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Taiwan is mulling legislation to set medium-term emissions targets –but many companies are voluntarily measuring and monitoring emissions in anticipation of regulation. Richard Huang and Robert Dornau explain.
Given its anomalous international situation, Taiwan falls outside the Kyoto Protocol system – meaning it has neither an absolute national emissions target nor is it able to play host to Clean Development Mechanism (CDM) projects. That does not mean that it is ignoring the climate change issue – indeed, Taiwanese companies are increasingly putting in place greenhouse gas (GHG) reporting programmes, in response to a number of drivers.
For example, public companies such as Taiwan Power Company and Taiwan Petroleum Corporation are required by government policy to disclose their GHG inventories and initiate abatement measures. Other large scale companies, such as AUO Optronics Corporation, Taiwan Semiconductor Manufacturing Company and Cheng Loong Corporation, are beginning to report on their emissions to demonstrate corporate social responsibility and ensure a positive corporate image among their customers and other stakeholders.
As elsewhere around the world, small and medium-size companies are typically somewhat passive on the issue, although more are taking action because of requests from customers for the disclosure of GHG information, especially by export-oriented companies.
Such efforts are encouraged by the authorities, which offer free inventory consultancy and verification.
But the pace of change is beginning to accelerate. Largely unnoticed by the rest of the world, Taiwan has been preparing national climate change regulations for several years. A climate change team was established under the Department of State in late 2004. In mid-2005, a national energy conference encouraged the creation of a GHG reduction policy. And, one year later, the GHG Abatement Office was established, with the aim of reducing GHG emissions intensity (that is, emissions per unit of production) by 10% by 2015 compared to 2000.
Last autumn, a draft GHG abatement bill was submitted to Congress, which is expected to pass in 2008.Key elements include:
- a target of reducing GHG emissions to 2005 levels in the 2025–30 period;
- covering a variety of sectors, including petroleum and petrochemicals, steel, power, thin film transistor–liquid crystal display (TFT–LCD) manufacturers, cement, paper, semiconductors, automotive and incineration plants;
- trading of emission quotas among participants;
- admissibility of emission reduction credits from GHG abatement projects in Taiwan (both project reductions and reductions from organisation-wide schemes will qualify for credits) and from the CDM; and
- recognition of early action, if efforts are independently verified.
Even though the GHG abatement law is still under review in the Congress, in July this year the Taiwan Environmental Protection Agency (EPA) launched a voluntary registry platform on which companies can register their annual emission inventories as well as emission reductions generated through GHG abatement projects. The benefits of early registration include that, once the law is passed and implemented, early and voluntary actions will be retrospectively recognised by the EPA. Also, the credits granted can be used when environmental impact assessment committees require new or upgraded installations to offset increased GHG emissions.
The preparation of annual inventories and their verification is based on ISO 14064-1, the standard for quantifying and reporting emissions at the organisation level. A key to the success of the EPA scheme lies in verification, which has to be undertaken in accordance with ISO 14064-3. The Taiwan Accreditation Foundation (TAF) was commissioned by the EPA to develop the accreditation process, and expects to launch it in December. It will use ISO 14065 as the accreditation standard, which specifies principles and requirements for bodies that undertake validation or verification of GHG assertions. International verification companies, including SGS, are preparing to apply for it.
Thus far, these drivers have led to the EPA, the Bureau of Energy and the Industrial Development Bureau helping more than 100 companies in different industry segments establish inventories based on ISO 14064 and the World Business Council for Sustainable Development/World Resources Institute GHG Protocol.
As of September, a number of companies have been awarded ISO14064 verification statements in Taiwan by international verifiers including:
- Cheng Loong Corporation (DaYuan plant), an international paper manufacturer;
- AU Optronics Corporation, an international leading TFT–LCD manufacturer;
- China Petroleum Corporation (Taoyuan plant);
- Taiwan Power Company (Taichung and Ming-Tan plants);
- Ho-Ping Independent Power Plant; and
- Taiwan Semiconductor Manufacturing Company.
Some industries are struggling with the authorities with regard to GHG reduction criteria, since they can heavily influence revenue and competitiveness.
But most companies in Taiwan understand that there is a clear trend towards getting to grips with the GHG issue and incorporating it into their strategic planning. Mandatory requirements for reporting annual inventories and meeting abatement objectives will be in place once the law passes. The voluntary scheme offers them the possibility of getting the preparations in place to be ready to implement mandatory emissions goals when they emerge.
Richard Huang is Taipei-based technical manager and Robert Dornau is Geneva based director of the climate change programme at SGS, a leading verification, testing, inspection and certification company.
E-mails: Richard Huang and Robert Dornau
This story was first published in Environmental Finance Taiwan.
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