The Week in Cleantech (Jan 27. 30 to Feb. 5) – Renewable Fuel Credit Trading Goes Live

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A few weeks ago, I argued that signs were pointing toward an imminent return of diesel powertrain technology in North America. On Monday, however, Mike Millikin at Green Car Congress informed us that US new-car shoppers did not see diesels as a likely mainstream powertrain. Instead, hybrids really seem to have captured the imagination of US car shoppers. The respondents’ perception of diesel seems rooted in stereotypes dating back to the 1980s, which I suppose is normal given that that is when US drivers last experienced diesel engines to any significant degree. It will be interesting to see whether the car makers that are banking on diesel making a comeback in North America manage to change that perception. On Wednesday, Keith Johnson at the WSJ’s Environmental Capital discussed rate cuts and renewable energy. Well…not quite. His post focuses mostly on what would happen to solar stocks should OPEC turn on the taps. Should OPEC nations find the capacity to increase their collective output, this would be yet one more item solar bears would have on their side for 2008. But the question is, can OPEC even find that capacity? On Wednesday, Bioenergy Business told us that a new US renewable fuel standard trading exchange had gone live. Regular readers know that I’m a big fan of all things market-based for regulatory compliance, be it carbon credits, SOx emissions or RECs. This new kid on the environmental exchange bloc promises to be interesting, especially given that, unlike CO2 or RECs in certain states, the Renewable Fuel Standard (RFS) is mandatory. On Thursday, Climateer at Climateer Investing gave us the heads up on an article that argues that China could soon be the world’s top wind turbine manufacturer. There are two interesting angles for investors here. First, current tightness in wind turbine supply should ease by 2009 as new capacity continues to be added, which will lead to price decline and potential top-line impacts for the current turbine majors. Second, after a plethora of Chinese solar IPOs on US exchanges over the past 3 years, could Chinese turbine makers be next? Keep in mind, however, that quality will continue to be a key issue and that the incumbents have a serious advantage here. On Friday, Renewable Energy Access informed us that the Senate Finance Committee had added renewable energy tax credits to the White House’s proposed Stimulus Bill. Not quite sure what to think of that. For one thing, that package really isn’t where these support schemes belong, and the fact that Senators resorted to trying to squeeze this in there highlights Congress’ complete lack of leadership on this issue more generally. Second, like many others, I happen to think that this ‘stimulus’ effort is nothing but a knee-jerk reaction to a problem that demands more fundamental and long-term action.


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