Calculation of Carbon Costs Using Activity-Based Costing: A Case Study of a Manufacturing Business

Şahay Ok; Hakan Vargün

Article Details

Calculation of Carbon Costs Using Activity-Based Costing: A Case Study of a Manufacturing Business

Authors:

Şahay Ok | Hakan Vargün

Publisher:

Hitit University

Main Topics:

Sürdürülebilirlik Muhasebesi ve Raporlama

Journal:

Hitit Sosyal Bilimler Dergisi Vol.17 Issue 3, pp.440-461

Document Type:

Article

Publication Date:

12/2024

Document Language:

Turkish

Document ID (Org No.):

2001331361

pISSN:

2757-7449

Keywords:

Abstract:

 The aim of this study is to calculate the carbon emission amounts and emission costs of an enterprise operating in the iron and steel sector on the basis of activities and products with the Activity Based Costing ABC System. Thus, the calculation of the share of carbon cost in operating expenses with the ABC system is considered to be an important factor that can affect the preferences of the management in product production decisions. The main reason for the selection of the iron and steel sector in this study is the significant impact of the sector on carbon emissions on a global scale; since this sector causes approximately 7 of carbon emissions worldwide International Energy Agency, 2020. The data in the study were obtained from the accounting documents of an enterprise operating in the sector, field research and meetings with the management. In the study, the carbon footprint and carbon costs of each activity centre carried out in the enterprise were determined. While determining the carbon footprints of the activity centres, CO2, CH4 and N2O greenhouse gases determined in the Kyoto Protocol were taken into consideration. The emission factors required to monitor these gases were obtained from Greenhouse Gas GHG, UK Government GHG Conversion Factors for Company Reporting and previous academic studies in this field. With the help of activity data and emission factors, the amount of carbon emissions occurring in the production activities of the enterprise was determined. In order to calculate the carbon emission cost, the carbon price subject to trading in the Emission Trading System was determined and the costs of carbon emissions collected in the activities were calculated. The findings obtained from the study are as follows: In 2021, 671.39 tonnes of the Raw Material Storage Activity Centre, 1,158.59 tonnes of the Billet Cutting and Furnace Preparation Activity Centre, 27,684.14 tonnes of the Annealing Activity Centre, 6,042.46 tonnes of the Rolling Activity Centre, 1,483.39 tonnes of the Finished Product Cutting Activity Centre, 1.483.39 tonnes, Straightening Activity Centre 3,037.93 tonnes, Finished Product Storage Activity Centre 833.63 tonnes, Maintenance and Repair Activity Centre 1,565.93 tonnes, and Shipment Activity Centre 5,303.64 tonnes, resulting in 47,781.10 tonnes of carbon emissions in total. On the basis of the products produced in the enterprise, it was calculated that UAC Profile 0.882 tonnes, Equilateral Angle Iron 0.663 tonnes, Lama Iron 0.425 tonnes, Square Iron 0.616 tonnes, Round Iron 0.226 tonnes of carbon emissions per unit. As a result of these calculations, the carbon cost incurred by the enterprise is 12,554,484.03 TL. When evaluated on the basis of the products produced in the enterprise, it was determined that UAC Profile 231,75 TL, Equilateral Angle Iron 174,20 TL, Lama Iron 111,67 TL, Square Iron 161,85 TL tonnes, Round Iron 59,38 TL carbon cost. As a result of the study, it is seen that the carbon cost incurred by the enterprise corresponds to approximately 14 of the manufacturing overheads incurred in the enterprise in 2021.

 The aim of this study is to calculate the carbon emission amounts and emission costs of an enterprise operating in the iron and steel sector on the basis of activities and products with the Activity Based Costing ABC System. Thus, the calculation of the share of carbon cost in operating expenses with the ABC system is considered to be an important factor that can affect the preferences of the management in product production decisions. The main reason for the selection of the iron and steel sector in this study is the significant impact of the sector on carbon emissions on a global scale; since this sector causes approximately 7 of carbon emissions worldwide International Energy Agency, 2020. The data in the study were obtained from the accounting documents of an enterprise operating in the sector, field research and meetings with the management. In the study, the carbon footprint and carbon costs of each activity centre carried out in the enterprise were determined. While determining the carbon footprints of the activity centres, CO2, CH4 and N2O greenhouse gases determined in the Kyoto Protocol were taken into consideration. The emission factors required to monitor these gases were obtained from Greenhouse Gas GHG, UK Government GHG Conversion Factors for Company Reporting and previous academic studies in this field. With the help of activity data and emission factors, the amount of carbon emissions occurring in the production activities of the enterprise was determined. In order to calculate the carbon emission cost, the carbon price subject to trading in the Emission Trading System was determined and the costs of carbon emissions collected in the activities were calculated. The findings obtained from the study are as follows: In 2021, 671.39 tonnes of the Raw Material Storage Activity Centre, 1,158.59 tonnes of the Billet Cutting and Furnace Preparation Activity Centre, 27,684.14 tonnes of the Annealing Activity Centre, 6,042.46 tonnes of the Rolling Activity Centre, 1,483.39 tonnes of the Finished Product Cutting Activity Centre, 1.483.39 tonnes, Straightening Activity Centre 3,037.93 tonnes, Finished Product Storage Activity Centre 833.63 tonnes, Maintenance and Repair Activity Centre 1,565.93 tonnes, and Shipment Activity Centre 5,303.64 tonnes, resulting in 47,781.10 tonnes of carbon emissions in total. On the basis of the products produced in the enterprise, it was calculated that UAC Profile 0.882 tonnes, Equilateral Angle Iron 0.663 tonnes, Lama Iron 0.425 tonnes, Square Iron 0.616 tonnes, Round Iron 0.226 tonnes of carbon emissions per unit. As a result of these calculations, the carbon cost incurred by the enterprise is 12,554,484.03 TL. When evaluated on the basis of the products produced in the enterprise, it was determined that UAC Profile 231,75 TL, Equilateral Angle Iron 174,20 TL, Lama Iron 111,67 TL, Square Iron 161,85 TL tonnes, Round Iron 59,38 TL carbon cost. As a result of the study, it is seen that the carbon cost incurred by the enterprise corresponds to approximately 14 of the manufacturing overheads incurred in the enterprise in 2021.

 The aim of this study is to calculate the carbon emission amounts and emission costs of an enterprise operating in the iron and steel sector on the basis of activities and products with the Activity Based Costing ABC System. Thus, the calculation of the share of carbon cost in operating expenses with the ABC system is considered to be an important factor that can affect the preferences of the management in product production decisions. The main reason for the selection of the iron and steel sector in this study is the significant impact of the sector on carbon emissions on a global scale; since this sector causes approximately 7 of carbon emissions worldwide International Energy Agency, 2020. The data in the study were obtained from the accounting documents of an enterprise operating in the sector, field research and meetings with the management. In the study, the carbon footprint and carbon costs of each activity centre carried out in the enterprise were determined. While determining the carbon footprints of the activity centres, CO2, CH4 and N2O greenhouse gases determined in the Kyoto Protocol were taken into consideration. The emission factors required to monitor these gases were obtained from Greenhouse Gas GHG, UK Government GHG Conversion Factors for Company Reporting and previous academic studies in this field. With the help of activity data and emission factors, the amount of carbon emissions occurring in the production activities of the enterprise was determined. In order to calculate the carbon emission cost, the carbon price subject to trading in the Emission Trading System was determined and the costs of carbon emissions collected in the activities were calculated. The findings obtained from the study are as follows: In 2021, 671.39 tonnes of the Raw Material Storage Activity Centre, 1,158.59 tonnes of the Billet Cutting and Furnace Preparation Activity Centre, 27,684.14 tonnes of the Annealing Activity Centre, 6,042.46 tonnes of the Rolling Activity Centre, 1,483.39 tonnes of the Finished Product Cutting Activity Centre, 1.483.39 tonnes, Straightening Activity Centre 3,037.93 tonnes, Finished Product Storage Activity Centre 833.63 tonnes, Maintenance and Repair Activity Centre 1,565.93 tonnes, and Shipment Activity Centre 5,303.64 tonnes, resulting in 47,781.10 tonnes of carbon emissions in total. On the basis of the products produced in the enterprise, it was calculated that UAC Profile 0.882 tonnes, Equilateral Angle Iron 0.663 tonnes, Lama Iron 0.425 tonnes, Square Iron 0.616 tonnes, Round Iron 0.226 tonnes of carbon emissions per unit. As a result of these calculations, the carbon cost incurred by the enterprise is 12,554,484.03 TL. When evaluated on the basis of the products produced in the enterprise, it was determined that UAC Profile 231,75 TL, Equilateral Angle Iron 174,20 TL, Lama Iron 111,67 TL, Square Iron 161,85 TL tonnes, Round Iron 59,38 TL carbon cost. As a result of the study, it is seen that the carbon cost incurred by the enterprise corresponds to approximately 14 of the manufacturing overheads incurred in the enterprise in 2021.

 Bu çalışmanın amacı demir çelik sektöründe faaliyet gösteren bir işletmenin karbon emisyon miktarlarını ve emisyon maliyetlerini Faaliyet Tabanlı Maliyetleme FTM Sistemi ile faaliyetler ve mamuller bazında hesaplamaktır. Böylece FTM sistemiyle karbon maliyetinin işletme giderleri içindeki payının hesaplanması, mamul üretim kararlarında yönetimin tercihlerini etkileyebilecek önemli bir faktör olacağı değerlendirilmektedir. Demir çelik sektörünün bu çalışmada seçilmesindeki başlıca etken, sektörün küresel ölçekte karbon emisyonuna yaptığı önemli etkidir; zira bu sektör, dünya genelindeki karbon emisyonlarının yaklaşık 7sine sebebiyet vermektedir International Energy Agency, 2020. Çalışmadaki veriler sektörde faaliyet gösteren bir işletmenin muhasebe dokümanlarından, saha araştırmalarından ve yönetimle yapılan toplantılar neticesinde ortaya çıkmıştır. Çalışmada işletmede gerçekleştirilen her bir faaliyet merkezinin karbon emisyonu ve karbon maliyetleri belirlenmiştir. Faaliyet merkezlerinin karbon emisyonları belirlenirken Kyoto Protokolünde belirlenen CO2, CH4 ve N2O sera gazları dikkate alınmıştır. Bu gazların takip edilebilmesi için gerekli olan emisyon faktörleri ise Greenhouse Gas GHG, UK Government GHG Conversion Factors for Company Reporting ve daha önce bu alanda yapılan akademik çalışmalardan elde edilmiştir. Faaliyet verileri ve emisyon faktörleri yardımıyla işletmenin üretim faaliyetlerinde meydana gelen karbon emisyon miktarları belirlenmiştir. Karbon emisyon maliyetinin hesaplanabilmesi için Emisyon Ticaret Sisteminde alım-satıma konu olan karbon fiyatı tespit edilerek faaliyetlerde toplanan karbon emisyonlarının maliyetleri hesaplanmıştır. Çalışma ile elde edilen bulgular şöyledir: 2021 yılında söz konusu işletmenin Hammadde Depolama Faaliyet Merkezinin 671,39 ton, Kütük Kesim ve Fırın Hazırlık Faaliyet Merkezinin 1.158,59 ton, Tavlama Faaliyet Merkezinin 27.684,14 ton, Haddeleme Faaliyet Merkezinin 6.042,46 ton, Mamul Kesim Faaliyet Merkezinin 1.483,39 ton, Doğrultma Faaliyet Merkezinin 3.037,93 ton, Mamul Depolama Faaliyet Merkezinin 833,63 ton, Bakım Onarım Faaliyet Merkezinin 1.565,93 ton, Sevkiyat Faaliyet Merkezinin ise 5.303,64 ton olmak üzere toplamda 47.781,10 ton karbon emisyonuna sebebiyet verdiği hesaplanmıştır. İşletmede üretilen ürünler bazında birim başına UAC Profil 0,882 ton, Eşkenar Köşebent 0,663 ton, Lama Demir 0,425 ton, Kare Demir 0,616 ton, Yuvarlak Demir 0,226 ton karbon emisyonuna neden oldu hesaplanmıştır. Yapılan bu hesaplamalar neticesinde işletmenin katlanmış olduğu karbon maliyeti ise 12.554.484,03 TLdir. İşletmede üretilen mamuller bazında değerlendirildiğinde UAC Profil 231,75 TL, Eşkenar Köşebent 174,20 TL, Lama Demir 111,67 TL, Kare Demir 161,85 TL ton, Yuvarlak Demir 59,38 TL karbon maliyete sebep olduğu tespit edilmiştir. Çalışma sonucunda işletmenin katlanmış olduğu karbon maliyeti, 2021 yılında işletmede gerçekleşen genel üretim giderlerinin yaklaşık olarak 14üne denk geldiği görülmektedir.

Article Details

Calculation of Carbon Costs Using Activity-Based Costing: A Case Study of a Manufacturing Business

Authors:

Şahay Ok | Hakan Vargün

Publisher:

Hitit University

Main Topics:

Sürdürülebilirlik Muhasebesi ve Raporlama

Journal:

Hitit Sosyal Bilimler Dergisi Vol.17 Issue 3, pp.440-461

Document Type:

Article

Publication Date:

12/2024

Document Language:

Turkish

Document ID (Org No.):

2001331361

pISSN:

2757-7449

Sustainabilitiy

Carbon Emissions

Carbon Accounting

Carbon Pricing Activity Based CostingSürdürülebilirlik

Karbon Emisyonları

Karbon Muhasebesi

Karbon Fiyatlama

Faaliyet Tabanlı Maliyetleme

Issues

Article Details

Authors: Şahay Ok | Hakan Vargün

Publisher: Hitit University

Main Topics: Sürdürülebilirlik Muhasebesi ve Raporlama

Journal: Hitit Sosyal Bilimler Dergisi Vol.17 Issue 3, pp.440-461

Document Type: Article

Publication Date: 12/2024

Document Language: Turkish

Document ID (Org No.): 2001331361

pISSN: 2757-7449

Issues

Authors:

Şahay Ok | Hakan Vargün

Publisher:

Hitit University

Main Topics:

Sürdürülebilirlik Muhasebesi ve Raporlama

Journal:

Hitit Sosyal Bilimler Dergisi Vol.17 Issue 3, pp.440-461

Document Type:

Article

Publication Date:

12/2024

Document Language:

Turkish

Document ID (Org No.):

2001331361

pISSN:

2757-7449