The Challenge of Emissions in the Transportation Sector

The emergence of ride-hailing services such as Uber and Bolt has presented new challenges to the transportation landscape, notably concerning traffic congestion and pollution levels.

Studies indicate that vehicles utilized for ride-hailing generate greater emissions compared to privately owned cars.

Exploring Sustainable Solutions

Both Uber and Bolt have explored various strategies to lessen their environmental impact and address these concerns. These include promoting ridesharing, implementing bike and scooter-sharing programs, and incentivizing drivers to adopt electric vehicles.

Despite these efforts, achieving significant success with these alternative models has proven difficult.

Lyft's Carbon Neutrality Pledge and Subsequent Shift

In 2018, Lyft committed to achieving carbon neutrality, initially planning to accomplish this through the purchase of carbon credits from 3Degrees, a sustainability-focused firm located in San Francisco.

Lyft reported offsetting an amount of carbon equivalent to that absorbed by 2.4 million acres of trees in a single year, acquiring 2,062,500 metric tons of carbon offsets. However, the company later altered its approach in 2020.

While the carbon offsetting program neutralized emissions from Lyft rides, it proved to be a costly undertaking. The company acknowledged that overall emissions from its services would likely continue to rise. Consequently, Lyft announced a goal to transition to an all-electric vehicle fleet by 2030, mirroring similar commitments from many automotive manufacturers globally.

Planet42: A Novel Approach to Carbon Neutrality

However, Planet42, a car subscription company based in South Africa, is pursuing carbon neutrality with a different strategy – one focused on immediate action.

Unlike ride-hailing companies, Planet42 operates a car subscription service, acquiring used vehicles from dealerships and offering them to customers through a subscription model.

Planet42's Expansion and Environmental Considerations

Founded by Marten Orgna and Eerik Oja, Planet42 primarily serves individuals in emerging markets, with a current focus on Africa.

The company has already purchased approximately 3,000 cars in South Africa and intends to expand its fleet to 100,000 vehicles in the coming years, with a global target of 1 million cars by 2025.

Despite not being a ride-hailing service and providing access to vehicles for those who might not otherwise have them, Planet42 recognizes the environmental impact associated with the emissions produced by its fleet.

Taking Immediate Action on Emissions

Observing the slow pace of progress toward carbon neutrality within the automotive industry, Planet42 decided to take proactive steps last year.

“Few people would argue that becoming carbon neutral is not a worthwhile goal, but it seemed to us that the world is not moving towards carbon neutrality fast enough,” Oja explained to TechCrunch. “So instead of introducing a vacuous grand plan of becoming carbon neutral by 2040 or something like that, we decided to become carbon neutral now.”

Utilizing Wind Energy for Carbon Offsetting

Given the limited availability of electric vehicles for widespread use in Africa and the expense of tree-planting initiatives, Planet42 sought alternative methods for achieving carbon neutrality.

Drawing on the expertise of 3Degrees, which previously engaged in wind farm projects and greenhouse gas capture from landfills, Planet42 opted to invest in wind energy.

The company collaborates with local South African businesses to support a wind farm in the Northern Cape province. Funding from carbon offset credits has enabled Planet42 to finance the farm for several months.

The electricity generated by the wind turbines offsets energy production from more polluting sources, such as coal, and contributes to a lower-carbon global economy.

A Self-Imposed Tax and Industry Leadership

“We are offsetting this negative impact by investing into carbon offset projects in the markets we operate in. To put it another way, the investments we make into carbon neutrality represent a self-imposed tax. We are leading by example and hope that companies in Africa and beyond will follow us.”

Initially, carbon neutrality was not a primary consideration when Planet42 launched, having secured $20 million in debt and equity funding.

However, the company has since achieved carbon-neutral certification from Natural Capital Partners, and its investors have expressed strong support for the initiative.

Future Plans and the Challenges of Electric Vehicle Adoption in Africa

Oja stated that the company’s long-term goal is to achieve carbon neutrality through the adoption of electric vehicles.

However, this presents significant challenges. The adoption of electric vehicles in Africa is hindered by factors not encountered in the U.S., Europe, or even other emerging markets.

These include an unreliable power supply, high electricity prices, a lack of tax incentives and supportive policies, and the prohibitive cost of electric vehicles for the average African consumer.

Current Realities and Continued Reliance on Wind Energy

Currently, there are over a million electric vehicles on U.S. roads and more than 317,000 in the U.K. In contrast, South Africa – the leading electric car market in Africa – has only around 1,000 electric vehicles.

Therefore, wind farms will remain crucial to Planet42’s carbon-neutral efforts until electric vehicles become more accessible.

“Ideally, what we could be doing is for our cars to be electric, and that’s what we’re planning for the future. When we do that, there wouldn’t be any need for offsets on a day to day side but we’re not there right now. Everyone understands that ultimately electric cars will be ideal; however, that future is not now and we need to act right now,” the CEO concluded.