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(Taiwan English News/Chang Ya-jun, Taipei) Taipei Financial Research and Development Foundation advisor and director of Tung Wah University's Center for New Economic Policy Research, Chen Song-hing, gave a speech on global carbon neutrality policies at an investment seminar held by the Chinese Industrial Investment Association yesterday (29), and pointed out that Taiwanese companies should actively transform and improve their carbon footprint operations early in order to gain an advantage in the international supply chain.

Climate change has become an urgent global challenge, and the goals of sustainable development and carbon neutrality have appeared on important policy agendas of governments and enterprises in recent years. According to Chen Songxing, carbon neutrality not only includes setting a carbon price, an ETS, a carbon tax, developing negative carbon technologies and green finance, but also moving towards carbon neutrality in the energy sector, as well as in the construction, cement, chemical, service, steel and transportation sectors.

The EU's carbon neutral blueprint takes into account both transformation and justice

The European Union will publish its European Green Agenda in 2019, which aims to achieve the goal of "leaving no one behind" by transforming the EU's economy towards sustainable development, while at the same time achieving a just transition through transformational finance.

The EU expects to raise its climate ambitions for 2030 and 2050, moving towards a zero-pollution ambition for a non-toxic environment; to protect and preserve ecosystems and biodiversity by providing clean, affordable and safe energy; to mobilize businesses to develop a clean and circular economy and a fair, healthy and environmentally friendly food system; to build and renovate buildings with high energy and resource efficiency, and to accelerate the transition to sustainable and smart mobility. The transformation to sustainable and smart mobility.

Carbon neutrality is not a slogan, it requires technology and capital to implement. The process of carbon reduction will require a variety of policy measures to mitigate and adapt, and success will depend on the tools and governance structures that are in place, as well as the technology required. The key sectors that need to be transformed will see hundreds of billions of dollars of annual investment in low-carbon electricity supply and energy efficiency by 2030. Chen also pointed out that "the public and private sectors are using green economy and green finance to guide investment and financing, and the business opportunities are promising.

Taiwan's carbon reduction and corporate response

In 2023, the EU will implement the Carbon Border Adjustment Mechanism (CBAM) to prevent a few countries from "free-riding" and enjoying the benefits of carbon reduction in other countries without reducing emissions, and to reduce trade costs. By then, high-carbon enterprises and industries, as well as developing countries will be affected. Chen Song-Hsing pointed out that Taiwan's industries should actively transform and improve their carbon footprint operations, such as the pressure of the future technological revolution in China Steel, the shipping industry will also be included in the regulations in 2060, he said, "sooner or later, we need to face", it is better to start preparing early.

Chen Song-xing said, although Taiwan President Tsai Ing-wen has followed up in April this year to shout 2050 to achieve net zero emissions, August Executive Yuan President Su Chen-chang said the goal will be included in Taiwan's temperature control law amendments. But in contrast, the European Union, the United States, Japan, Korea and other countries shouted 2050 carbon neutral target, Taiwan's current carbon reduction is relatively backward, unlike other countries to 1990 as the benchmark, but to adopt 2005 as the carbon reduction benchmark.

The European Union levied a carbon tax, the United States and Japan will also follow up, Taiwan enterprises how to respond to the carbon tax has become an important issue. Chen said, "Taiwan enterprises need to have a sound carbon footprint, including the use of internal carbon pricing, the overall supply chain carbon emissions data, the inclusion of financial cost estimates and the purchase of electricity footprint.

Multinational companies need to comply with local and national greenhouse gas regulations and establish a greenhouse gas database (ISO 14064) and energy management (ISO 50001) as early as possible. In addition, future investments need to take into account details such as low-carbon investments and renewable energy. "In the supply chain, sooner or later, downstream manufacturers will request carbon emissions information.

Green Industry and ESG Disclosure

The concept of ESG was first mentioned by the United Nations in 2004, meaning that environmental, social and corporate governance are used as indicators to evaluate business operations. Recently, international companies have also raised the ESG banner. Last year (2020), the EU introduced the EU Taxonomy for sustainable investment, and this year, the Sustainable Finance Disclosure Regulation (SFDR) was introduced to prevent corporate greenwashing.

Taiwan's FSC is also promoting green industries and ESG disclosure, hoping to expand green industries and sustainable development programs and activities by encouraging investment and financing in green industries, as well as developing sustainable bonds, funds, and insurance. The FSC is also working with the Environmental Protection Administration (EPA) to develop a sustainability classification standard for Taiwan, which is expected to be completed by the end of this year.

Source: Yajun Zhang, Taiwan English News - Reporter

Translated with www.DeepL.com/Translator (free version)