Carbon rights trading system officially launched
Taiwan has officially entered the era of pricing carbon emissions. The Ministry of Environment recently (7/1) issued the "Greenhouse Gas Reduction Credit Trading Auction and Transfer Management Measures", which will be officially implemented on August 15 this year. This symbolizes the official launch of Taiwan's carbon rights trading system, providing enterprises and governments at all levels with an open and transparent voluntary reduction trading market mechanism. According to this measure, in the future, enterprises or governments at all levels can implement voluntary reduction projects, and the reduction credits (carbon rights) obtained will be traded on the carbon rights exchange, providing services to those who need to pay carbon fees or make incremental offsets. Buy pipes.
The Carbon Rights Trading Measures contain a total of 38 articles, which regulate in detail the various stages of carbon rights holding, trading, auction, transaction and use cancellation. This method applies to domestic carbon rights trading or auction targets, including three types of reduction quotas: "preliminary projects", "exchange projects" and "voluntary reduction projects". Transaction methods include "priced transaction", "agreed transaction" and "auction". Among them, pricing transactions and auctions are conducted on the carbon rights exchange platform, while agreement transactions require private agreement between both parties and then be reported to the Ministry of Environment for disclosure.
Trading platform and management specifications
In order to centrally manage the reduction quota trading market and avoid carbon fraud and market speculation, all future carbon rights transactions must be conducted on the platform established by the Carbon Exchange. According to the regulations of the Ministry of Environment, general private entities are prohibited from providing platforms to engage in the intermediation, agency sales or trading of reduction quotas. Each unit reduction quota is based on 1 metric ton of carbon dioxide equivalent. Transaction and auction related information will be disclosed on the trading platform for inspection and inquiry by all walks of life, effectively avoiding concerns about greenwashing. Currently, carbon rights trading is limited to businesses as buyers, and individual participation is not yet open.
Huang Weiming, deputy director of the Climate Change Administration of the Ministry of Environment, said: "Considering that companies need to purchase reduction credits to offset their own carbon emission responsibilities, buyers of pricing transactions and auctions will need to pay a handling fee of 5% of the transaction price. For agreement traders, then You need to pay 5% of the carbon fee rate multiplied by the transaction volume of each reduction quota unit or 5% of the last transaction price of the same type of project unit.”
Image source: Key points of carbon rights trading management measures in "Crypto-City Mapping"
Expected benefits and future prospects
The Ministry of Environment predicts that the first domestic carbon rights transaction will be listed on the carbon exchange as soon as the end of September to early October this year. Prior to this, the carbon exchange needs to complete the system interface and find a carbon rights enterprise willing to list it. Huang Weiming pointed out that business tax will be levied on the sales reduction quota of carbon rights. This part has been discussed with the Ministry of Finance and will be levied in accordance with the method of renewable energy certificates.
The international carbon rights trading on the Taiwan Carbon Rights Exchange was officially launched in December last year. On the first day, a total of 27 domestic companies purchased 88,000 metric tons of international carbon rights, with a transaction volume of approximately US$800,000. Lin Xiuming, chairman of the Carbon Rights Exchange, said he hopes to launch a domestic carbon rights platform in the second half of 2024 to move Taiwan towards a new milestone of net-zero emissions.
Environment Minister Peng Qiming said at a press conference that promoting carbon fee collection and voluntary reduction trading mechanisms in parallel is to realize Taiwan’s carbon pricing system and gradually implement the net-zero transformation goal. In the future, the reduction quotas obtained by enterprises and governments at all levels will be used by other enterprises to deduct carbon fees, offsets and related environmental declarations through an open and transparent trading market. This will help Taiwan maintain its position in the international carbon market. competitiveness and effectively promote domestic environmental protection policies.
Source: China Central Radio, Minister of Environment Peng Qiming
Challenges and prospects of carbon rights trading
The launch of carbon rights trading is a big step for Taiwan's environmental policy, but it still faces three major challenges:
How to ensure the transparency and credibility of transactions and avoid market manipulation and speculation is a big test.
The establishment of a carbon rights trading market requires investment of time and resources, and the improvement of relevant systems and training of personnel also need to be carried out simultaneously.
How to guide more companies to participate in voluntary reduction projects and actively engage in carbon rights trading is also a focus that needs to be paid attention to in the future.
However, these challenges also mean greater opportunities. As the carbon rights trading market matures, companies will invest more and more in carbon reduction, which will not only help companies fulfill their social responsibilities, but also promote the development and application of green technology. In the future, with the linkage and cooperation of the international carbon market, Taiwan is expected to become an important carbon rights trading center in the Asia-Pacific region and contribute to the response to global climate change.
In short, the official launch of Taiwan's carbon rights trading system is an important milestone, symbolizing Taiwan's active advancement in environmental protection policies and carbon pricing systems. It is expected that more enterprises and government units will participate in carbon rights trading in the future and jointly promote Taiwan's green transformation and sustainable development.