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Taiwan: Interim Cap-and-Trade Related Programs Introduced as Law Awaits Enactment

(Sept. 23, 2010) On September 10, 2010, Taiwan's Environmental Protection Administration announced the implementation of measures aimed at encouraging domestic companies to cut carbon dioxide emissions. The measures are set forth in the “Executive Yuan [Cabinet] Environmental Protection Agency Rules on Promotion of the Greenhouse Gas Early Action Project and Offset Project.” Under the Rules, companies can exchange the emissions they have voluntarily reduced for carbon credits, as part of a “cap-and-trade” scheme adopted by the EPA as an interim step while Taiwan's Greenhouse Gas Emissions Reduction Act, under which a complete emissions trading scheme will be introduced, awaits legislative approval. The EPA plan has two components, an early action credit program and a carbon offset program; either program will enable the participant company to offset future emissions with carbon credits or to sell them to other enterprises. (Kwangyin Liu, EPA Announces Taiwan's First Carbon Offset Programs, TAIWAN TODAY (Sept. 13, 2010), mily: 'Times New Roman'”>
; Press Release, EPA, EPA Takes Steps Toward New Milestone in Approving Greenhouse Gas Reduction Quotas and Promoting Reduced Carbon Emissions [in Chinese] (Sept. 10, 2010), mily: 'Times New Roman'”>
[includes link to text of the Rules].)

In the first stage of the plan, qualified participants are the semiconductor, optoelectronic, and cement industries. Under the early action program, the participant companies would receive carbon credits in proportion to their reduced carbon emissions (based on a comparison with EPA standards). Under the offset program, companies must submit their plans for carbon reduction in advance and follow reduction measures prescribed by the United Nations or the EPA, in order to receive carbon credits equal to the cuts in emissions they achieve. The petrochemical industry will not be included in the EPA plan until related patent questions and carbon reduction verification issues are resolved, the agency indicated. (Liu, supra.)

The EPA also issued on September 10 the “Administrative Rules of the Executive Yuan Environmental Protection Agency for Greenhouse Gas [Plan] Examination and Registration.” This set of rules provides explicit norms for industries to follow to achieve compliance when submitting applications to the EPA for participation in either type of plan mentioned above, be they units that commit to undergo examination and registration at the time of an environmental impact assessment investigation or ones that participate in a government-guided examination and registration process. (Press Release, EPA, Develop Internationally Aligned Methods of Examination and Registration, Establish a Solid Foundation for Greenhouse Gas Management! [in Chinese] (Sept. 10, 2010),
[has link to the text of the Rules]).

In another development, the Executive Yuan announced on September 20 that over the next six years, from 2010 to 2015, the government will spend NT$3.2 billion (about US$100 million) in developing intelligent green buildings. The aim of the investment is primarily to improve energy saving in residential and commercial units and reduce their carbon emissions; to that end, “construction will incorporate high-tech systems for home security, energy monitoring, water conservation, fire prevention and healthcare.” (Cabinet Champions Smart Green Buildings, TAIWAN TODAY (Sept. 21, 2010), [from ECONOMIC DAILY NEWS].) The project will also foster research on the building of green factories and the creation of cleaner production processes. The government expects to attract an additional NT$70-80 billion (about US$2.2-2.5 billion) in private investment in the scheme. Construction of intelligent green buildings is one of the four government-promoted intelligent industries, along with cloud computing, design of intelligent electric vehicles, and commercialization of patents. (Id.)