Businesses Enter the Era of Carbon Pricing!! What is Carbon Credit?

Why Charge for Carbon Emissions?

In the past, carbon dioxide emissions were costless, leading to a continuous rise in global carbon emissions. However, in recent years, from the EU to Taiwan, various mechanisms have been implemented to make carbon emissions costly, a process known as carbon pricing. Carbon pricing (setting a price for greenhouse gas emission equivalents, using “per metric tonne of carbon dioxide equivalent” as the pricing unit) has become an internationally adopted carbon cost management tool.

What is a carbon fee? Who will be charged?

Another form of carbon pricing is through carbon fees.
In early 2023, Taiwan amended its “Greenhouse Gas Reduction and Management Act” to the “Climate Change Response Act.” This amendment incorporates carbon fees, expected to take effect in 2024. The first wave of companies to be charged carbon fees will be 287 large carbon emitters with annual emissions exceeding 25,000 metric tons.

When will Taiwan’s carbon trading platform launch?

When will Taiwan’s carbon trading platform launch? In addition to carbon fees, Taiwan has established a carbon trading system, with its first officially led carbon trading platform launched on August 7, 2023.
Taiwan’s carbon credit trading officially launched on December 22, 2023! The opening of the international carbon credit trading platform and the listing of the first batch of international carbon credits marks a historic first for Taiwan.

Chairman Gong stated that carbon credit trading is crucial for industrial development. This platform provides a legal channel for large and small and medium-sized enterprises (SMEs) to obtain carbon credits, eliminating the need for overseas transactions. The carbon credit trading platform facilitates easier access to carbon credits for SMEs and is an important mechanism and practice for achieving a fair transition.

Chairman Gong emphasized that following the launch of the international board of the carbon credit trading platform today, a second and third board will be established in the future, with domestic carbon credit trading expected to launch in 2024.

What are carbon credits? How are carbon credits obtained?

Carbon credits refer to the right to emit greenhouse gases.
Carbon credits are generated in two ways. First, governments enact laws to issue annual carbon emission allowances to companies and government agencies based on total carbon emission controls and reduction targets. These allowances are also known as “mandatory carbon credits.” Second, companies voluntarily set their own reduction quotas due to participation in international carbon neutrality initiatives, supply chain requirements, or ESG considerations. These credits are then used to apply for certification from domestic and international organizations through renewable energy, afforestation, and other carbon reduction projects, obtaining carbon credits, also known as “voluntary carbon credits.” These credits are used to offset a company’s carbon emissions, thus achieving its carbon reduction goals.

Source：
1. https://www.cw.com.tw/article/5125529
2. https://www.managertoday.com.tw/articles/view/67224??utm_source=copyshare

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