How Strata Condominiums, Rental Apartment Properties, and Businesses can benefit from electricity used for EV Charging

A utility grade digital smart electricity meter

Regulation changes in the Fall of 2021 enabled businesses and most Multi Unit Residential Buildings (MURBs) in British Columbia to earn carbon credits by charging electric cars.

As it turns out these carbon credits have become quite valuable – much more than the cost of electricity, and as EV adoption increases, a significant income stream that cannot be ignored.

The low carbon fuel standard carbon credit legislation was put in place to ensure the makers of transportation fuels, gasoline and diesel, reduce their carbon intensities over time to meet international climate change commitments. Originally, this was a 20% intensity reduction between 2010 and 2030. As each annual reduction of carbon intensity takes effect on January 1st, fossil fuel providers must ensure they have achieved enough reduction in carbon intensity, or purchase additional credits to meet the regulation. As a result the value of these credits has risen steadily as transportation fuel producers continue to sell gasoline or diesel. EV charging will grow the supply of credits to this market as other sources of credits, forests, suffer losses through wildfires. Bolstering the future price of carbon credits was a decision made in December 2022, whereby British Columbia increased the 20% 2030 target to 30%.

In the meantime, businesses and MURB building owners installing EV charging infrastructure can reap the benefits of reducing carbon emissions through the growing fleet of electric vehicles, not to mention the financial and performance benefits of driving EVs in the first place.

A new Canada wide Carbon Credit

In June of 2022 the federal government enacted Clean Fuel Regulations as part of the Canadian Environmental Protection Act that can provide a market for carbon credits created by organizations hosting EV charging. This evolving market began trading in July 2023.

For British Columbian organizations this means that two carbon credits can potentially be earned on the same electricity.

Carbex provides carbon credit exchange services for condos, co-ops, rental apartment property owners, and businesses with EV charging infrastructure. Access the significant financial returns available from hosting EV charging facilities.

Increased carbon reduction target bodes well for carbon credit pricing in BC

Accelerating action on climate change is increasing the market value of carbon credits. Fortunately, coal is not burned in BC’s hydro dominated electrical grid.

Since 2008, British Columbia has had carbon credit trading legislation that enables transportation fuel providers to purchase carbon credit generators to make up shortfalls of legislated carbon intensity reductions. The Low Carbon Fuel Standard was originally set to reduce the carbon intensity of transportation fuels by 20% between 2010 and 2030. On December 20, 2022, the Ministry of Energy, Mines and Low Carbon Innovation announced a change in the Regulations that accelerates annual carbon intensity reduction targets effective January 1, 2023.

The 20% carbon intensity reduction target has now been set to 30%

As each annual reduction of intensity takes effect on January 1st, fossil fuel providers must ensure they have achieved enough reduction in carbon intensity, or purchase additional credits to meet the regulation. As a result the value of these credits has risen steadily as transportation fuel producers continue to sell gasoline or diesel. Now, the annual reduction of carbon intensity will become a steeper, linear drop over the next 7 years bolstering demand for credits.

What will be the effect on pricing? There are a number of factors. As stated above, it is getting harder to reduce carbon intensities from the existing fuel production processes. That’s driving up prices. Expansion of the LCFS to other transportation fuels, such as aviation and rail would also drive up the demand for credits. This is currently under consideration by the government.

On the other hand, MURB EV charging will grow the supply of credits to this market over time. Currently the amount generated is insignificant to the existing transfer activity. But demand for credits from the oil & gas industry may also drop by current changes they are making to reduce carbon intensities.

Renewable diesel is the buzz word right now in the industry. Agricultural crops will be used to produce a diesel fuel that is identical to petroleum diesel in use and performance. New plant capacity being built in Alberta is underway specifically to serve the British Columbia market and avoid having to purchase credits. Whether the supply will come on fast enough, or, in fact will be cheaper for the industry is yet to be seen.

In the short term, it seems the trend will be for increased demand for credits and increased credit transfer prices. That may not last – if it does, the silver lining is that we are in fact achieving our GHG reduction targets, and the world will be a better place.

The Low Carbon Fuel Standard is working, as designed, to reduce carbon emissions in transportation fuels in BC.

BC LCFS carbon credits have risen in value and volumes in the past two years. Now with a 30% reduction in carbon intensity, demand for credits, and prices should remain buoyant. Data from BC Government/EMLI

Electric Advantage offers carbon credit administration services bundled with annual reviews of EV charging operations to ensure your organization has optimal policies to obtain maximum value from your investment in EV charging infrastructure.

Source: https://news.gov.bc.ca/releases/2022EMLI0066-001925