Start-Ups See Trading RECs As Way To Profits

May 9, 2007

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Phoenix Motorcars’ electric vehicles will generate “zero-emission credits” from California that could add up to serious money for the start-up, CNET reports.

California requires all automakers to produce a set number of zero-emission vehicles – or buy credits to offset the gas guzzlers they do make. Because it specializes in clean vehicles, Phoenix Motorcars expects to have an excess of these credits, which it could sell to auto manufacturers who don’t meet the state’s requirements.

“Some (entrepreneurs) have been writing into contracts that they own the carbon credits created by the products they manufacture,” said Rob Day, a principal at the clean-tech investment arm of @Ventures, who said that carbon-restraining policies are likely to come to the U.S. in the next few years. “You can see the writing on the wall now.”

In a twist on the way renewable energy credits are handled, Wal-Mart – in its recent solar announcement – said it will use the power generated by the solar panels onsite at each store and will also keep the RECs the units produce.

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