February 2024
Aaron Chen and Angel Li
To follow with the Kigali Amendment to the Montreal Protocol, which added HFCs to the list of controlled substances, Taiwan announced the draft Management Regulation for HFCs (hereinafter the “Regulation”) in 2023, aiming to gradually reduce the consumption of HFCs.
Phase-Down Timetable
The Regulation sets annual allocations for HFC use, gradually decreasing over time. Starting from 2024, Taiwan will prohibit HFC production, and its annual HFC consumption will be 100% below the baseline of 24,523.8642 thousand metric tons of CO2 equivalent, with a gradual decline from 2029 onwards.
Next Steps: Quota Allocation, Licensing and Reporting
According to the Regulation, companies, including those in semiconductor industry, refrigeration, air conditioning, and suppliers, must apply for yearly allocated quotas. Subsequently, quota holders are eligible to seek import and export licenses. Furthermore, selling business is generally forbidden.
Quota holders bear the quarterly reporting obligations. They must report, along with verification documents, on quantities used, import and export releases, procurement, stocks, and sales.
The Regulation is expected to take effect as early as February 2024. Violators of the Regulation may face fines, revocation of allocation qualifications, deduction of allocated quotas, or other consequences.
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