December 2022
Elva Chuang and Sally Yang
To accommodate global climate change, reduce and manage greenhouse gas emissions, and ensure sustainable development, the Taiwan Environmental Protection Administration (hereinafter, the “EPA”), which is the competent authority in Taiwan, promulgated on January 7, 2016 the “Enforcing Greenhouse Gases Accounting and Registration on the First Batch of Greenhouse Gases Emission Sources” (hereinafter, the “First Batch of Emission Sources”), which was renamed as the “Enforcing Greenhouse Gases Accounting and Registration for Greenhouse Gases Emission Sources of an Entity” on August 8, 2022, and to which the second batch of emission sources of which the inventory of greenhouse gas emissions shall be registered (hereinafter, the “Second Batch of Emission Sources”) were added, pursuant to the authorization under Article 16, Paragraph 4 of the Greenhouse Gas Reduction and Management Act.[1]
The emission sources of which the inventory of greenhouse gas emissions should be taken under current laws
The First Batch of Emission Sources includes the power generation industry, steel industry, petroleum refining industry, cement industry, semiconductor industry, thin-film transistor LCD industry, and other industries with annual greenhouse gas emissions of 2.5 million metric tons of carbon dioxide equivalent from direct emissions from the combustion of fossil fuels in all plants (sites). On August 8, 2022, the EPA added the manufacturing industries (those which meet the condition of annual greenhouse gas emissions of 2.5 million metric tons of carbon monoxide equivalent from direct emissions from the combustion of fossil fuels and indirect emissions from the use of electricity in all plants (sites)) as the Second Batch of Emission Sources. According to explanation on the EPA’s website, the Second Batch of Emission Sources consists of around 250 enterprises mainly in the electronic components manufacturing industry, and also in other manufacturing industries such as the chemical materials manufacturing industry, textile industry, base metal industry, non-metallic mineral products manufacturing industry, and other manufacturing industries.[2]
The obligations of the First Batch of Emission Sources and the Second Batch of Emission Sources
Enterprises that are the First Batch of Emission Sources and the Second Batches of Emission Sources are required to take inventory of emissions annually for registration on a designated information platform within the required period, and the list of emissions and the related materials should be verified by a verification institution every three years.[3] The First Batch of Emission Sources began to assume the annual inventory registration obligation in 2016, while the Second Batch of Emission Sources is required to complete the greenhouse gas emission registration obligation for 2022 before August 31, 2023 (inclusive).
Relevant penal provisions
If enterprises falsely register their greenhouse gas emission sources, a fine of up to NT$2 million may be imposed along with a notice to demand rectification within a stated period in accordance with Article 29 of the Greenhouse Gas Reduction and Management Act, and the differential emission equivalent that is falsely registered will be deducted when the emission quotas are reallocated. In case of failure to complete the rectification, the penalty may be imposed based on the occurrence of each violation. In case of a material violation, an order demanding the cessation, suspension, or shutdown of operation may be issued, and the transactions may be restricted or stopped.
[1] The draft Amendments to the Greenhouse Gas Reduction and Management Act proposed by the EPA in 2021 is planned to be renamed as the Climate Change Accommodation Act. The draft is currently being deliberated in the Legislative Yuan. For relevant introduction, please refer to the Firm’s article titled Taiwan plans to enact carbon pricing into Climate Change Response Act
[2] For the news release by the EPA, please visit: https://enews.epa.gov.tw/page/3b3c62c78849f32f/1cae0b25-67a4-4fd1-900d-4ff527f88645
[3] The verification institution should be an internationally recognized examination institution or its branch office set up in Taiwan and should apply to the EPA or an accreditation institution commissioned by it for certification and approval before operating verification matters.
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