Taiwan’s Climate Change Policies: Toward a Common Future

Dr. Hui-Chen Chien Counselor/Executive Director GHG Reduction Management Office Taiwan Environmental Protection Administration

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GHG Reduction and Management Act

Background

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COP 21 Taiwan

Outline 2

Taiwan’s Climate Policies

International Linkage & Partnership

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2

Background

Taiwan’s GHGs emissions 2013 Taiwan GHGs Emission: 281Mt carbon dioxide equivalents – Carbon dioxide occupies the highest proportion; the following emission in order is N2O, CH4, SF6, HFCs, PFCs, and NF3. – Energy sector occupies the highest proportion in the total emission of CO2, accounting for 89.07%。

Energy Sector 89.07% Industrial Process Sector 7.29% Waste Sector 0.001%

Ref: Taiwan EPA, 2014 Taiwan Greenhouse Gas Inventory Report, http://unfccc.saveoursky.org.tw/2014nir/uploads/00_abstract_en.pdf.

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Taiwan’s CO2 emissions by sectors • In 2013, CO2 emissions from fuel combustion were about 250.3

million tons of CO2e • Main emitters are energy and industrial sectors, which are the primary targets for emissions regulations

CO2 emissions by sector (excluding electricity consumption)

CO2 emissions by Sectors (including electricity consumption)

Source: 2013 CO2 emissions from fuel combustion, estimation by Bureau of Energy

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Taiwan CO2 Emissions and Intensity In 2013, CO2 emissions from fuel combustion were about 250 million tons of CO2e , lower than the historical high in 2007. CO2 Intensity has reduced form 0.0197kg CO2/US$ in 2007 to 0.0163kg CO2/US$ in 2013. Taiwan’s economic growth and greenhouse gas emissions are showing an inverse trend. 二氧化碳排放量 Total CO2 Emission

CO2 Intensity 二氧化碳排放密集度

0.025 0.0215

0.0206

250

245

Total CO2 200 Emission (Mt) 150

248

245 232 0.0197 0.0187

209

150

100

256

0.0211

0.02

253

250 249

0.0171 0.0181 0.0175 0.0165

Taiwan CO2 Intensity 0.0197kg CO2/US$ in 2007 0.0163kg CO2/US$ in 2013

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Taiwan CO2 Intensity

0.0163

0.015

CO2 Intensity (kg CO2/US$)

0.01

0.005

50

0 1990

0.02

排放密集度(kg CO2 /元)

二氧化碳排放量(百萬公噸)

300

0 1992

1994

1996

Reference：Bureau of Energy(2014)

1998

2000

2002

2004

2006

2008

2010

2012

年

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Climate Change Impacts on Taiwan Taiwan is very vulnerable to climate change impacts

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Taiwan’s Climate Policies

Carbon Reduction Legislations Adaptation

Mitigation • Energy Management Act • Renewable Energy Development Act • GHG Reduction and Management Act • Energy Tax Act (drafting)

Strategic Framework on Climate Change Adaptation • • • • •

Disasters Agriculture Energy Sector Water Resources Coastal Areas

․Health ․Biodiversity ․Infrastructure ․Land Use

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GHG Reduction and Management Act

Legislative history 2006.9 the first draft of the GHG Reduction Bill to the Executive Yuan 2006

2006.10 First Reading within the 6th term of the Legislative Yuan

2007.5 Reviewed by the Committee

2008.12 First Reading

2008 2008.2 The Executive Yuan resubmitted the Bill for the 7th term of the Legislative Yuan

2011 Reviewed by the Committee

2011

2012.4 Legislator Shao-Ping Hsu proposed alternative version

2012

2012.2 The Executive Yuan resubmitted the Bill for the 8th term of the Legislative Yuan

2013.5 Legislator Chiu-Chin Tien proposed alternative version

2013

2013.4 Reviewed by the Committee

2014

2015.3 Chiau, Wen-Yan GHG Manage ment Bill

2015.6.10-12 Party Caucus Negotiations

2015

2014.5 Legislator Ken-Te Chen and Ru-Fen Cheng alternative versions

2015.05 Reviewed by the Committee

2015.6.15

Second and Third Reading

• 9 years after first introduction, the Bill was reviewed again in May 2015 and re-named the “Greenhouse Gas Reduction and Management Act”. • After the party caucus negotiation on June 10-12, a consensus was finally reached, with the inclusion of six chapters with thirty-four provisions. • The Bill passed the second and third reading on June 15, 2015. 12

Key features of the GHG Act GHG Reduction Implementation Program Performance Standards Offset Project

Mitigation GHG Reduction and Management Act

Cap & Trade

National Climate Change Framework Adaptation

Requires relevant central government agencies to implement adaptation actions Encourage, incentives and reward

Green Growth

Boost the efficiency of resource and energy use Development of renewables

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Emissions Reduction Targets Long- term goal

• cut emissions by 50% below 2005 level by 2050 • The goal is subject to adjust according to international and domestic developments.

Periodic fiveyear reduction targets

• Determined by the principles for the selection of targets and control methods • Convening a Advisory Committee consisting of scientists, experts, and private groups to advise government to set the principles

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Reduction Target and Authorities Responsibilities Review Adjustment by considering UNFCCC or other international agreements and domestic circumstances

Agriculture

Resid/ Comm

Transport

Industry

Targets Not met

Executive Yuan approves National Climate Change Framework GHG Reduction Implementation Program (Central Competent Authority) Energy

Annual reports of reduction results

National GHG Reduction Target (50% below 2005 level by 2050)

Sectoral GHG Emission Control Action Plan （Central Industry Competent Authorities）

Improvement Plans (Central Industry Authorities)

GHG Control Implementation Plans (Local government authorities)

1. Executive Yuan convenes agencies/ stakeholders to draft, integrate, promote and sum up results 2. Items to be promoted by central agencies. 3. Sets targets in phases (5-year per phase) hold public hearing, submit to Executive Yuan for approval

1. Sectoral emissions target, timeline 2. Economic incentives 3. Periodic reviews

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Step-wise Reduction Strategy Legal Basis

Air Pollution Control Act

GHG Reduction and Management Act

Mandatory reporting Voluntary reduction

Control threshold

• Specified industries • Emissions over 25,000 tons CO2e

Management measures

• Emissions reporting • Verification bodies managemen t • Early action, offset

Performance standards rewards PromulgatedE mission Sources

• Set performance standards rewards • Encourage voluntary reduction

Cap-andTrade Reduction responsibilities for emission sources

• Gradual transition from free allocation to sales • Emission credits auction and trading system

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Mandatory GHG Reporting •

•

Taiwan EPA created the voluntary GHG reporting and inventory program in 2004. In 2013, the program was announced mandatory under the Air Pollution Control Act. Mandatory Reporting: • On December 2012, EPAT announced: • “GHG Emissions Reporting Rule” • “GHG Emissions Reporting - Designated Stationary Sources” •

•

reporting subjects divided into 2 groups

GHG Reduction and Management Act • Passed in June 2015, the mandatory reporting rules will be incorporated into this Act.

Mandatory Reporting

Voluntary Reporting

2004 Voluntary Reporting and Inventory

Dec. 2012 GHG Management rules and subjects announced under the Air Pollution Control Act

Jan. 2013

Reporting of 1st Group

Air Pollution Control Act

Jan. 2014

Jun. 2015

Reporting of 2nd Group

GHG Reduction and Management Act Passed

In Progress GHG Rulings will be moved to the new Act

GHG Reduction and Management Act

Voluntary Reduction Projects 

10 September 2010: “Principles for Promoting GHG Early Action Project and Offset Project” Main purposes:  Encourage participations on voluntary GHG reductions,  Provide guidelines for project approval and credit issuance,  Implement

EIA offset or carbon neutral

Early Action Program

Offset Project Program

Intensity-based reduction approach

Project-based (CDM-like)

Verified reduction credits EIA offset or carbon neutral

Measurable, Reportable,Verifiable

Early Action Credits  Designated Emission Intensity values 5 Designated Emission Intensities released on June 30, 2011: Cement, Semiconductor, Electrical generator, I&S and TFT-LCD sectors. Sector (process) Product (variations) Iron & Steel Billet, Carbon, H, (integrated, Elec.Arc, Stainless, Hot Rolled Rolling) Coiled Steel/Plate

Emissions Intensity 0.14 ~ 2.17 tCO2e/ t I&S product

Cement

Clinker

TFT-LCD

Glass Substrate (under 5th Gen.& above 5.5 Gen.)

0.821 ~ 0.917 tCO2e / tClinker 0.031 ~ 0.308 tCO2e / m2Glass Substrate

SemiConductor

Wafer (< 6”, 8”, 12” & 12”DRAM)

0.426 ~ 1.894 kgCO2e/cm2Wafer

Electrical Generation

Steam Turbine Unit (coal, oil, NG) Combined Cycle Unit (coal, oil, NG)

0.355 ~ 0.882 tCO2e/MWh

Emission intensity based on the product, scope, and installation types

 Update as of May 2015  200 Early Action applications submitted  69 under review  10 Withdrawn/rejected  121 passed

Domestic Offset Projects  Offset Program  Registration : project design document (PDD) validated by qualified* V/VBs with EPA registration approval  Issuance : monitoring report verified by qualified* V/VBs with EPA issuance approval

 Update as of May 2015 37 applications submitted, 10 registered. 1 applications for issuance submitted

＊ V/VBs must be certified by Taiwan EPA

 Approved Methodology：methodologies approved by UNFCCC CDM EB or methodologies approved by Taiwan EPA

Baseline Scenario

Emissions Reductions (Additionality)

Emissions

Ex. Renewable Energy Project

Project Scenario

Traditional Solar fossil fuel-based power plant Electricity Displaced

Baseline Scenario

Project Scenario

Reduction Credits Tracking and Account Management  Current state of reduction credits accounting: Current state of the reduction credit accounting: Prior to February, 2015, EPAT announced applications for reduction credit from 49 facilities, and approved the account opening of 25 facilities. The 24 facilities have finished account registration inspections and awaiting on the credit issuing period.  Current state of credit issuance and usage (prior to February, 2015): the EPAT has agreed to issue 43.844 million tons CO2e (as part of the early action program); offset program has not yet issued reduction credits. 7 reduction credit retirement projects have been completed, totaling 10,256 tons CO2e; 1 reduction credit transfers has been completed,Reduction totaling 2 million Creditstons CO2e. Issues Cancellations

Transfers

43,844,223million tonsCO2e issued as early reduction credits

Total reduction credits 10,256 tons CO2e。 6 cancellations from AU Optronics and 1 from UMC UMC transferred 2,000,000 tons CO2e to Dragon Steel UMC transferred early reduction credits to Dragon Steel using EIA offset commitments

Step-wise Carbon Market Linkage

Pilot Credit Trading

Credit Trading

Cap-and-Trade

Regulation: Existing GHG management rules, EIA Act

Regulation: Rules under GHG Reduction and Management Act

Regulation: Rules under GHG Reduction and Management Act

Supply: EPA Early action and offset credits Demand: EIA and carbon neutrality

Supply: Diversified credit methodologies Demand: Additional requirements (e.g., performance std.)

Supply: Allowances, offset credits Demand: Emission caps (allocation)

Platform: Match-making information

Platform: Trading among regulated entities, offset providers

Platform: Expanded trading (open to brokers, financials, etc.)

Carbon Market Elements under GHG Act

National Registry in place since 2007; trading platform for domestic credits under development National Registry in place since 2007; trading platform for domestic credits under development

Allocation

To be promulgated by central competent authority (EPA)

To be done by EPA in consultation with industry authorities, transition from free to auction/sales

Domestic offset

Int’l offset

Penalty

Credits issued by Taiwan EPA from the early action and offset project program

EPA will set the standards for recognizing international offsets, maximum of 10% of allocation.

3 times the average market price during the compliance year up to a maximum of TWD 1,500/tCO2e (approx. 22 $50/tCO2e)

National Registry in place since 2007; trading platform for domestic credits under development

National Registry in place since 2007; trading platform for domestic credits under development

Coverage

Mandatory reporting by emitters above 25,000 tons/yr threshold, with third-party verification

Registry

National Registry in place since 2007; trading platform for domestic credits under development

National Registry in place since 2007; trading platform for domestic credits under development

MRV

50% below 2005 level by 2050 (interim 5-year phase targets)

National Registry in place since 2007; trading platform for domestic credits under development

Cap

National Registry in place since 2007; trading platform for domestic credits under development

GHG Management Fund Sources:

Donations

Penalties

Distribution:

Revenue from sales and auction

Others

Governmen Transaction t budget fee

 The funds must be used exclusively in initiatives at national and local levels that reduce carbon emissions and adapt to climate change.

International Linkage & Partnership • Detailed dialogue on climate change • Consistent government engagement with partners

International Environmental Partnership (IEP)

• IEP launched on April 14 2014 • A landmark agreement on which to deliver joint U.S. and Taiwan environmental collaboration ambitions in the Asia Pacific region. • Climate change related issues covered by the IEP 25

Global Environmental Education Partnership: Climate Change Education Under the IEP project announced by the Taiwan EPA and the US EPA in April 2014 Meetings • 1st in Taipei, Taiwan, 9 countries • 2nd in Ottawa, Canada, 7 countries

Major projects • Baseline EE survey for participating countries • Climate Change Education • Citizen Science & Community Engagement (a potential highlight at the 2015 ministerial) • Explore how to replicate US-Taiwan Eco-Campus program for other countries 26

Cooperative Programs with Pacific Island Countries

One Earth, One Chance 27

Partnership for Low-carbon Technologies Development Preparedness on Climate Change Strategies

Consensus on carbon reduction on the road to Paris Partnership for Low-carbon Technologies Development

Set up and launch the partnership

•Assist third parties in funding low-carbon technologies •Promote Taiwan’s green industries

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Under the IEP project announced by the Taiwan EPA in 2014

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2015 International Conference on Carbon Reduction Strategies: Partnership for Low-carbon Technologies Development (PLCTD)  Partnership for low-carbon technologies development.  Promote economically feasible and promising low-carbon technologies and cooperation opportunities.  Several international experts from GEF, GCCSI, CCOP, Asian countries

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Conclusions Develop programs and implementation rules

under the GHG Reduction and Management Act, with inter-agency and stakeholder consultation Legal framework in place, use carbon pricing to

promote green growth and technology export Work with the international community through

partnerships to mitigate climate change and adapt to its adverse effects The earlier we start taking action, the better

chance we can reach the 2oC goal. 31

Thank you for your attention!