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Taiwan: Renewable Energy Law and Amendment of Energy Management Law

(Aug. 24, 2009) On July 8, 2009, Taiwan President Ma Ying-jeou promulgated the Statute for Renewable Energy Development. On the same day, the Energy Management Law (issued and in force on August 8, 1980) was amended. Both laws form part of the government's new initiative to expand Taiwan's green energy industry.

Statute for Renewable Energy Development

The Statute for Renewable Energy Development may help create over 10,000 jobs related to the clean-energy industry and generate an estimated NT100 billion (about US$3.04 billion) over the next couple of years, according to Taiwan's UNITED DAILY NEWS. The law “is part of the government's plan to reduce carbon dioxide emissions to 2008 levels by 2016, and to 2000 levels by 2025.” (Taiwan Passes Major Green Energy Bill, ENERGY DAILY, June 13, 2009, available at
.) Yeh Hui-ching, Director of the Bureau of Energy of the Ministry of Economic Affairs (MOEA, the competent authority at the central level designated under the Statute) declared that the Statute's passage “has formally ushered into Taiwan the era of alternative energy development and related applications.” He further stated:

It means that in the future, the development and application of renewable, pollution-free sources of energy that produce low amounts of carbon-dioxide emissions will be given priority in terms of low-carbon energy development in the country. … The enactment of the statute represents the beginning of a linkage between energy and environmental conservation.

(Deborah Kuo, Taiwan Green Energy Industry Set to Boom After New Law Enacted, THE CHINA POST, June 14, 2009, available at

Reportedly, the delayed passage of the bill, which was mired in the legislature for nearly a decade, was due to opposition from the state-run Taiwan Power Company. (Sabrina Deparine, Taiwan Passes Green Energy Law, REHUB, June 17, 2009, available at

The stated purpose of the Statute for Renewable Energy Development is to expand the utilization of renewable energy, enhance the diversification of renewable energy, improve environmental quality, give impetus to related industries, and promote the nation's continuing development. The Statute defines “renewable energy” as “solar energy, biomass-energy, geothermal energy, ocean energy, wind power, non-pumped storage water power, energy produced from directly used or from processed domestic general waste products and general industrial waste products and the like, or other energy determined by the central authorities in charge to be continually usable” (art. 3). (The Statute for Renewable Energy Development, 6871 THE GAZETTE OF THE OFFICE OF THE PRESIDENT 13-21 (July 8, 2009), available at [hereinafter GAZETTE].)

For 20 years, beginning from the date of implementation of the Statute, the MOEA is to biannually stipulate a renewable energy promotion target and the proportion of it constituted by each category of renewable energy. Government incentives under the Statute include low-interest loans and subsidies for purchases of equipment aimed at increasing the generating capacity of renewable energy in Taiwan to between 6.5 million and 10 million kilowatts. Ten percent of the funding for public construction projects launched as part of the government's public works stimulus package is to be set aside for those that foster renewable energy or energy-saving, the Executive Yuan has also mandated. According to Yeh, “[t]hese plans will in turn form the foundation of green business in the country.” (THE CHINA POST, supra.)

A fund for renewable energy development will be established based on a fixed monetary amount (determined by the MOEA) to be paid annually by electricity companies and installations whose electric-power generating equipment for their own use exceeds a certain capacity (also determined by the MOEA), based on the total amount of energy generated but excluding any portion generated by renewable energy. When necessary, funds can be appropriated in the government budget. Applications of the fund include: renewable energy electricity price subsidies, equipment subsidies, demonstration grants and promotional uses, and other related applications of renewable energy development approved by the MOEA. (Art. 7, GAZETTE, supra).

Under the Statute, the state-run Taiwan Power Company is permitted to purchase electricity generated by private renewable energy investors; electricity enterprises that purchase wholesale or produce renewable energy electricity may also apply for a subsidy for the expenses incurred. (CHINA POST, supra.) There are other incentives, e.g., demonstration grants for renewable energy power-generating facilities in the early stages of technological development that show potential; preferential installation by the government of renewable energy power generation facilities in public works or buildings whose construction or reconstruction meets the requisite conditions for such installation; thermal use incentive grants for solar thermal energy utilization, bio-mass energy fuel, and “other renewable energy thermal-use technology that has development potential”; and an import tariff exemption for renewable energy power generation facilities. (Arts. 10-13 & 16, GAZETTE, supra.)

Amended Energy Management Law

The Energy Management Law newly specifies that the central authority in charge (the MOEA) is to draft energy development guidelines, to be implemented subject to Executive Yuan ratification, in order to ensure a stable and secure energy supply for the whole country. It also now specifically states that facilities used for lighting, power, heat, air conditioning, freezing and chilling, or other forms of energy consumption by existing energy users designated by the MOEA must conform to energy conservation provisions stipulated by the MOEA. The amended law provides that energy equipment and appliances as well as vehicles that lack labeling on the energy consumption volume or energy efficiency rate cannot be exhibited or sold in the domestic market.

The law also newly stipulates that investors in new or expanded energy-using facilities that have large-scale production plans, if their volume of energy use will create a major impact on the state's overall energy supply and demand and structure, as well as on regional equilibrium, are required to submit a prospectus on their energy use to the licensing authority and to begin the new construction or expansion only after approval has been given by the MOEA. (Amendment to Energy Management Law, 6871 THE GAZETTE OF THE OFFICE OF THE PRESIDENT 8-12 (July 8, 2009), available at

Takeoff Program

The above legislative actions come in the wake of the approval by the Executive Yuan (Cabinet), in April 2009, of the “Takeoff Program for the Green Energy Industry,” an umbrella plan for several initiatives to foster growth of the domestic renewable energy market. Under the Takeoff Program, NT$45 billion (about US$1.4 billion) will be invested over the next five years to spur the industry's growth from revenue of NT$160.3 billion in 2008 to NT$1.5 trillion by 2015, when it is estimated that T
aiwan's renewable energy industry will account for 6.6% of the domestic manufacturing industry and for the creation of 10,000 jobs. Of the NT$45 billion, NT$20 billion will be devoted to investment in research and development, and NT$25 billion will be for investment in renewable energy and energy-saving facilities and grants. (Taipei, Taiwan: Taiwan Government Initiatives to Stimulate Green Energy Industry, SOLARBUZZ, July 8, 2009, available at; Press Release, Executive Yuan, Government Unveils Bold Green Energy Plan (Apr. 24, 2009), available at

According to the MOEA, the Takeoff Program will be divided into two stages. The first stage, focusing on solar energy and light emitting diodes (LEDs), is “designed to make Taiwan one the world's top three producers of solar energy batteries and the world's largest supplier of LED lights and modules.” (SOLARBUZZ, supra.) Taiwan also plans to change all of the country's traffic signals to LEDs and to complete construction of the largest solar power plant in Asia by 2011. The second stage will focus on wind power generation, biofuels, hydrogen energy, and fuel cells. One of the target products will be electric vehicles. (Id.)