SINGAPORE - A new scheme launched on Tuesday (April 12) will allow electric vehicle (EV) charging point operators and fleet owners here to make money from the use of battery-powered cars, in a move that aims to support the shift away from fossil fuels.
The Electric Vehicle Accelerator programme, designed by local carbon trading firm CRX CarbonBank, will generate carbon credits based on the greenhouse gas emission reductions achieved through the charging of EVs.
This is calculated by comparing against the emissions that would have been generated by internal combustion engine (ICE) vehicles that the EVs would have replaced.
These carbon credits will then be sold and, as early as 2025, 30 per cent of the revenue will be shared with companies that participate in the programme.
This money can then be distributed further down the line to reward private-hire car drivers who switch to EVs, or drivers who charge their EVs at participating charging points, for instance.
CRX CarbonBank estimates that for cars and taxis alone, the carbon credit scheme could bring in US$22.8 million (S$31 million) to US$42.8 million in carbon revenue, and cut nine million tonnes of carbon dioxide emissions by 2040.
On Tuesday, ride-hailing firm Gojek became the first company here to sign up for the new scheme, and more companies are expected to join.
CRX CarbonBank's co-founder and chief executive Vinod Kesava told The Straits Times that the revenue from the sale of the credits will help to defray the upfront cost of building charging infrastructure and incentivise greater EV adoption here.
A European buyer has already been lined up, but Mr Vinod declined to say more.
CRX CarbonBank said it has also developed a digital platform for the programme to measure and verify the amount of emissions reduced by operating an EV.
It will use a methodology that has been approved by Verra, an American body that sets standards for certifying carbon credits, to measure emissions reduction, and a proprietary system for validation and verification.
The firm has filed a patent application in Singapore for this system, which it says uses blockchain technology to ensure that precise charging data is used.
It worked with local start-up Beep Technologies to build the platform and ensure that charging sessions are recorded properly and that there is no double counting.
To monitor and track the carbon credits generated under the programme, the firm said it will tap the open-source OpenAttestation standard developed by Singapore's Government Technology Agency.
This is the same standard that has been used to verify education certificates and Covid-19 vaccinations here.
To encourage more firms to join the new carbon credits scheme, CRX CarbonBank said it will provide an early bird grant of US$4.80 for every megawatt-hour of charge that is registered under the scheme.
This grant, payable on an annual basis, will last until February 2024, but may be extended, depending on how many firms sign up, Mr Vinod said.
The firm expects to pay out more than US$2 million in grants by 2024.
Carbon credits are bought by polluters to offset their carbon footprints, with one credit equivalent to reducing or removing 1,000kg of emissions.
The reduction or removal must fulfil several criteria, such as being real and measurable and permanent.
It must also be additional, meaning that the reduction or removal of emissions would not have been undertaken without proceeds from the sale of carbon credits.
While Singapore has already announced plans to phase out all ICE vehicles here by 2040, Mr Vinod said driving an EV is not yet common practice here, and the new EV carbon credit scheme will ideally help accelerate the shift towards greener vehicles.
This is one way the scheme fulfils the "additionality" criteria, he added.
The scheme will end in 2050, when Singapore aims to achieve net-zero emissions, and there are plans to expand it to other countries in South-east Asia.
Said Mr Vinod: "Our efforts will incentivise our partners to contribute to the advancement of Singapore's net-zero targets by 2050 and help drive the international push to reduce global emissions from transportation."
Asked about the viability of EV carbon credits in Singapore, Mr Roman Kramarchuk, head of future energy analytics at S&P Global Commodity Insights, said the benefits would be more limited since most of the electricity here is generated using natural gas.
"Unless (the) EV charging system can be directly tied to renewables, physically or financially, there will still be emissions associated with electric charging," he said.
While a carbon credit scheme can make EV charging more easily accessible and potentially less costly, the key will be the extent to which incentives from the scheme make a difference in the decision-making of new car buyers, Mr Kramarchuk added.
There is also the question of whether a simple subsidy or tax credit may achieve a similar goal, he said.