The Future of Carbon Credits from electric vehicle charging infrastructure
Written by : Gun Gun Febrianza (Founder NedZero Indonesia)
The facts related to the threat of global warming have been purely scientifically proven and have now triggered global action to fight climate change. One of the technological developments that are helping to fight climate change is the role of electric vehicles and electric vehicle charging infrastructure in achieving Net-zero.
Carbon credits are a commodity that is certified and can legally be traded, besides that carbon credits can be used for carbon offset activities. Carbon credits have a monetary value that can be used as an instrument to build incentives for economic agents who care about the environment.
Currently, with a belief system related to the green economy, entrepreneurs who have the infrastructure to charge electric vehicles and people who own electric vehicles can earn money. All of this can be realized because carbon credits can be generated from reducing greenhouse gas emissions achieved through charging electric vehicles. (EVs).
Carbon credits are generated by replacing gasoline-fueled vehicles with electric vehicles. The resulting carbon credits become an incentive to earn money for entrepreneurs who have the infrastructure to charge electric vehicles and people who own electric vehicles to help transition to a low-carbon economy.
To calculate carbon credits from the electric vehicle charging ecosystem, there are two methodologies, namely using the Clean Development Mechanism (CDM) or Voluntary Carbon Standards (VCS). Following are the Steps to calculate the carbon credits of the electric vehicle charging ecosystem :
- First, we must establish an emission baseline that represents the amount of emission produced from gasoline-fueled vehicles that will be replaced by electric vehicles (EV). There are factors that can be used as parameters such as average fuel efficiency, distance traveled, and the type of fuel used.
- Second, we have to calculate the emissions from electric vehicles (EV), because electric vehicles do not have tailpipe emissions, the focus of the emission calculation lies on the emissions produced during electricity generation and charging. There is a consideration of the source of electricity used to charge electric vehicles (EV), whether it comes from coal or from renewable energy.
- Third, we start calculating the emission reductions that can be achieved using electric vehicles (EV), the calculation is done by reducing existing emissions at the baseline with emissions from electric vehicles. The result or difference from the reduction represents the emission reduction using electric vehicles (EV).
- Fourth, we start converting the results of emission reductions into carbon credits by determining the conversion factor, in general, one carbon credit represents the prevention or reduction of one metric ton of carbon dioxide emissions. The result of reducing emissions will be multiplied by a conversion factor in order to determine how many carbon credits can be generated.
- Fifth, we must work with third parties who have the ability to verify the results of carbon credit calculations from electric vehicle charging infrastructure. Independent and/or certified third parties using recognized standards and authorities. This verification ensures the accuracy and integrity of the calculations and provides credibility for the carbon market.
Since 2018, Verra has had a methodology for electric vehicle charging systems called VM0038 Methodology for Electric Vehicle Charging Systems, v1.0, this methodology can be studied by scientists such as scientists with environmental, computer science, automotive, electronics, and electrical backgrounds.
Methodology for Electric Vehicle Charging Systems, v1.0 can be read and studied through Verra’s website, this method was first developed by the Electric Vehicle Charging Carbon Coalition (EVCCC). Verra is an independent, not-for-profit organization focused on developing carbon standards and registry systems on a global scale.
To encourage emission reductions using technology in the electric vehicle ecosystem, a program is needed, an example of a program that currently exists in Singapore is The Electric Vehicle Accelerator program run by a private company called CRX CarbonBank. This program will distribute carbon credits in early 2025 and 30% of program revenue will be given to participating companies. The money from the carbon credit income will also be used as an incentive for drivers to switch to using electric vehicles and encourage electric vehicle owners to charge electricity in the electric vehicle charging infrastructure they have provided.
CRX CarbonBank predicts that from 4-wheeled vehicles and taxis alone there is a potential income of between 22.8 million and 42 million dollars and prevent 9 million tons of carbon dioxide by 2040. Gojek is one of the companies that has registered in The Electric Vehicle Accelerator program created by CRX CarbonBank.
The existence of Carbon Credit for the electric vehicle industry and ecosystem will certainly encourage the growth and adoption of electric vehicles and the distribution of infrastructure for charging electric vehicles in Indonesia. If the potential for carbon credits generated from the electric vehicle ecosystem continues to grow and is very large in Indonesia, then we can sell more carbon credits to the world market and attract Foreign Direct Investment to develop cutting-edge technologies that can become sources of electricity derived from renewable technologies.
#carboncredit #climatechange #EV #carbonomics #indonesia