On October 2, 2024, Taiwan will mark a significant milestone in its fight against climate change with the launch of the Taiwan Carbon Solution Exchange (TCX), its domestic carbon credit exchange platform. This initiative stems from extensive deliberations between TCX and Taiwan’s Ministry of Environment on the trading of domestic carbon credits, following the enactment of relevant regulations on August 15, 2024.
The introduction of this trading platform is poised to play a pivotal role in Taiwan’s efforts to reduce carbon emissions, with a focus on aligning the nation with global carbon trading mechanisms and fostering a more sustainable industrial structure. Initially targeting entities planning new factories, the platform will cater to those emitting over 25,000 metric tons of carbon dioxide equivalent annually, as the carbon fee scheme for such entities is yet to be enforced.
Current regulations mandate new large-scale factories and high-rise construction projects to offset their emissions by purchasing carbon credits from voluntary projects or implementing other offsetting measures, such as adopting high-efficiency equipment and energy-saving technologies. Entities emitting below 25,000 metric tons annually can initiate voluntary carbon emission reduction projects that adhere to internationally accepted standards for measurability, reportability, and verifiability (MRV). The carbon credits generated from these projects will be available for sale on the TCX platform, primarily catering to buyers looking to fulfill environmental assessment requirements for construction and development projects.
The TCX, operational since December 2023, stands as Taiwan’s sole certified platform for trading international and domestic carbon credits. It serves as a transparent marketplace where enterprises can trade, transfer, and auction carbon credits, with a core mission of establishing a robust carbon trading market that complements the international framework. This initiative gains significance in light of Taiwan’s ambitious goal to achieve net zero emissions by 2050, underpinned by a comprehensive roadmap focusing on energy transformation, industrial innovation, lifestyle changes, and social inclusion.
Taiwan’s carbon credit exchange will initially prioritize the purchase of high-quality carbon credits from the international market to bridge the gap in domestic emission reductions. This strategy aims to meet the immediate needs of Taiwanese enterprises as the country enhances its domestic emission reduction capabilities, ultimately working towards a more self-sufficient carbon credit market within Taiwan and reducing reliance on international credits.
The platform enforces stringent regulations to ensure transparency and prevent greenwashing, allowing only sellers with government-monitored emission reduction projects to auction or sell domestic carbon credits. Buyers are prohibited from reselling traded or auctioned domestic carbon credits, a measure intended to stabilize the market and maintain its integrity.
The introduction of the TCX is expected to have a significant economic impact, potentially attracting substantial private investment amounting to over NT$4 trillion (approximately US$131 billion) by 2030. This influx of capital could create over 550,000 jobs in sectors related to carbon reduction and sustainability, contributing to Taiwan’s broader environmental objectives by encouraging companies to invest in emission reduction technologies and projects, thereby fostering innovation in green technologies.
The success of the TCX hinges on various factors, including active business participation, the effectiveness of government policies, and the platform’s integration with international carbon markets. Taiwan’s industrial sector, a major contributor to carbon emissions, will play a crucial role in this transition, necessitating adaptation to new regulations and market dynamics, potentially requiring significant operational changes and investments in sustainable practices.
Moreover, the TCX’s success will rely on its ability to evolve alongside global carbon trading systems, ensuring Taiwan’s competitiveness and compliance with international standards. This entails adherence to international carbon neutrality standards and the recognition and valuation of domestic carbon credits in the global marketplace.
The launch of Taiwan’s domestic carbon credit exchange platform in October signifies a pivotal moment in the country’s climate strategy. By establishing a structured and transparent market for carbon credits, the TCX aims to expedite Taiwan’s shift towards a low-carbon economy, fostering innovation and economic growth.
