Taipei, April 22 (CNA) A carbon exchange slated to open in Taiwan by mid-2023 is expected to help the government meet its goal of net-zero emissions by 2050, the National Development Council (NDC) said Saturday.
In a statement released for Earth Day, the NDC, Taiwan's top economic planning body, said the establishment of a carbon exchange was expected to allow the integration of resources and capital to push for emission reductions through carbon credit trading.
The NDC added that the Climate Change Response Act, which was passed by the Legislative Yuan in January and went into effect in February, has put achieving net-zero emissions by 2050 into law.
Notably, the legislation has also established a carbon border adjustment mechanism (CBAM), or tax on imports of carbon-intensive products designated by regulatory authorities.
As a result, Taiwan is now legally bound to ensure that greenhouse gases emitted would be no more than the amount removed from the atmosphere by 2050, according to the NDC.
In addition, the new act has laid out a legal base for the government for carbon fee collections and carbon pricing, while proving incentives to cut emissions, the NDC said.
Emission reductions are very costly to companies in some cases, so when a company is unable to reduce its emissions, it can purchase a carbon credit through a carbon exchange as a way to offset its emissions, analysts said.
The NDC's statement came after the Taiwan Stock Exchange (TWSE) announced Thursday that it will team up with the Cabinet's National Development Fund to open a carbon exchange.
Registration for the new carbon credit transaction platform is scheduled for mid-2023, with preparatory work currently underway, according to the TWSE.
A carbon exchange refers to a digital platform that enables buyers and suppliers to trade large volumes of high-quality carbon credits across a number of standardized contracts.
The TWSE said its task force had been handling the preparatory work for the exchange since 2022.
The TWSE added the task force had visited Japan, South Korea and Singapore to learn about the establishment of such an exchange.
Soon after the passage of the Climate Change Response Act in January, the TWSE said, it has sped up the pace by working with the Securities and Futures Bureau under the Financial Supervisory Commission and the Environmental Protection Administration (EPA), the Ministry of Economic Affairs to push for the establishment of a carbon exchange.
In the near future, the TWSE will call on business groups and environmental protection activist groups for the matter.
Under the TWSE's plan, as a carbon credit transaction platform, the upcoming carbon exchange will operate a wide range of businesses such as domestic and international carbon credit transactions, services and education about carbon credit transactions.
Meanwhile, the presence of the carbon exchange is expected to help local enterprises to fulfill the carbon neutrality targets and in turn reduce the economic impact on such firms, according to the TWSE.
Through the carbon exchange, the TWSE said, Taiwanese and foreign companies are expected to increase their exchanges and cooperation in emission reductions to help Taiwan strengthen its efforts in economic development, environmental protection and social sustainability.
The NDC said in the initial stage, the TWSE and the National Development Fund will jointly inject funds into the carbon exchange and the two organizations will gradually strengthen the transaction platform and ultimately provide a comprehensive carbon credit exchange mechanism for Taiwan in accordance with the EPA's rules.
In March, the government released the government's roadmap for achieving net zero emissions by 2050.
According to the roadmap, 60-70 percent of Taiwan's electricity needs in 2050 will be met by renewables, with another 9-12 percent coming from hydrogen and 20-27 percent coming from fossil fuels with carbon capture, utilization and storage capabilities.
