Policy and Act

Actions to reduce greenhouse gas emissions are significantly less costly than the potentially catastrophic consequences of inaction. Furthermore, the transition to a low-carbon economy will provide enormous opportunities for technological innovation, economic growth, and job creation, while improving energy security. In order to promote sustainable development and to maintain abundant natural ecosystems in Taiwan, the government has already started to address climate change and to fulfill its duty as a member of the global village. The following policies and measures have been implemented to reduce GHG emissions:

Taiwan’s GHG Reduction Act

On 4 February 2008, the Executive Yuan (the executive branch of the ROC Government) passed the draft GHG Reduction Act (“Bill”), which was then submitted to the Legislative Yuan for deliberation. Jointly developed by the government and the private sector, the Bill establishes a framework to regulate GHG emissions based on emission efficiencies and new-source emissions, as well as penalties for non-compliance. In addition to serving as the legal basis for developing and implementing domestic GHG emission reduction measures, the Bill is also expected to demonstrate to the international community Taiwan’s willingness to participate in global actions to reduce GHG emissions and to fulfill its responsibilities as a member of the international community. If the legislative process proceeds on schedule, Taiwan will likely become the first country with GHG reduction legislation among developing countries. The key elements of the Bill (5 chapters with 30 articles) are outlined below:

Framework of The GHG Reduction Act

Before the Bill takes effect, voluntary agreements with industries and incentives for early action are being promoted. When the Bill becomes effective, emission permit system, inventory verification and reporting, as well as emission performance standards would be enforced. Finally, when the national emissions target is established, a cap-and-trade scheme would be enforced. 

GHG Emission Permits:

Designated emission sources must conduct annual emission inventory and verification, then register on the EPA platform. Existing, new or modified emission sources above certain level must apply for an emission permit from the EPA, and operate, monitor, record and report emissions in accordance with the permit conditions. Related management regulations will be set by the EPA.

GHG emission performance standards:

Designated emission sources to comply with GHG emission standards (Benchmark, e.g. GHG emission per ton of steel production) based on established emission intensity for new/existing emission sources, installation under various sectors, products, etc. The standards would be set by the EPA in consultation with the central industry competent authorities, such as the Bureau of Energy and the Industrial Development Bureau.

Cap and Trade scheme:

In the final stage of the GHG management, Taiwan will set a national emissions target and implement a domestic cap-and-trade system, as a part of our economic and financial policy instruments to reduce GHG emissions. The timing and stringency of our target setting would depend on the progress of international climate negotiations, as stipulated in the Bill.

 

Step-Wise Reduction Strategy

Cap and Trade Scheme

 

Taiwan’s Sustainable Energy Policy

The Ministry of Economic Affairs (MOEA) develops the Sustainable Energy Policy which targets energy, the economy and the environment, leading to 3 wins, together with 2 highs (high efficiency and high added value), and 2 lows (low emission and low dependency) on clean energy sources and energy saving.

Policy Objective: A Three-win Solution for Energy, Environment and Economy

Taiwan is lacking in natural resources and constrained by limited environment-carrying capacity. In order to create a three win solution in energy, environment, and economy, sustainable energy policies should support the efficient use of limited energy resources, the development of clean energy, and the security of energy supply. Our targets are:

  1. Improving energy efficiency
    The goal is to improve energy efficiency by more than 2% per annum, so that when compared with the level in 2005, energy intensity will decrease 20% by 2015. Supplemented by further technological breakthroughs and proper administrative measures, energy intensity will decrease 50% by 2025.
  2. Developing clean energy
    Increase the share of low carbon energy in electricity generation systems from the current 40% to 55% in 2025.
  3. Securing stable energy supply
    Build a stable energy supply system to meet economic development goals, such as 6% annual economic growth rate from 2008 to 2012, and US$30,000 per capita income by 2015.

Policy Principles

The basic principles of a sustainable energy policy is to establish a high efficiency, high value-added, low emission, and low dependency energy consumption and supply system.

  1. High efficiency: improve energy consumption and transformation efficiency.
  2. High added value: increase the added value of energy consumption.
  3. Low emission: adopt energy supply methods and consumption practices that ensure low carbon emission and low pollution.
  4. Low dependence: decrease the dependence on fossil fuels and imported energy.

Provide a comprehensive regulatory framework

  1. Facilitate the legislation of the “Greenhouse Gas Emissions Reduction Act” to substantially build emission reduction capacity and enforce reduction measures.
  2. Facilitate the legislation of the “Renewable Energy Development Act” to develop clean energy.
  3. Draft and legislate the “Regulations on Energy Tax” to reflect the external cost of energy consumption.
  4. Amend the “Energy Management Act” to effectively promote energy saving measures.

Action Plans

The strategy framework of sustainable energy policy is divided into two parts: cleaner energy supply and rationalized energy demand.

  1. Cleaner Energy Supply: restructure energy mix and improve energy efficiency.
  2. Rationalized Energy Demand: promote energy conservation schemes in various sectors.

policy 01

policy 02

The Renewable Energy Act

  • The bill passed legislation in the Legislation Yuan on June 12, 2009, laying Taiwan's foundation for long-term renewable energy development. To the energy sources, it will enhance self-sufficiency as well as diversification. And, to the environmental i s sues , i t wi l l cer tainl y have ef fect on greenhouse gas emission reduction, and also contribute to the emerging renewable energy industry.
  • Main prescription includes: Scheming the increase capacity of 6.5 million kW renewable energy up to 10 million kW in total within the the next 20 years upscaling the usage with large volume; Through the renewable energy purchase mechanism, the incentives on demonstration programs and deregulation to enhance encouragement for the settings of renewable energy facility by the public; furthermore, the promotion goal of the thermal applications will be setting to upscale the proportion of Taiwan's self-produced energy to make full application on the potential of renewable energy in Taiwan.
  • For the purchase mechanism of renewable energy electricity, provide incentive on reasonable profit to the renewable energy facility power providers together with the parallet connection from the electrical power grid service providers and the wholesale purchase of electricity to the renewable facilities. The price of the wholesale purchase is determined according to the rates and formula approved and announced by the committee of relevant ministries, scholars, experts and organizations organized by the Ministry of Economic Affairs that will be revised yearly. Public hearings will be called if necessary. It is an open and transparent process.  
  • For the incentives on demonstration programs, in additional to the above purchase mechanism, incentive will be provided to those renewable energy power generation facilities with potentials on development and technologies at the initial stage, within a certain period. For those of thermal applications, in additional to the incentive and subsidy from the Petroleum Fund, the agricultural sector will provide incentive, through the Fund for Agricultural. Development, to the producers of biofuels on applying fallow lands in planting energy crops.  

Partial Amendment in Energy Management Act

  • The amendment of several articles passed the legislature on June 9, 2009
  • Explicit regulations on the facilities of lighting, electricity consumption, air conditioning and refrigeration of department stores, office buildings and other public places. For example, a maximum f ine of NT$100,000, wi th double f ine on subsequent violation, will be issued on overcooling or cool leakages in violation of the energy conservation article and if no improvement is made after warning.
  • Regulate the energy consumption standards for vehicles and performance standards for electrical appliances, equipment industry, to achieve the purpose of energy conservation and carbon reduction.
  • Government agencies should formulate the “Framework for Energy Development” as the overall fundamental for the development of energy policy.

Sustainable Green Energy Industry Proposal

  • The cabinet approved the program developed by the Ministry of Economic Affairs on April 23, 2009 selecting solar photovoltaic, LED lighting, wind power, biofuels, hydrogen energy and fuel cells, Energy Information and Communication, and electric vehicles as focus industry. The government will invest NT$25.0 billion to implement renewable energy and energy conservation as facility and subsidy, and NT$20 billion on research and development in the next five years. It is expected to stimulate NT$200 billion private investments based on the estimation on the scale of production. Through the growth of demands on Global Green Energy, the selected industries, and supporting with the industry characteristics and technology potential, it is expected to further promote the intense development of related domestic industries.
  • The Premier also instructed that the “National Energy Science and Technology Initiative” of the National Science Council be carried out in step with the implementation of MOEA’s Green Energy Industry Developing on key technology researches and developments and the nurture of the manpower as the foundation of strengthening the green energy industry development; the Ministry of Economic Affairs should establish the green industry services team, in situ realize the actual needs of the industry and assist the industry to solve difficulties on technology breakthrough, investments and operations, so that industries can be profoundly affected by the attentiveness of the government; a certain proportion, as of 10%, of the 4-year NT$500 billion “The Recovery Initiative to Expand Public Construction Investment” will be invested in green energy or green engineering; and requests all ministries to realize the concept of green energy, energy conservation and carbon reduction during the project implementation, which shows the emphasis and the determination on the implementation with environmentally friendly renewable energy from the government.

"The measure of tariff discount incentive on energy conservation"

  • To promote energy conservation and carbon reduction policy, the Ministry of Economic Affairs and the Taiwan Power Company have been carrying out the "tariff discount incentive measure on energy conservation" since July 1, 2008. The applied targets are residential customers, elementary schools and junior high schools. Those whose average daily consumption falls below the same period of the previous year are entitled to tariff discounts. The discount incentives adopt a three-level system; consumption lower than 5%, consumption lower than 5% to 10%, and above 10% comparing to the same period of the previous year will be awarded tariff discount of 5%, 10% and 20% respectively.
  • Six months after the implementation of the "tariff discount incentive measure on energy conservation," 40% of the total targets are eligible for the incentives and the saving accumulated to 2.59 billion kWh, with discount amount NT$3.84 billion. Upon implementation on energy conservation and carbon reduction through the users of residential sector and elementary and junior high schools in person shows significant achievement. Adopting CO2 emissions of 0.637 kilograms per kwh of electricity, the total electricity saving is counted as 1.65 million tonnes of CO2 emissions reduction during the six-month period, which is eqivalent to 1,722 Da-an Forest Park’s volume in absorbing CO2 annually, based on 958 tonnes of CO2 is absorbed per Da-an Forest Park, the major Taipei City Forest Park, per year.

"Extensive Lighting Revolution,"

  • The Energy Bureau indicated that the consumption of electricity from lighting was around 26 billion kWh in Taiwan, accounting for 11.3% of the total 2,298 billion kWh of electricity consumption. To promote energy conservation in lighting, the Energy Bureau has initiated Taiwan's "lighting revolution” with preludes of “promoting 585 incandescent replacement program”, “the retirement of high power-consuming incandescent lights from government agencies, schools, residences, markets, hotels, department stores and others”, “demonstration program on promoting energyefficient new technology LED lightings such as full traffic LED lights, LED street lighting etc.” , “promoting and demonstration in phases to high-efficiency lighting and high-quality design” and “the concept of energy conservation monitoring and control” since 2008 with good achievements over the past year.
  • With active public participation, the sales volume of the energy-saving light bulbs has surpassed the incandescent bulbs for the first time in 2008, according to the latest market survey. It shows that the incandescent replacement project has created tangible results. According to the incandescent light bulbs use survey in 2008 by ITRI, the domestic market size in 2007 was approximate 22.18 million which had dropped to 18.97 million in 2008, with a rate of 14.5% drop. The overall benefit of saving about 116 million kWh in electricity, reducing nearly 74,000 tonnes of carbon dioxide emissions. Observing the market size of energy-saving light bulbs in Taiwan from 2006 to 2008, the number of energy-saving light bulbs in 2006 was about 15.00 million units, and increase to 21.13 million units in 2008, with a growth of 40.9%. The fact that the number of the energy-saving light bulbs in the market has exceeded incandescent bulbs for the first time in 2008 indicates the "585 incandescent replacement program" has achieved initial suucess, and indirectly brought up the annual production of domestic energy-saving light bulbs together with industrial benefits.

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