Electric vehicle makers see revenue potential in carbon credits

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Mumbai, June 30 Armed with their zero-emission claims, makers of electric vehicles are trying for carbon credits.

Manufacturers of electric vehicles see considerable revenue potential as well as brand building prospects in attaining carbon credits, though the sector is at a nascent stage in India.

At least three electric scooter makers – including Hero Electric and Chennai-based Kabirdass Motor Company (makers of Xite) – have appointed consultancies to assess their carbon credit potential. Bangalore-based electric carmaker Reva is also in the process of ascertaining its carbon credit potential.
Joint effort

The Society of Indian Electric Vehicle Manufacturers (SIEVM) is considering a proposal to collectively work for attaining carbon credits. The 29-member industry body discussed this at a recent meeting and a decision is expected soon.

“As every one of us is benefiting from this, we discussed the prospect of jointly working on this. Three of our members said they already initiated their carbon credit projects,” said Mr Sohinder Gill, President SIEVM and CEO of Hero Electric.

Hero has appointed a consultancy to assess its carbon credit potential and to facilitate clean development mechanism (CDM) registration under the United Nation’s Framework Convention on Climate Change. “By any standards, an electric scooter will save 0.25-0.4 tonne of carbon per year. We have just initiated the process (of assessing carbon credit potential) and it will take at least two years to get the final approval,” said Mr Gill.

Mr Murali Kabirdass, Managing Director of Kabirdass Motor, said: “We have entered into an agreement for CDM project with Asia Carbon Emission Management India Pvt Ltd. We expect up to 10 per cent of our revenues to come from carbon credit trading.”
Branding

It is estimated that an annual production of 30,000 electric scooters will help save 18,000 tonnes of CO2, which would earn a credit of 18,000 Certified Emission Reductions.

However, Hero Electric and Reva see carbon credit project more as a branding effort than a source of revenue.

“By a conservative estimate, in next 10 years we may get Rs 10 crore from carbon credit trade, which is not very attractive considering our scale of business. But it is a good statement to make that we are eligible for carbon credit,” said Mr Gill.

Hero Electric plans to trade in the international carbon credit market once it gets the approval.
Green plant

Mr R. Chandramouli, President, sales and marketing, Reva Electric Car Company, said: “We are in the process of assessing our carbon credit potential.

“Our primary purpose is not to trade but to understand how much carbon we save. Not only our product, but our upcoming plant with its solar charging and green building also has very less carbon footprint.”

One challenge the electric-vehicle makers are facing is the “very cautious” approach adopted by UN in approving carbon credit.

“UN is wary of Indian and Chinese companies. What we heard is that there were some 500 spurious applicants for carbon credits from India,” said Mr Gill.

Manu P. Toms