collected fee becomes a revenue that your company can use to fund its emissions reduction efforts. While there’s no exact amount of tax to follow, the internal carbon fee you can charge ranges from $5-$20 per metric ton.

Setting the fee requires consideration of all internal factors across the business impacting the tax levied. The practicalities involved as to how the money can be collected should also be considered.

An alternative to imposing an internal carbon tax is designing an emissions trading system such as the EU ETS. It works like the cap-and-trade schemes used by the governments today.

It’s basically placing a limit or cap on how much carbon can a business unit or activity emit. Any excess will be charged accordingly by how much is the value of each ton. Typically, the price is set much lower than a shadow cost price.

Shadow Carbon Price

This internal carbon pricing sets a theoretical or assumed cost per ton of carbon. Not being a real price, this may be easier to implement as there’s no need to make changes in your business unit budgets or financial allocations.

Under this pricing method, a cost of carbon is determined within business processes which include:

business case assessments,
procurement procedures, or
business strategy development.

The goal is to show the cost of the carbon implications of those business decisions, which can then be communicated to stakeholders.

Usually, a shadow price is set higher than an internal carbon tax to reflect the expected future price of carbon. It varies a lot, from $2 to ~$800 per ton.

Shadow cost pricing helps your business understand carbon risk and prepare appropriately. And that’s before the hefty shadow price becomes a real carbon price.

Implicit Carbon Price

An implicit price is based on how much a company spends to cut carbon emissions on projects like renewable energy. It also takes into account costs of complying with certain government regulations.

Any firm with climate related goals has an implicit price on carbon emissions. The prices can even appear several times within the same company. You can use them to specifically identify which costs to minimize and better know your emissions.

You can even use this price as a basis for determining and launching an internal carbon price for your business.

Though each type of internal carbon pricing varies, many companies use a hybrid of approaches combining their different attributes.

But how exactly does an internal carbon price work for your company? Why is establishing it important for your business? Let’s break it down in the next section.

How Does an Internal Carbon Price Work For a Company?

Right now, there are no international standards that businesses should meet when setting up their internal price on carbon. So how it works for your company is really up to you.

And despite lack of standards and regulations, opting to implement an internal price is beneficial for many reasons.

After all, there are some helpful guides and initiatives you can still look to such as the Caring for Climate initiative from the UN Global Compact. It encourages firms to become a Carbon Pricing Champion by setting an internal carbon price, communicating progress, and advocating for its importance.

Also, Canada recently launched its Global Carbon Pricing Challenge at COP27 climate summit in Egypt. It makes existing pricing systems more effective and support other nations when adopting carbon pricing.

Internal carbon pricing helps companies in managing their climate-related business risks. ICP can also serve as an important risk-mitigation tool with multiple benefits beyond your company’s operations, customers, and communities.

The signals are out there that carbon risks are real and they’re coming fast.

Last year, the Bank of England warned businesses to be ready to pay for carbon prices that can soar up to $100/ton. Likewise, the UK government also requires companies to report on their carbon-related risks by 2050.

Moreover, governments have been busy closing deals in line with their Paris climate goals. And the recent COP27 summit closed a lot of those deals, prompting countries to introduce carbon pricing mechanisms as part of their decarbonization strategy.

What that means is that the timeline for a change is now clearer than ever.

The best part? Your company will not only be prepared for that change but will also enjoy the benefits of having an internal carbon pricing system.

The Benefits of ICP

The drivers of ICP are specific to each company but in general, it brings the following major advantages.

Prepares for future regulation

Firms that track their GHG emissions and implement an internal price on carbon are better prepared for a regulatory future in which carbon is priced. In a sense, the mechanism helps your company in de-risking against future carbon price and future-proofing its business strategy.

Addresses sourcing requirements

Companies that source or operate internationally are exposed to certain carbon pricing standards. This makes them a subject to the existing global patchwork of carbon emissions regulations. So, if you intend to operate globally, it’s a good idea to start calculating, monitoring, and pricing carbon emissions to make it easier to work your way around international pricing policies.

Promotes carbon innovation and efficiency

Pricing carbon bolsters innovation and efficiency improvements, provides a new lens for capital investment decisions, and inspires carbon efficient technologies. It also makes emissions intensive business practices more costly, urging firms to avoid them.

Plus investors are starting to prioritize ventures that promote corporate sustainability, including internal carbon pricing, and are increasingly investing in them. So, it generates finance for sustainability initiatives.

Broadly speaking, ICP also helps make carbon considerations more central to business operations while enabling companies to respond to investors’ concerns on climate.

Given these benefits, do businesses pay a carbon tax? Or better yet, do they really have to pay for their carbon emissions with a tax?

Do Businesses Pay a Carbon Tax?

A carbon tax is considered as an essential policy tool to control carbon emissions: high prices for carbon-emitting products and services reduce demand for them.

A carbon tax is generally levied on fossil fuels that businesses have to pay. While most companies are emitting carbon and other GHGs, not all of them are paying carbon taxes.

According to the World Bank, there are 68 direct carbon pricing instruments operating as of June 2022 in 46 national jurisdictions around the world. These comprise 36 carbon tax regimes and 32 emissions trading systems (ETS).

Source: World Bank

ETS are tradable-permit systems which set a cap on the amount of greenhouse gasses that can be emitted. Businesses and entities have the flexibility of buying and selling emissions units, popularly known as carbon credits.

Some countries have already adopted a carbon tax while discussions are ongoing in others. There are also proponents of setting up a global carbon tax. But governments often prefer to use measures other than a tax to contain emissions for some reasons.

For example, mandating carbon taxes can be politically difficult because some sectors of the business community may oppose such a tax for financial reasons. Carbon taxes are also often regarded as regressive as they can penalize poorer members of society by contributing to price rises.

Another complicating factor is the so-called “carbon-leakage”. This means businesses may try to move their operations to other countries with less strict emissions policies. This can still increase the countries’ total emissions.

And among countries that have a carbon tax, the levels vary a lot and other measures exist alongside it. ETS is one of them as aforementioned as well as internal carbon pricing.

So what companies have an internal carbon tax or price in place?

Companies With Internal Carbon Pricing Programs

Business carbon pricing becomes most meaningful if it’s embedded into a company’s business strategy.

Some firms use revenue from its internal carbon tax to fund projects that reduce emissions such as renewable energy and energy efficiency. Popular names include Microsoft, Shell, BP PLC or British Petroleum, and more.

Others are also embedding a shadow price in their strategies by shifting investments into low-carbon assets. More and more businesses follow in their footsteps and experiment with internal carbon pricing.

In Europe, ICP was a key factor in an energy firm’s decision to close several of its power plants. In the U.S. some financial services companies use internal carbon pricing to identify high-return, low-carbon investment opportunities.

But a question rises if their pricing thresholds are correct.

A leading management consulting firm McKinsey & Company looked at data from companies that have disclosed internal carbon pricing programs. Their analysis revealed that there’s growing interest and varied ways in how companies use these pricing mechanisms.

In particular, 23% of around 2,600 companies said that they’re using an internal carbon tax or fee while 22% of them plan to do so in the next 2 years.

The top firms that reported the most were from the energy, materials, and financial industries, and then followed by the technology and industrial sectors.

A geographic analysis shows that 28% of companies in Europe are using an internal carbon price. Japan (24%), the UK (20%), and the U.S. (15%) have the highest percentages of companies using the pricing mechanism.

The findings also show that price thresholds per ton of carbon used vary widely by industry and region.

For instance, in Asia it’s only $18/ton while it’s higher in Europe, $27/ton. With this, companies are choosing values that are most useful for their regions and business contexts.

The chart below reveals the high variability of internal carbon prices within and between regions and industries.

To address this huge difference in the internal cost of carbon, attempts are underway to help firms determine optimal pricing standards. Some industry groups suggested potential pricing levels ranging from a few dollars to above $100/ton.

Yet, the issue remains a topic for debates.

Nonprofits argue that the social cost of carbon is far above $50/ton of emissions. Others further said that such a number is far lower than it should be as it doesn’t include significant impacts of climate change.

In the U.S., researchers determined that the social cost of carbon in the country should be at $185/ton. That’s over 3x than the current social cost of carbon which is a $51/ton.

Meanwhile, an expert group estimates that companies need to set internal carbon pricing between $40/ton and $80/ton in 2020. But that should go up between $50/ton and $100/ton by 2030 to reduce emissions in line with the Paris Agreement.

In contrast, the majority of the companies that have internal carbon pricing in place have thresholds at about $40/ton only.

Accounting for carbon emissions and paying for it is just one way for companies to manage climate-related risks, strengthen corporate values, and improve their investment decision making. But it’s a good step to take.

To date, internal carbon pricing initiatives by companies impact 22% of global GHG emissions, up from 15% in 2017. But as the analysis suggests, their pricing thresholds are far lower than they should be to account for all the costs of emitting carbon.

So, if companies want their business decisions to completely reflect the real costs of carbon emissions, they should take a closer look at their existing internal carbon pricing programs and then re-assess them.

This means you should do more research and analysis of your own business operations before deciding how much to pay and then make the first move, which is calculating the price of carbon your company should set internally.

Calculating Internal Carbon Price

This can be done in many ways. One way is by referencing externally published sources to reflect the associated risks. Examples of these are the UK Green Book guidance or the CDP Carbon Pricing Corridors.

You can also link them to determining the cost of carbon offsets you plan to use. They are credits you can buy to neutralize emissions that your company can’t avoid or reduce. This can go when considering a shadow price.

When it comes to measuring an implicit carbon price, it is based on an understanding of how much your company spends on reducing GHG emissions. This is necessary to know where carbon is emitted the most in your business and cut them appropriately.

If you want to go for a more complex method of including the social cost of carbon in your internal pricing, then you have to factor in all the quantifiable costs of emitting a ton of CO2. This method will take in a much wider range of social impacts into your calculation.

Overall, regardless of which form of internal carbon pricing your company chooses to take, pursuing it may worth your time and effort. After all, setting a price on carbon seems to be the inevitable future of doing business to keep the planet from heating up.

Should you want to learn more about carbon pricing in general and how it works, just take a few more minutes and read our guide here.

Carbon credit transaction network Carbonplace formed by nine global banks including UBS Group AG and Canadian Imperial Bank of Commerce will launch early 2023 after going through pilot trades.

The new platform, Carbonplace, is a global carbon credit transaction network that will enable the simple, secure, and transparent transfer of certified carbon credits. It has settled pilot trades of environmental credits in Australia, Brazil, Singapore, and the UK.

Carbon credits can help channel large-scale investments needed to fund carbon reduction and removal projects.

As per BloombergNEF, demand for carbon credits can grow ~40x in the next three decades. This is due to companies’ use of credits as part of their 2050 net zero emissions strategy.

Unfortunately, the business of trading the credits has been criticized because of some firms using low-quality carbon credits to offset their emissions. Plus, the voluntary carbon market (VCM) relies on bilateral trading that’s often slow, opaque, and risky. These reduce trust in the market.

This is where Carbonplace comes in. The platform will only settle trades of credits that are verified by top carbon registries, such as Verra and American Carbon Registry.

Carbonplace and How it Works

Carbonplace’s unique blockchain-enabled technology will significantly change how carbon credits are bought and sold. It works similarly to Xpansiv CBL carbon market platform, the most dominant player today.

The trading process of Carbonplace includes procedures dealing with money-laundering and anti-fraud regulations.

Backed by large banks with a global client base, Carbonplace will have the ability to connect the markets, registries and exchanges of the VCM directly to millions of customers in various markets as shown in the map.

The carbon credit network’s member banks or founding partners include:

National Australia Bank
CIBC
UBS
Natwest Group Plc
Itaú Unibanco
Standard Chartered
BNP Paribas
Sumitomo Mitsui Banking Corporation (SMBC)
BBVA

They all share a common ambition to support urgent, large-scale climate action. They recognize the need for strong collaboration between the financial sector and other carbon market participants to bring trust, transparency, and accessibility to the VCM.

As to how Carbonplace works, the product’s chief officer Robin Green said:

“Think of it like eBay… We are just broadening the access to the market by providing transparency and trust. It’s not that you can’t buy credits right now, but we are really simplifying the process.”

The network will deliver those essential elements of a growing VCM with these three values:

It’s simple. The Carbonplace Rulebook will see to it that all members of the platform follow a single set of prudential rules, which removes the need for bilateral contracts between buyers and sellers. This makes it possible to retire credits within minutes and reduce the burden of individual transactions.

It’s secure. The network’s robust KYC will deliver another level of security. It enables customers to rely on the banks they already trust for settlement purposes.

It’s transparent. Carbonplace’s full ledger, audit, and reporting functionality will manage the carbon credit lifecycle from inception until retirement. This provides reliable records of ownership of carbon credits and reduces the risks of double counting.

Where Two Worlds Meet: Carbon Markets and Banking

Carbonplace is a place where the emerging world of carbon markets meets the established world of banking. How that looks is like this.

The instant, secure, and traceable settlement of carbon credit transactions via a secure, distribution network is critical in scaling the VCM.

The pilot trades on the Carbonplace network involved selling carbon credits from Carbon Growth Partners in Melbourne and Sustainable Carbon in Sao Paulo to banks.

The market for carbon sequestration has enjoyed an exponential growth in recent years, attracting vast interest from investors and governments. The main reason is that carbon sequestration technologies are not just beneficial to honoring our climate commitments, but crucial.

The Paris Agreement signed in 2016 set out an ambitious goal: to ensure that an increase in the average global temperature stays under 2C, ideally 1.5C. This means that we can only afford to emit 400 gigatons of carbon emissions to stay under this limit.

What countries around the world have discovered is that this goal is not achievable by implementing renewable technologies alone. The pace of developing renewable technologies cannot keep up with the rate at which the world is emitting carbon dioxide.

Hence, carbon sequestration and removal needs to scale up significantly to remove existing emissions and halting continuing carbon emissions.

Scientists estimated that the world has to remove up to 10 GtCO2 annually from the atmosphere by 2050 to decarbonize. That removal capacity should double per year by 2100 as shown in the chart below.

Source: IPCC Report

The current carbon removal and sequestration market explores a broad range of technologies. This includes capturing carbon dioxide using large fans, changing the pH of the ocean to store more CO2 to recycling carbon emissions in cement production.

Here are the top 5 carbon sequestration companies to watch for in 2023:

Aker Carbon Capture

Location: Norway, Northern Europe

Founded: 2020

A subsidiary of Aker Solutions, Aker Carbon Capture is one of the largest and most established of the carbon sequestration companies.

It is one of the few publicly traded companies in the sector. It was listed in the Oslo Stock Exchange in 2020, and has a current market cap value of $750.65 million.

The company uses their proprietary carbon capture solution to capture CO2 from waste flue gases from a variety of industries such as oil refineries and cement plants. Its key offerings include modular solutions that are easy to transport and install. They also offer offshore and integrated solutions.

Though it was only established in 2020, it uses technology that has been developed by Aker for over 10 years. One of their current key projects is the Brevik cement plant which has a CO2 sequestration capacity of 400,000 tons per annum.

Climeworks

Location: Switzerland

Founded: 2009

Climeworks is another established carbon sequestration company that uses direct air capture (DAC). The company recently raised $650 million in funding, the largest ever for a startup in the carbon removal sector.

It uses its modular CO2 collectors, where large industrial fans draw in CO2-containing air into the plant, and a CO2-selective filter separates the carbon dioxide.

So far, Climeworks has sold the collected CO2 to greenhouses and carbonated beverage companies. Recently, it has taken a step further and partnered with another carbon sequestration company called Carbfix to permanently store this CO2 instead of reselling it.

It launched its carbon capture and storage facility called Orca in 2021, in partnership with Carbfix. The facility has the capacity to capture around 4,000 tons of carbon per annum. To date, it is the only direct air capture plant that permanently sequesters the CO2 instead of recycling it.

Carbon Clean

Location: London, UK

Founded: 2009

To date, Carbon Clean has used its proprietary carbon capture process technology to sequester 588 metric tons of CO2. It has raised a total of $212 million in funding.

One of its key partnerships is the industrial-scale carbon capture and utilization plant in Chennai, India which has an annual capacity to capture 60,000 tons of CO2.

In 2021, the company launched its new solution, CycloneCC, which can achieve over 90% carbon capture rates. The company also prides itself on being cost-effective, as they claim they can capture CO2 for less than $30 per metric ton.

Carbfix

Location: Reykjavik, Iceland

Founded: 2006

Carbfix is a leading player in the carbon sequestration sector due to its novel carbon capture and storage technology. Carbfix’s technology aims to permanently store captured CO2 underground in rocks. Unlike other solutions in the sector, where the CO2 needs recycling, Carbfix offers a more permanent carbon sequestration solution.

Its key projects and partnerships with Climeworks are the aforementioned Orca plant and the EU-funded Arctic Fox pilot plant. To date, the company has raised $117 million in funding.

Carbon Engineering

Location: Vancouver, Canada

Founded: 2009

Carbon Engineering is another big name in the sector that has raised a total funding worth $110 million. Its unique liquid DAC process that uses potassium hydroxide solution to capture CO2 has earned trusts and investments from Bill Gates, Chevron, Occidental, Airbus, Air Canada, and more.

Carbon Engineering licensed its DAC technology to 1PointFive, aiming to build a megaton scale plant in the Permian Basin, U.S., capable of capturing 1 million tons of CO2/year in 2024.

What makes it stand out from other carbon sequestration companies is that apart from its DAC plants, it also has air-to-fuels plants that can deliver global-scale quantities of clean fuels using captured CO2. These facilities will be operational in 2026.

Carbon Sequestration Companies for Net Zero

Carbon capture or DAC plays an important role in meeting net zero emissions goals. In fact, the world needs the services of the carbon sequestration companies to bring the global energy system to net zero by 2050. Here’s the potential of these technologies in reaching net zero.

Estimations by the International Energy Agency showed that DAC can capture over 85 million tons of CO2 in 2030 and 980 million in 2050. But that needs a lot of work to do from those top carbon sequestration companies to help scale up the sector.

The good news is that the mega trend today indicates high regard for more investments in the space both from the public and private sectors. And through these carbon capture and removal technologies, businesses can meet and perhaps exceed their net zero targets.