The Ministry of Environment (MOE) announced regulations governing how entities can produce carbon credits or offset their emissions as part of Taiwan's bid to hit its net-zero target on Thursday.
The Climate Change Response Act, a framework law, was promulgated this February, with the MOE stating then that detailed subsidiary regulations would be announced before the end of the year.
Three regulations on emission registration and verification were announced earlier this year, while those related to the carbon fee -- the rate and who will have to pay it -- which have attracted the most attention and debate, are slated to be announced in December.
On Thursday, the MOE's Climate Change Administration announced two new regulations that will oversee how entities manage their carbon emissions, one that governs "voluntary reduction projects" by businesses and government entities, and one that governs emissions generated by businesses on development and construction projects.
The first regulation states that enterprises or government entities that emit less than 25,000 metric tons of carbon dioxide -- and are therefore not subject to the carbon fee -- will be eligible to undertake "voluntary carbon emission reduction projects" that follow the internationally accepted MRV (measurable, reportable and verifiable) guidance, that was first proposed in the 2007 Bali Action plan.
The reductions will have to have the characteristics of "additionality, avoiding overestimation, permanence, exclusive claim to GHG reductions, and avoiding social and environmental harms," which according to the administration are characterized as "high-quality offsets," as per the carbon offset guide published in 2019 by the Stockholm Environment Institute and the GHG Management Institute.
Climate Change Administration Deputy Director-General Huang Wei-ming (黃偉鳴) explained that "additionality" meant that reductions would have to be made in addition to what entities are already doing to conform to the country's existing environment-related legislation, for example, the Air Pollution Control Act.
The voluntary projects will be categorized into "removal type" and "reduction or avoidance type," with carbon removal as the elimination of existing carbon emissions and carbon reduction or avoidance as the technology-based prevention of emissions being produced.
Those that emit more than 25,000 metric tons a year -- the carbon fee payers -- will not be eligible for the "voluntary projects" as they are obligated to cut emissions, according to the administration.
They will be able to purchase carbon credits produced by those who participate in voluntary projects to partially offset their carbon fees, and if they reach a certain reduction goal, they will also be granted a preferential carbon fee rate.
In response to the criticism from environmental groups who have spoken out against a preferential rate because they claim it defeats the purpose of carbon pricing, Administration Director-General Tsai Lin-yi (蔡玲儀) emphasized that since the carbon fee is "not a financial tool" in itself, but simply a way to encourage entities to try and reduce their emissions, a preferential rate is justifiable if effective and verified efforts have been made.
The second regulation, announced on Thursday, will require those setting up new factories that will emit more than 25,000 metric tons a year, plus development or high-rise construction projects, to partly offset their newly generated emissions, by either buying carbon credits from voluntary projects or by implementing other specific offsetting measures.
Those offsetting measures, which would generate "quasi-carbon-credits," include replacing motorcycles that run on fuel with electric ones, using high-efficiency air conditioning, and changing old agricultural machines to electric ones.
Huang said the objective of "quasi-carbon-credits" -- which in the administration's official terminology are known as "effective reductions" -- is to shift the burden of promoting the use of electric motorcycles and other energy-efficient products from government to big business.
