What Does Canada’s Carbon Tax Mean for Your Supply Chain?

As much of the world edges ever forward to a carbon-neutral future, logistics and freighting professionals everywhere are scrambling to revisit their supply chains in an effort to avoid getting hit with some big bills.

Supply chain management is tough at the best of times, but when you throw a heap of rules and regulations regarding carbon emissions into the mix, it can start to feel overwhelming.

Canada’s Carbon Tax Bill is a prime example of how emission regulations can throw a spanner in the works. Ultimately, the bill benefits both the natural environment and the people of Canada, and since it’s not going away any time soon, if you hope to freight to and around the country, it’s best to figure out a solution.

If you’re trying to cut your logistical costs and manage supply chains in Canada, here are some important points to watch out for.

What Does the Tax Consist Of?

Since 2019, each jurisdiction in Canada has managed its own carbon tax pricing, and this tax is based on local needs or, in many cases, the federal pricing benchmark.

Carbon pricing refers to the amount of carbon emissions that are being released into the atmosphere via the consumption of fossil fuels.

The tax has risen every year since 2019, and the minimum cost applied by the federal government is now currently sitting at CA$50 in nearly every province.

Moreover, Canada has recently announced its plan to cut carbon emissions by 40% for 2030, and it plans to use tech to help it do this.

The rule is partly in place to help the country transition toward a greener future and to urge companies to recognise their responsibility to the environment.

Effects on the Cost of Freighting

What exactly does this mean for logistics and freighting? It means that it can get very expensive, very quickly, particularly for those wishing to get international shipping done to Canada.

Following the introduction of the Canadian Carbon Tax Bill, airfreighting and ocean freighting can be a good way to rack up some serious tax bills, as is operating a fleet of trucks across the country.

Plus, if your company emits over 50k tonnes in CO2 emissions, you could be eligible to pay further costs and be forced to report on your CO2 output levels.

The cost of fuel has increased considerably, too, making trucking substantially more expensive, with diesel consumption playing a huge role in overall operating expenses. When paired with the potential costs of truck emissions in general, transportation prices can get out of hand quickly.

How We Can Help

In order to successfully optimise your supply chain and begin to decarbonise your logistics endeavours to the best of your ability, you’ll first need to first measure your current output and find out which of your routes are causing the most emissions.

Our CO2 emissions calculator is designed specifically to help you do just that. Whether you’re transporting to Canada from the UK or you’re moving goods inside the country, our calculator can enable you to input every postcode in Canada.

Simply enter your starting point, your destination, and the weight of your goods, and our tool can work out your emissions in the blink of an eye. It’ll supply you with your CO2 emissions, your NOx emissions, and your PM emissions.

Once you’ve got the estimate, our calculator will let you know how many trees you’ll have to plant to offset your carbon footprint.

Our tool is accurate and able to deliver readings for ocean freight, rail, road, and airfreight, allowing you to develop a much deeper insight into how your supply chain is performing every step of the way.

A powerful CO2 emissions calculator for logistics can make your life as a supply chain manager much easier, and as you’ll likely know already, data is extremely important when developing a plan of any kind.

How to Adopt a Greener Supply Chain

There are more than a few ways you could think about reducing emissions across the board, not least of all by introducing greener fuel options.

This can greatly help with your ocean freight emissions, especially if you can opt for using low-sulphur fuel.

It’s also worth making sure your various carriers and business partners are doing all they can to reduce carbon emissions on their end of the supply chain. Working with sustainable providers on all fronts can help you reduce your emissions, hopefully saving you money in the long term.

The strongest supply chains are the most cohesive, so it’s important to make sure yours is working across the entire board.

It’s also worth thinking about using alternatives to airfreight, if possible, as airfreight emissions tend to be fairly extensive, and they add up before too long.

Don’t hesitate to utilise our calculator today; it can help you navigate the world of carbon emissions and give you the insight you need to improve your logistics.


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