CO2 Tracking in Europe: Expense Management Guide

Carbon emissions have a tremendous impact on the planet, contributing to global warming and climate change. As governments around the world introduce new regulations designed to curb the adverse effects of CO2, organisations respond by implementing novel approaches, processes, and tooling designed for tracking and reducing their carbon footprints.

For example, the global professional services company PwC has already begun to track employee CO2 emissions and developed the concept of a carbon ledger that makes ESG data actionable.

Monitoring and reporting on company CO2 emissions has become a key part of expense reporting for compliance. By adopting such tooling, organisations can achieve their sustainability goals while lowering costs and increasing operational efficiency thanks to sustainable expense management strategies.

What is the current state of regulations on carbon tracking, and how can organisations build sustainability into their expense management processes and tooling? Keep reading to find out.

Carbon Emission Regulations in Europe and the Netherlands

Climate change is a fact to which governments across Europe are responding in the form of new laws and regulations implemented to limit carbon emissions.

To combat climate change, the European Parliament passed the European Climate Law, which sets the EU's objective of reducing net greenhouse gas emissions by at least 55% by 2030 and legally binds the EU to achieve climate neutrality by 2050.

The Climate Law is a component of the European Green Deal, the EU's path to carbon neutrality. To achieve its climate objective, the EU has proposed a legislative package called Fit for 55 in 2030. It consists of multiple interconnected amended laws as well as new planned climate and energy regulations.

One example is The European Emissions Trading System (ETS), which encompasses over 10,000 power facilities and manufacturing industries throughout the EU. It aims to minimise carbon emissions in the sector by requiring organisations to have a permit for each tonne of CO2 emitted. Companies purchase them through auctions and are incentivised to push innovation in this area.

Carbon tracking in the Netherlands

Another example of a regulation is the "Environmental Decree on Limiting Carbon Dioxide Emissions from Traffic," introduced in the Netherlands in 2022. The decree aims to provide statistics on emissions in order to implement additional controls. These restrictions should result in a reduction in CO2 levels, allowing the country to meet its 2030 climate goals.

The Dutch government enforced a new law ("Rapportageverplichting werkgebonden personenmobiliteit" in Dutch) mandating companies with more than 100 employees to monitor, measure, and report on their employees' CO2 emissions (travel for business, including commute). This new rule went into "soft" effect on January 1st, 2023 and will be fully effective as of January 1st, 2024. Companies that exceed the maximum emissions level will be given four years to reduce their carbon footprint.

Such an approach will certainly be followed by other local European regulations. Cities like Brussels and Berlin already have "low emission zones" for automobiles. In addition, the automotive sector is under pressure to deliver exclusively low- to zero-emission vehicles in the future.

Expense Management and Carbon Tracking

Expense management is an important part of any business or organisation since it entails monitoring and regulating spending to ensure that it corresponds with the organisation's budget and goals.

With a growing emphasis on sustainability and environmental responsibility, building sustainability goals into expense management solutions is the next step.

Organisations, in particular, can have a long-term influence on their workers' CO2 emissions during business travel. Many begin with measuring and reporting their carbon impact, and tracking CO2 emissions becomes a part of their expense report compliance procedures.

By integrating expense management and carbon tracking, companies can shape their policies with a focus on sustainability:

• Encourage employees to choose more environmentally friendly travel options, such as the train or shared vehicles, by offering data on the CO2 emissions associated with each trip.
• Emphasise the type or mode of transportation that produces the least CO2 emissions for the journey and present employees with the "carbon cost" of a one-hour flight vs. a three-hour train journey
• Introducing incentives for employees, for example, a "CO2 budget" per employee where unused funds may result in attractive rewards.

Conclusion

In a world of data-driven decision-making, we have the tools at our disposal to identify the root causes of the most pressing issues and develop solutions. It only makes sense for organisations around the world to use digital technology tools to accelerate the transition to a carbon-neutral, waste-conscious, sustainable economy.

More and more businesses around the world will invest in carbon management software in the next few years to achieve their sustainability objectives, avoid the financial risk of carbon liabilities, build stronger management control over CO2 data, and meet new government requirements.

Our solution for easy carbon tracking

At Mobilexpense, we have built CO2 awareness into our product and help users streamline the process of expense report compliance, ensuring that they can benefit from accurate data on their carbon footprint and start taking action.

Using our solution, you can remain compliant and eco-conscious thanks to advanced CO2 emissions tracking for mileage expenses:

• Calculate precise emissions data based on specific vehicle models and exact mileages.
• Take advantage of public and regularly updated data from the Dutch RDW database.
• Enter license plates with confidence, knowing they will remain private and secure.

Once an employee enters their license plate, our solution takes care of the rest. Users can save time and avoid errors with options to prefill and sync license plates, ensuring that the CO2 emissions data is as accurate as possible.

Compliance is simple and uncomplicated thanks to detailed reports that offer insights at a glance. And you can easily share data in a CSV export that spans any time, ensuring you have the data you need at your fingertips, whether you need a monthly overview or an annual report.