As the car industry’s largest hybrid pusher, Toyota says it is better positioned to just buy credits to close the EPA gap rather than “waste” money on BEVs, its CEO said.
Essentially companies that pollute over certain threshold pay money (buy carbon credits) that then goes into non-profits compensating for those emissions by saving the environment, like planting trees and such.
The system is widely criticized for being very flawed and allowing all sorts of shenanigans and manipilations, as those “carbon credits” are sold at competitive pricing, fostering projects with questionable calculations.
In this case, the US governance sets a target efficiency for vehicles (miles per gallon here in the US) and if a pant does not meet that overall efficiency, they have to pay. EVs are a bit odd because they have a miles per gallon equivalency. So if it is expected for them to have 50% by 2030 (50% cars at 100 MPGe and 50% at like 45 MPG(e)) but they out have 30%,they will have to pay a large fine. They are saying they are okay with that rather than ramp up EV production more quickly.
Can someone explain what “credits” are like I’m 5? I read the article, but still don’t understand it.
Edit: Is it carbon credit subsidies from the gub’ment?
Essentially companies that pollute over certain threshold pay money (buy carbon credits) that then goes into non-profits compensating for those emissions by saving the environment, like planting trees and such.
The system is widely criticized for being very flawed and allowing all sorts of shenanigans and manipilations, as those “carbon credits” are sold at competitive pricing, fostering projects with questionable calculations.
In this case, the US governance sets a target efficiency for vehicles (miles per gallon here in the US) and if a pant does not meet that overall efficiency, they have to pay. EVs are a bit odd because they have a miles per gallon equivalency. So if it is expected for them to have 50% by 2030 (50% cars at 100 MPGe and 50% at like 45 MPG(e)) but they out have 30%,they will have to pay a large fine. They are saying they are okay with that rather than ramp up EV production more quickly.
Thanks