Landsvirkjun has implemented the use of internal carbon pricing to support its objective of becoming carbon neutral in 2025.
Internal carbon prices create incentives to make financial and operational decisions based on low-carbon solutions.
What are internal carbon prices?
Internal carbon prices set a price target for calculated emissions, per tonne of carbon dioxide (CO2) and equivalents, in the Company's operations.
The cost of emissions is therefore accessible to anyone making decisions within the Company. This means that emissions - or rather future emissions costs - are calculated as part of major financial decisions, ranging from the purchase of supplies to the selection of new power projects.
Landsvirkjun‘s internal carbon prices for 2020 are 33 $/tonnes CO2.
Our internal carbon prices are based on extensive analyses and data collection and reflect the cost of the resources available to us to achieve the goal of carbon neutrality.
The use of internal carbon prices will help us prioritise the procurement of products with a lower carbon footprint. This means that the purchase of a more expensive product is justified if that product has a sufficiently low carbon footprint when compared with cheaper options.
Our operations will become carbon neutral in 2025, and the introduction of internal carbon prices will play a key part. Emissions are costs we intend to reduce and internal carbon prices help us to achieve this. Internal carbon prices create incentives to make financial and operational decisions based on low-carbon solutions.
Looking to the future
Landsvirkjun will become carbon neutral in 2025. This means that we are already committed to sequestering future emissions. Emissions that we prevent won’t need to be reduced in the future, and reducing our current emissions means that we won’t need to mitigate them in the future. This reduces costs and supports our social responsibility objectives. It also makes sense form a business standpoint, as informed decision making is a key factor in responsible operations.
Landsvirkjun is the first Icelandic company to use internal carbon prices
Internal carbon pricing is an optional decision-making tool that could have a far-reaching impact in the future. World nations, organisations and companies are increasingly aware of the fact that internal carbon pricing is one of the most effective ways to reduce global greenhouse gas emissions. This supports the global effort to tackle climate change.
Here you can download Landsvirkjun's Climate accounts for 2019.