According to developers, electric vehicle (EV) credits are expected to enter the market soon (once they are verified).
EV credits are carbon credits generated using EV charging systems, where GHG emission reductions are achieved by replacing vehicles that use traditional fossil fuels with electrified vehicles.
In 2018, global carbon standard, Verra, approved a methodology for EV charging systems that provides parameters for calculating emissions reductions.
While substantial supply is being built in the US, many sources have been calling it an ‘Asian phenomenon’. One of the reasons for this is the prevalence in Asia of two-wheeler and three-wheeler transportation and which has the potential for electrification. Capital expenditure in the charging/swapping networks can be expensive. In India, a charging, or a swapping station, can take anything from US$1.3-135k to set up. With unit charge point prices at US$0.20-0.27 per vehicle and US$0.47-0.67 for a swap, it can take several years to deliver a return. Corporates which operate in ride-share, or taxi apps, have demonstrated the most interest in these credits.
Despite substantial interest in India, domestic credits generated there are comparatively lower because the power grid is dependent on coal for generation and the current methodology cancels out credits when the electricity source is not clean. In the US, electricity sources are more diverse. Geography and developer size can influence prices. Indicated Indian prices are US$2-3 while those in the US are US$5-10.
As with other voluntary carbon credits, there is a lack of clarity with EV credits. Critics argue that this could lead to potential leakage with impact to credit quality.
