Transportation electrification projects face a number of barriers when it comes to accessing carbon finance, including relatively low emission reductions per vehicle, high marginal investments costs, unpredictable technology uptake by users, and complicated monitoring, reporting and verification (MRV) procedures when dealing with numerous distributed assets like vehicles, charging stations, and batteries.
In the midst of these challenges, electric two- and three-wheeled vehicles show promise within emerging economies, although uptake remains slow, in part due to limited carbon finance. Potential solutions to existing challenges include a digital approach to MRV that can aggregate small-scale carbon transport projects at a low cost, as well as engaging carbon markets under Article 6.2 of the Paris Agreement.
This report, supported by Shell Foundation together with Ampersand and the International Growth Center, explores the potential of carbon market mechanisms for electric two-wheelers through a case study example in Rwanda.