Taiwan’s Ongoing Efforts
to Establish a Domestic GHG Scheme
In order to proactively participate in the global efforts to mitigate
climate change, Taiwan EPA has drafted the Greenhouse Gas Reduction Act
in 2006 to establish a domestic legal framework to manage GHG emissions
in Taiwan. The Act would delegate authorities to relevant government
agencies to establish emissions reduction plans, and considering ongoing
developments in the international negotiation process, would authorize
Taiwan EPA to establish a domestic cap-and-trade system in the future. The
bill was approved by the Executive Yuan in September 2006 and submitted
to the Legislative Yuan for review. However, the bill only passed the first
reading in 2007, and now is resubmitted to the Sanitation, Environment,
and Social Welfare Committee for further deliberation in the 2008
legislative session.
In order to promote voluntary reduction by industries, Taiwan EPA has
set up the National GHG Registry in July 2007 to allow organizations to
voluntarily report their emissions inventories, using credible, accurate, and
consistent GHG reporting standards and tools for organizations to measure,
monitor, and reduce their GHG emissions with third-party verification (see
Attachment 2). Currently, efforts are underway to develop rules for
industries to develop project-based reduction credits, consistent with
international standards such as the CDM and VCS. Furthermore, on January
10, 2008, Taiwan EPA established the GHG Reduction and Management
Office in order to coordinate GHG mitigation strategies among government
agencies, enhance the effort of local governments on GHG reduction issues,
and to improve partnership between the government and the private sector.
Given the ongoing regulatory developments in Taiwan to possibly
pursue mandatory cap and trade system in the future, we wish to work with
the international community to share best practices and exchange
experiences in the emerging global carbon market.
Outline of the Draft Greenhouse Gas Reduction Act
(preliminary translation)
In order to mitigate global climate change caused by human activities,
the United Nations Framework Convention on Climate Change (UNFCCC)
was adopted by the United Nations in 1992 as an international agreement to
control anthropogenic greenhouse gas (GHG) emissions. Furthermore, in
the Third Conference of the Parties to UNFCCC (COP-3) in 1997, the
Kyoto Protocol was adopted by the Parties as a legally binding agreement
to limit the GHG emissions of industrialized countries. The Kyoto Protocol
commits 38 industrialized countries and European Union to reduce their
GHG emissions to 5.2% below the 1990 level during the 2008-2012 period,
and has entered into force on February 16, 2005. The legally binding
emission targets only apply to industrialized countries which have ratified
the Kyoto Protocol. However, in the post-Kyoto period (after 2012), Taiwan
and other newly industrialized countries may become the next targets for
reduction commitments. As the emission reduction methods, targets and
time schedules are still under discussion, the outcome is still highly
uncertain.
Due to unique political status, Taiwan is unable to become a Party to
either the UNFCCC or the Kyoto Protocol. Nonetheless, as a member of the
international community and in the spirit of “common but differentiated
responsibilities” of the UNFCCC, Taiwan is willing to adopt cost-effective
measures to mitigate climate change and pursue sustainable development. It
is for the above rationale that the Greenhouse Gas Reduction Act was
drafted, and the key elements in the Act (6 chapters with 28 articles) are
outlined as follows:
1. If the GHG reduction measures involve relevant responsibilities of
government agencies, the Executive Yuan shall convene relevant central
agencies to develop and review the task assignment, integration, and
promotion of emission reduction measures. The central competent
authority shall develop GHG emission reduction plan and implement it
after approval by the Executive Yuan; the central industry competent
authorities shall develop and implement the reduction targets and action
plans based on the plan. (Articles 5 & 6)
2. The central industry competent authority shall conduct investigation of
GHG emissions and development of climate change adaptation strategy;
the central competent authority shall conduct assessment of climate
change impacts, obtain periodic statistics of national emissions, and
establish national emission inventory. (Article 7)
3. The central industry competent authorities responsible for energy,
industry, transportation and residential/commercial policies shall review
and revise their respective GHG reduction policies periodically; industry
competent authorities shall advise enterprises on conducting emissions
inventory, registration, verification, and voluntary reduction, as well as
their participation in international emission reduction projects, and may
provide enterprises with incentives or subsidies. (Articles 8 & 9)
4. Competent authorities at the municipality and county/city level shall
develop, revise and implement their respective GHG reduction
implementation plans, in accordance with the national GHG reduction
policy and action plans. (Article 10)
5. After the central competent authority has established the GHG inventory,
registration and verification scheme, as well as the emission trading
system, enterprises with emission sources as declared by the central
competent authority shall conduct annual inventory of emissions, and
periodic registration of emission data which have been verified by
verification/certification entities; the average annual GHG emissions of
the enterprises shall meet the GHG emission standards. (Article 11 & 12)
6. In accordance with the decisions of the UNFCCC, the Kyoto Protocol
and related meetings, the central competent authority shall publish the
national GHG emissions cap periodically. The emission reduction goals
shall be implemented in stages, and the reduction quotas shall be
assigned to industry competent authorities, which shall develop the
reduction plans accordingly. (Article 13)
7. Based on the assigned GHG emission quota, central industry competent
authorities shall publish the emissions allocated to the enterprises with
declared emissions source, and shall reserve part of the allocation for new
or modified emission sources of designated level, and shall require the
new or modified enterprises to adopt the best available technologies.
(Article 14)
8. Enterprises with allocated emissions shall implement emission reduction
measures or conduct trading in the trading platform designated by the
central competent authority; enterprises’ actual emissions may not exceed
the allocated amount or emissions quota; the central competent authority
shall publish the designated level for new or modified emission sources,
and after implementation of the emissions cap scheme, new or modified
emission sources shall obtain offsets for any emissions exceeding the
allocation by the central industry competent authorities. (Article 15)
9. In order to encourage enterprises to implement voluntary emissions
reduction, enterprises may voluntarily submit GHG reduction plan, target
and timeline prior to the allocation of emission quota. After being
verified by the verification/certification entity, the enterprises may apply
to the central competent authority for certification of reduction credits,
which may be used for offsets or trading in the GHG cap and trade
scheme. (Article 16).
10. Competent authorities or industry competent authorities may inspect the
premises of the enterprises with emission sources or may request them to
provide relevant information. (Article 17)
11. All levels of government agencies shall strengthen education of schools,
enterprises and the public on GHG reduction; government agencies,
public schools and state-owned enterprises shall promote energy
conservation and adoption of high energy efficiency products or services.
(Article 18 & 19)
12. Enterprises or verification/certification entity shall be penalized for
noncompliance with the Act. (Articles 21-26).
Attachment 2
Voluntary GHG Registry
The Taiwan National Registry (Registry) was officially launched in July
2007 by the Taiwan EPA to serve as a national GHG registry to maintain
voluntary reporting of GHG inventories by organizations. The Registry
provides leadership on climate change by developing and promoting
credible, accurate, and consistent GHG reporting standards and tools for
organizations to measure, monitor, and reduce their GHG emissions with
third-party verification, consistently across industry sectors. As of May 1,
2008, a total of 62 organizations voluntarily reported their GHG emissions
to the Registry. These organizations are leaders in their respective
industry sectors which include power, cement, steel and iron, paper,
petrochemical, and semiconductor. Furthermore, the Taiwan EPA is
targeting the top 100 industrial GHG emitters that contribute up to 58% of
total GHG emissions in Taiwan. The Taiwan EPA will do its best to
ensure that all the Registry members are well prepared for market-based
solutions and upcoming regulatory requirements (e.g., emissions offset
and/or trading scheme). A diagram of the Registry’s voluntary reporting
scheme is presented below.
Taiwan EPA
Supervise
Supervise
Designated
Registry
Validate/
Verify
National
Certification
Body
Register
Verify
Voluntary
reduction project
Authority
Inventories
Certify
Verification
Organizations
Central
Industry
Competent
Emissions source/
enterprise/project
• GHG inventories
• Voluntary reduction
Assistance,
awards, subsidies,
initial review