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Climate change and energy

Rivian hopes to earn carbon credits for its home electric vehicle chargers

The popular EV truck startup’s move raises questions about who really owns the climate contributions from clean technologies—and whether they should be used to offset someone else’s pollution.

June 12, 2023
a 2022 Rivian R1S parked next to a charging station in a rugged environment. The sun flares over the edge of a distant mesa.
Courtesy: Rivian

Rivian markets its high-end electric trucks to climate-conscious consumers hoping to simultaneously explore the great outdoors and do right by the planet. Now, the California-based automaker has applied to earn carbon credits for the chargers that power its pickups and SUVs, including those installed in its customers’ homes—an effort that MIT Technology Review is revealing for the first time. 

The move raises new questions about who deserves credit for the environmental contributions associated with green products like electric vehicles: the person who buys a $75,000 electric pickup or an $800 charger, or the company that manufactures and sells those products? And if those benefits can be quantified, should they be purchased by individuals or businesses hoping to cancel out their own ongoing greenhouse-gas pollution?

In a project application submitted last year to Verra, one of the world’s largest certifiers of carbon credits, Rivian said it “retains all environmental attributes” from the use of its chargers. Rivian is seeking to earn Verra-endorsed carbon credits for the emissions reductions achieved through those chargers. The credits, in turn, could be sold to other parties, who could use them to offset their emissions.

The basic idea behind carbon offsetting is that a person or company taking steps to cut a metric ton of greenhouse emissions or draw it out of the atmosphere—by, say, planting trees or canceling logging plans—can earn a credit through a registry like Verra or a government-backed program like California’s cap-and-trade system. In turn, that credit can be sold to another party willing to pay to balance out a ton of climate pollution. If the carbon math squares perfectly on both sides of the transaction, it should be a wash for the climate (though complexities abound).

The proposed project covers Rivian’s own Adventure Networks charging stations, Waypoint chargers purchased by third-party site hosts, and residential chargers located “throughout the continental US,” according to a description and map in the documents. 

According to the application, contracts with host sites specify: “All Environmental Attributes shall be the sole and exclusive property of Rivian to transfer, sell, hold or convey in its sole and absolute discretion.” It adds that “additional language … will be included” for residential chargers. 

Carbon market experts questioned whether the “charging network” project meets one of the fundamental criteria for reliable carbon credits and offsets. Several also criticized the specific inclusion of residential chargers in the proposal, which they read to mean that Rivian hopes to earn carbon credits from chargers that customers purchase, install and use in their own homes.

The company’s vehicles come with a portable charger that works with standard outlets. Its wall chargers cost $800, according to its website. 

Adam Millard-Ball, a professor of urban planning at the University of California, Los Angeles, and acting director of the UCLA Institute for Transportation Studies, says he doubts most customers would notice such a clause—or that salespeople would be likely to highlight it. 

“If someone is buying a charger and the company is selling away the good so someone else can pollute more, I don’t think that’s in the spirit of the marketing or the branding or the motivations of many people who buy electric vehicles,” he says. 

The company, based in Irvine, has earned stellar reviews from customers and automotive critics for the modern design, power, and luxury features of its high-end electric pickup truck and SUV, known as the R1T and R1S

The Verra application states that adding charging infrastructure “encourages increased EV charging and use,” which in turn displaces gasoline-fueled cars and trucks and cuts greenhouse-gas pollution. It estimates that the charging network in question will reduce emissions by 200,000 metric tons per year by the end of a seven-year project period. 

Verra is still reviewing the proposed project, and no carbon credits have yet been issued or sold. 

Andrew Peterman, Rivian’s director of renewable energy, defended the proposal, stating in a prepared response that the program could help accelerate the shift to a carbon-free transportation sector.

“Alternative revenue sources from programs like this not only make the scaled transition to clean electric transportation possible (and at the necessary speed) but enable companies like Rivian to do so while generating a greater positive impact for communities, conservation, and the climate,” he said.

He stressed that the company itself is not using carbon offsets to meet its own corporate climate objectives. Rivian didn’t respond to concerns raised about the inclusion of residential chargers, or to a question about whether it’s already begun inserting language claiming ownership of “environmental attributes” into customer contracts or other documents. 

Credible credits

One of the fundamental tests for carbon offset programs is known as additionality: a project is considered “additional” if it brings about climate benefits that would only have occurred because of the money earned from selling carbon credits. If the emissions reductions were going to happen anyway, the carbon credits weren’t the driver and thus can’t plausibly cancel out another party’s pollution. 

Several observers were skeptical that it passes this test for Rivian to install EV chargers or induce others to do so, given market trends, growing policy support, and some of the company’s own statements. 

Barbara Haya, director of UC Berkeley’s Carbon Trading Project, says the proposal effectively assumes that those chargers wouldn’t be installed without the added funds from carbon credits, even as more automakers produce EVs, more consumers buy them, and more government policies support the purchase of vehicles and construction of charging networks. 

“It’s ridiculous,” she says. “You can’t have an offset program for a project type that’s taking off.” 

Rivian has faced challenges in the booming EV market, despite the popularity of its vehicles. It has struggled to ramp up production, and since it went public in 2021, its stock price has plummeted amid concerns that a startup with limited manufacturing capacity will face growing challenges as larger rivals scale up their EVs lines and cut prices.

Grayson Badgley, a research scientist at CarbonPlan, a San Francisco nonprofit that analyzes the scientific integrity of carbon offset programs, flagged wording in Rivian’s latest 10K that could also argue against the additionality claim.

The company states: “We market our ability to provide our customers with comprehensive charging solutions, including our networks of charging stations, the Rivian Adventure Network and Rivian Waypoints, as well as the installation of home chargers for users where practicable.” 

“Those disclosures are consistent with the interpretation that Rivian likely intended to build charging infrastructure independent of offset credit payments,” Badgley wrote in an email. 

The effort to earn credits from chargers that customers buy and install themselves raises its own set of issues. Notably, it seems to assert ownership over climate benefits that many customers might believe they deserve the credit for, and which may have been part of their rationale for making the purchase.

“Does this mean that the carbon good of owning a Rivian isn’t owned by the driver?” Badgley asks. “They buy the car. They buy the charger. They buy the electricity.” But then someone else “gets to claim the environmental benefit?”

Accelerating EVs

The company didn’t respond directly to questions about additionality, but Peterman stated: “We at Rivian believe that enabling e-mobility through clean renewable charging solutions has a systemwide emissions benefit.”

“The crux of this transition relies on the ability of our industry to provide affordable energy and charging solutions in all parts of the country, from cities to rural communities,” he added. 

“In many cases, the additional revenue from programs like this will accelerate that deployment, especially across regions where significant investments into infrastructure and grid improvements will be required,” he wrote. “These additional revenue sources, especially in states or regions where there are limited state or utility incentives, also help support greater access to and more affordable home charging solutions.”

How might that occur? Mark Mondik, vice president of carbon markets at 3Degrees, a climate advisory firm that prepared the Verra application on behalf of Rivian, said in a statement that the funds could allow Rivian to pass on price cuts to customers, in the form of less expensive charging equipment. 

“The 3Degrees team looks critically at every project we work with, and we were happy to help Rivian pursue revenue from the carbon market arising from their aggregation of emission reductions,” he said, adding: “Successful project validation and verification is not guaranteed, so the criticism you’re hearing feels a bit premature.” 

Carbon concerns

Verra approved a protocol in 2018 that allows companies to earn carbon credits for emissions reductions achieved through EV charging systems under certain circumstances. It has approved a handful of small projects to date and issued several thousand carbon credits. Several additional proposals are pending.

In a response to MIT Technology Review, Verra said the Rivian project hasn’t “completed registration,” that additionality is “assessed during the validation process,” and that the organization doesn’t comment on projects “undergoing review.”

It noted that its rules for electric charging projects include several safeguards to ensure additionality. For instance, nationwide penetration levels of charging systems must be less than 5% of “the maximum adoption potential,” and the buildout of EV chargers can’t already be “mandated by any law, statutes, or regulations.”

Rivian’s proposed project doesn’t include chargers installed in states where government programs already award similar sorts of credits, which would create “double counting” risks, the application stated. It specifically excluded California and Oregon.

Verra reassesses and updates its methodologies every five years to incorporate new market data, and the company said it’s in the process of updating certain provisions for demonstrating additionality.

‘Greenwash a polluter’

Carbon offset programs have faced growing criticism: a variety of studies and articles find they often inflate the climate benefits from projects, and that purchasing them can amount to a form of corporate “greenwashing.”

An investigative piece by the Guardian and other outlets earlier this year raised questions about the reliability of Verra’s rainforest offset projects. It was based on scientific analyses concluding that among the projects assessed, more than 90% of the credits likely “do not represent genuine carbon reductions.” 

Verra strongly disputed the findings. 

Millard-Ball says the generous way of looking at Rivian’s proposal is that the market for voluntary offsets is basically unreliable and “performative” anyway. One could simply think of the money that individuals and companies spend on them, seeking to feel better about their behavior or market themselves as climate friendly, as a kind of financial subsidy to support the development of the EV industry and charging infrastructure. In that reading, it becomes less important for the carbon math to balance out perfectly between parties.

“But that’s not the sales pitch of the carbon offset industry,” he says. Moreover, it’s also not the way many buyers of carbon credits think of them. Major corporations, including oil and gas giants, are using them as a literal, ton-for-ton way to address significant shares of their ongoing greenhouse-gas emissions. 

When those credits don’t represent real improvements over the status quo, it means companies aren’t making the emissions progress claimed, even as they put off the harder work of cleaning up their business practices in the face of mounting global climate threats.

Aneel Nazareth, a Texas resident who recently purchased a Rivian SUV and home charger, reviewed his paperwork at the request of MIT Technology Review and didn’t find any wording about “environmental attributes.” He was of two minds about the company’s proposal to earn carbon credits for chargers.

“I think that the purpose of incentives is to get people to do things that they wouldn’t otherwise have done. I’m going to charge my Rivian at home. That’s true whether or not I have a Rivian-branded charger,” he wrote in an email. “So it seems suspect to reward them with a carbon credit that they can then sell to greenwash a polluter.”

But he also stressed that EVs can make a big difference in vehicle emissions. He noted that using his Rivian R1S to haul a travel trailer during a recent camping trip cost him about $30 in electricity, while that drive would have previously required around $100 worth of gas.

“If carbon credits bring a shift to EVs a little closer, I guess I’m for them,” he said. “Without shifts like that, we’re doomed.”

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