News Flash | What's the reason behind Bitcoin's energy consumption? Reuters: Musk to enter renewable energy credit market

According to Reuters, Tesla is seeking to enter the renewable credit market, aiming to benefit from the zero-emission policy proposed by the Biden administration in March.

The report indicates that at least eight companies, including Tesla, electric vehicle manufacturers, are applying to the Environmental Protection Agency for power plant and renewable energy credits.

Note: Renewable Energy Credits (RECs), also known as Renewable Energy Certificates, are certificates for certified renewable energy that can be traded in the market separately from actual electricity usage to encourage the use and production of green energy.

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Tesla Could Reshape Renewable Energy Credit Market

According to reports, the United States began investing in the biofuels industry in the mid-2000s, with the market generating 18 billion renewable energy credits in 2020, primarily produced by ethanol renewable energy producers. Tesla may potentially focus on developing biogas as part of this market.

It is noted that the Environmental Protection Agency will evaluate whether electric vehicle usage meets the Renewable Fuel Standard (RFS) for tradable renewable energy credits.

High Emission Industries Required to Purchase Credit Quotas

Industries with high emissions, such as refineries, are required to purchase credit quotas from renewable energy producers to comply with government-mandated total biofuel usage. More details in the article

How Do Carbon Credits Differ from Renewable Energy Credits?

Carbon credits, which were once a major revenue source for Tesla, were purchased in bulk by the Dutch car manufacturer Stellantis from 2019 to 2021, totaling $2.4 billion in American and European carbon credit purchases from Tesla. However, through consolidation and technological advancements, the company no longer needs to purchase carbon credits from Tesla.

As for the difference between carbon credits and Renewable Energy Credits (RECs), according to "Differences between Voluntary Renewable Energy Certificate Trading and Carbon Trading in Taiwan": "RECs focus on electricity as the subject of interest, rather than the reduction of greenhouse gas emissions. Therefore, the purchase is for green energy without the cost of offsetting greenhouse gas emissions." In other words, RECs focus on the use of green electricity, while carbon credits represent a reduction in carbon emissions.