CPC Corporation, Taiwan

17-3 Special Reports Taiwan's Promotion and Development Strategies of Green Finance in Coping with the Paris Agreement

Dr. Han-Pang Su ─Director of Third Research Division, Taiwan Research

Institute Dr. Guan-Jhang Chen ─Associate Researcher of Third Research Division, Taiwan Research Institute

Global warming and hence climate change Paris Agreement, it has been altered as the

have led to the more frequent occurrence of Nationally Determined Contribution, replac-

extreme weather conditions. Countries around ing the original low-carbon sustainable strate-

the world have been relentless in taking active gies which were practiced from the bottom of

measures to respond to this problem. The society to the top. The race to transform econ-

Paris Agreement, which was passed during omies has commenced quietly when every

COP21 in 2015, has changed the previous country tried its best to achieve the target

pattern of international climate agreements. of the Paris Agreement. In the Paris Agree-

It brings the world together to cope with cli- ment, developed countries are obliged to lead

mate change in a stronger, more transpar- the rest of the world in reducing carbon emis-

ent and flexible way. It even targets the ambi- sion. Furthermore, they should reinforce their

tious goal of “holding the increase in the global support in terms of finance, technologies and

average temperature to well below 2 oC above building capacities for developing countries.

the pre-industrial levels”. Before COP21, each Therefore, one of the main challenges after

country had tendered their Intended Nation- the Paris Agreement is how to acquire the col-

ally Determined Contribution (INDC). After the lective qualified goal of USD 100 billion per

2 Special Reports

year throughout 2020. According to the Paris is a fixed income tool, which financially sup-

Agreement, Green Climate Fund will provide a ports environmental protection projects. In the new possibility while balancing between econ- first place, it is proposed by the trans-nations omy and environment. organizations, like the World Bank, European

Investment Bank and African Development

The Paris Agreement drives the global Bank. Green Bonds have been growing tre- corresponsive development of climate change mendously ever since (Figure 1). through a proper sequence and at the same time, pushes world economy towards green The value of Green Bonds plummeted finance. It makes every country in the world in 2009 due to the crisis of European Bonds. tackling climate change not only as an impact After that, Green Bonds have been growing in or an obligation but also as an opportu- value since 2011. In comparison, the growth nity to create economic values and business of general bonds is more moderate. It shows chances. Take green bonds as an example. It that the issues of climate change have gained

Exploseve growth in green bonds market 45 120

40 100 35

30 80 25 60 20

Amount issued($bn) 15 40 10 20 Cumulative amount issued ($bn) 5

0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 (Source: The Climate Bonds Initiative) Figure 1. The growth trend of the market of green bonds

3 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 global awareness. Banks around the world tinize the implementation of its domestic poli-

have also offered Green Credits. Many coun- cies on climate change and the current situa-

tries have formed a Green Financial Market, tion of economic transformation. It is advised

including the European Union, United States to look for opportunities for industrial devel-

and Australia. The foundations of green development while keeping in line with the interna-

opment finance at a global scale have been tional trend of developing green finance. By

established. practicing energy conservation and carbon

reduction, it will become the driving force

From an economic analysis, it needs an to trigger green growth and push Taiwan

additional capital outlay of about USD 40 thou- towards the transformation of green finance.

sand billions to transform the global energy Taiwan actively tendered the INDC based on

system to a low carbon one (it is expected the results of the United Nations Framework

to invest USD 318 thousand billions if based Convention on Climate Change, the domes-

on the 6 °C scenario that is developed by the tic Basic Environment Law and The Green-

model). The amount is not even 1% of the total house Gas Reduction and Management Act

global GDP from 2016 to 2050. By saving on (Figure 2), where the target is to reduce its

fuel costs, the additional capital cost, which greenhouse gas emissions by 50% from the

is nearly USD 40 thousand billions, can be business-as-usual (BAU) level by 2030. It is

offset. Furthermore, it is expected to save fuel equivalent to a further 20% reduction when

costs by USD 115 thousand billions, which is compared to the emission in 2005. In order to

three times of the additional capital cost. This reach the target of INDC, which is the commit-

is solid proof that we must invest and make ment Taiwan has made to international soci-

the global energy system move towards a low ety, it is estimated to lower the average annual

carbon system. growth of energy consumption from 2016 to

2030 from the originally predicted 1.8% to

In light of this trend, Taiwan should scru- 0.3%. At the same time, electric consumption

4 Special Reports

must be cut to 1.1%, from 2.4%. Therefore, the pivotal point in the revolution. In terms of it needs to make a great modification on the energy structure, fossil-fuel power stands at energy structure. The development of green 76% while renewable energy and hydropower technologies and green industries is certainly are at 2% each in 2014. Other than increasing

Taiwan' Paris Agreement s Greenhouse Gas Reduction and To hold the increase in the global average Management Act temperature to well below 2˚C (or 1.5˚C) To reduce its greenhouse gas emissions below 50% of the emissions in 2005 by 2050 ● Setting up the National Action Guidelines for Adapting to Climate Ch- ● To achieve a balance ange. between anthropogenic ● Establishing the action emissions by sources plan for greenhouse gas Mitigation and removals by sinks Mitigation emission control of each of greenhouse gases in department. the second half of this ● Reporting the perform- century. ance of regulation and pr- oposing the improvement plan. ● To support developing countries for the effec- tive implementation of this Agreement. ● To submit and update ● National Adaptation Po- Adaption periodically an adap- Adaption licy Framework tation communication, which may include its priorities, implementation and support needs, plans and actions.

● The assessment of im- ● Parties should enhance pact to overall economy understanding, action by greenhouse gas re- Loss and and support on a coo- Loss and duction and the corres- Damage perative and facilitative Damage ponding plans basis with respect to ● National Climate Change loss and damage. Adaption Plan

Figure 2. Taiwan's Greenhouse Gas Reduction and Management Act is in line with the Paris Agreement

5 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 Taiwan' Paris Agreement s Greenhouse Gas Reduction and To hold the increase in the global average Management Act temperature to well below 2˚C (or 1.5˚C) To reduce its greenhouse gas emissions below 50% of the emissions in 2005 by 2050 ● Carbon transaction system ● Establishing and promoting the subordinate law of the Greenhouse Gas Reduction and Ma- ● Set up Paris Committee nagement Act on Capacity Building ● Report of national green- Capacity (PCCB) to handle with Capacity house gas and the em- Building the needs of capacity Building ission data building for developing ● Registration regulations countries. of national greenhouse gas scrutiny and management of inspection organizations ● Performance report and improvement plan control ● Raising $100 billion per year by 2020. ● Setting new target for fu- ● Setting up Greenhouse Finance Finance nd raising according to Gas Managed Fund. the needs of developing countries by 2025. ● Studying related international greenhouse gas ● A technology framework law and regulations, and is hereby established attending related confer- by scientific technology ences. consulting organizations. ● Researching and pro- Technology Periodic reviews of the Technology moting the reduction tec- Transfer performance and ada- Transfer hnologies of greenhouse ption of technology de- gas emi-ssions. velopment are provided ● Promoting the concept of to set up the range and conserving energy, redu- model of assessment. cing carbon emission and green procurement.

Figure 2. Taiwan's Greenhouse Gas Reduction and Management Act is in line with the Paris Agreement

6 Special Reports

solar power, Taiwan has also advantages in out the adaption policies, and to reduce and developing wind power because we have the manage the emission of greenhouse gas. The

No. 8 highest offshore wind resource in the capital of the fund can be used in administra- world due to our geographic location. The gov- tive works like practicing reduction and adap- ernment should provide incentives and sup- tion, auction, placement and trades. It is also portive policies more enthusiastically. In terms used in items like: of the development of green industries, it is 1. General public education to follow green necessary for the government to review exist- trends and raise awareness for environ- ing policies thoroughly and propose construc- mental protection. tive policies for increasing the global competi- 2. Counsel and assistance for corporations in tiveness of local green industries. The govern- the development of reduction. ment could improve processes like fund-rais- 3. Reinforcement of certification related to ing, investment mechanism, and the encour- environmental protection, like green labels, agement of local industries to move to the environmental labels and Carbon Footprint international market. In Taiwan, legalized labels. reduction policies and economic tools have been used to integrate trans-department poli- As for the expectations in the future, we cies and practice an all-win strategy for envi- need to think about the overall policies, which ronmental, economic and national security. correspond to the international greenhouse

gas reduction. Moreover, because Taiwan is a

Like all kinds of climate funds offered one small island-country where climate change can after another in the world, Taiwan has also be very impactful, it is necessary for Taiwan to established a Greenhouse Gas Managed Fund gradually establish the domestic green finance under the planning of The Greenhouse Gas system to respond to the trend of international

Reduction and Management Act. This is to sustainable development while mitigating and respond to the global climate change, to work adapting the issues of environmental changes

7 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 at the same time. Under the guidance of the stream

policies, there are some important changes for Other than the development of supply

corporations to address: (technology), consumers will not be passive

1. Carbon pricing will bring in user charges and favor cheap products. They will slowly

The low-carbon industries have risen due increase the demand for quality and low-

to the Paris Agreement. Every country pollution products. Therefore, sustainable

has thought highly of clean energy and development will be the mainstream of low-

low-carbon technologies, as well as envi- carbon economy.

ronmental friendly products and Green

Footprint. It is inevitable to put a price on Consequently, the government has an obli-

carbon. gation to perfect the green finance system and

2. It will not be cheap for energy consumption construct a stable green investment environ-

It is highly possible for Taiwan to increase ment for attracting more capitals to the indus-

the power rate in consideration of environ- try. Corporations should practice in earnest a

mental costs. For example, the power rate more systematic overall examination of green-

has increased by nearly 50% in the last house gas emissions and review the possibil-

decade in Germany while they develop ity for more reduction. They should build up

renewable energy. the corresponding strategies in consideration

3. Renewable energy will gradually replace of both cost and developing potential. Fur-

fossil fuel thermore, corporations should actively attend

It will no longer be possible for each country related conferences or seminars about gov-

to provide long-term subsidy for fossil fuel ernmental policies and help promote accept-

industries. Renewable energy will be an able, operable and practical reduction policies.

important tool for carbon reduction in the Government has a responsibility to implement

wake of the international consensus of the the promotion and revolution of green finance,

Paris Agreement. increase more channels for green investment,

4. Sustainable development will be the main- attract private capitals to follow in green indus-

8 Special Reports

tries to help the transformation of domestic How to win in the Low-Carbon race from green industries, increase international com- the beginning? The observation of the Busi- petitiveness and construct a strong support ness and Climate Summit,” 2015. http:// and foundation for the sustainable develop- e-info.org.tw/node/111399 ment in Taiwan. 5. Chen Po, “The latest development in moni-

toring Carbon Market in EU,” World of Euro-

pean Laws, 2015. http://www.tanpaifang.

Reference com/tanguwen/2015/1118/49049.html

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average temperature in February has olution of green finance system under the

broken the century record,” 2016. green economy in China,” Newsletter from

http://money.udn.com/money/sto- the Communication Platform for Environ-

ry/5599/1562110-2%E6%9C%88%E5% mental Service Industries Across the Strait,

9D%87%E6%BA%AB%E5%8D%87%E 2015. http://www.tesd.org.tw/enp/detail.

5%B9%85-%E7%A0%B4%E7%99%BE%E php?ec=10&es=9&aid=232

5%B9%B4%E7%B4%80%E9%8C%84 7. Chinatimes, “Editorial—The Paris Agree-

2. Aimie Parpia, “Carbon markets-current ment and the development oppor-

trends and prospects,” Bloomberg New tunities for green industries,” 2015

Energy Finance, 2010. http://www.chinatimes.com/newspa-

3. Bureau of Energy from Ministry of Eco- pers/20151227000019-260202

nomic Affairs, “After the Kyoto Protocol— 8. Climate Bonds Initiative, “Explosive growth

The overall corresponding strategies of in green bonds market,” 2014. https://www.

carbon dioxide reduction in Taiwan,” Cover climatebonds.net/market/history

Story 2—Energy Report, 2005. 9. Climate Bonds Initiative, “Green Bonds

http://energymonthly.tier.org.tw/outdatecon- Market 2016,” 2015. https://www.climate-

tent.asp?ReportIssue=200507&Page=8 bonds.net/

4. Chang Kai Ping, “【COP21xCorporations】 10. Climate Bonds Initiative, “How to grow

9 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 green bonds in China,” 2016. https://www. qué for the first time,” First Financial Daily,

climatebonds.net/resources/publications/ 2016. http://www.ep2016.com/edcontent_

china-report d.php?lang=tw&tb=6&cid=17&id=189

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RELEASE: New Global Green Bank duction of the global carbon market—A

Network,” 2015. http://www.cgctalk. new trading market developed to cope with

com/2015/12/press-release-new-global- the Kyoto Protocol,” Edition 1581, Interna-

green-bank.html tional Economic Situation Biweekly News-

12. John McGarrity, Charlotte Middlehurst, letter, 2005.

“UK’s finance sector aims to bolster green 17. World Bank, “2014 Joint Report on Multilat-

lending,” 2016. https://www.chinadialogue. eral Development Banks’ Climate Finance,”

net/article/show/single/ch/8548-UK-s- 2015. http://www.worldbank.org/content/

finance-sector-aims-to-bolster-green-lend- dam/Worldbank/document/Climate/mdb-cli-

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Key to Climate Success,” 2016. http:// by the Paris Agreement,” 2015. http://

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green-finance-key-to-climate.html html

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cial System,” 2015. http://unepinquiry.org/ under the green economy in China”, Cheng

publication/establishing-chinas-green- Fu Lin and Wen Lih Chyi, Newsletter from

financial-system/ the Communication Platform for Environ-

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through financial policy,” 2014. https://www. 2015.

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cial-policy.pdf php?ec=10&es=9&aid=232

15. Wang Lin, “Green finance in G20 Communi-

10 17-3 Sustainable Industries in Taiwan Energy Conservation and Carbon Re- duction Case Studies: CPC Corporation, Taiwan

Mr. Yang Lin ─ Chief of Environmental Protection Department, CPC Mr. Kun-wei Lee ─ Engineer of Environmental Protection Department, CPC

Introduction reduction policies set by the government, and

Taiwanese government has entered into has been continually implementing voluntary

force The Greenhouse Gas Reduction and reduction measures within the company.

Management Act to respond to climate change After making long term endeavors, CPC's

by July 1, 2015, and to commit the greenhouse greenhouse gas emission has been reduced by

gas emissions will be at least 50% reduction 20% since 2005. In this article, we will briefly

by 2050 (compared with 2005 emissions level). introduce some examples of our success and

It is a challenge that can only be achieved with share our experience in energy conservation

great efforts. and carbon reduction efforts. This article aims

to encourage every company to practice the

As one of the largest national business concept of energy conservation and carbon

members in Taiwan, the CPC Corporation, reduction, as well as to continue working on

Taiwan (referred to as CPC) has actively sustainable development to establish a low-

complied with the greenhouse gas (GHG) carbon society.

12 Sustainable Industries in Taiwan

Case studies carbon emission reduction, reduced equipment

Case 1: Improvement of production equip- clogging and reduced maintenance costs.

ment

—Improvement in energy con-

servation for the production of

1,3-Butadiene

The heat exchangers in 1,3-Butadiene factory in CPC's Kaohsiung Refinery had fine performances originally. However, the end- product sides of the heat exchangers were (Source: CPC) gradually fouled up so that both the pressure Figure 1. Crystals of 1,3-Butadiene poly- and temperature of the heated steam increased merized under high temperature. The crystals look like popcorn. accordingly. It resulted in the polymerization of

1,3-Butadiene (Figure 1) and the pipelines were Case 2: Energy and resources sharing clogged eventually. In the end, the furnaces had —Integration of energy and to cease operations abruptly and the production resources in the industrial park lines were affected. Two plants within CPC, namely Dalin

Refinery Plant and Linyuan Petrochemical

After detailed assessment and experiments Plant, have the highest priority to expand the with different methods, the CPC decided to scale of energy and resource integration due introduce the low pressure steam heating to their high energy consumption and great system in the Fifth Naphtha Cracking Plant. waste production. After scrutinizing and sharing

This way, the medium pressure steam usage information offered from other industries in the can be conserved and the low pressure steam industrial park, companies are able to evaluate discharged be reduced as well. The benefits of and decide on the suppliers and receivers for adopting this approach include 12,000 tonnes of the energy and resource integration scheme.

13 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 Take the integration of steam energy as an to collaborate with other companies in the

example. China Steel Corporation consumes integration of energy and resources.

high amounts of electricity but has low heat

energy demands due to the nature of the steel Case 3: Energy and resources sharing

industry. Thus, there is still a large amount — Reuse of cold discharged water

of steam discharged from the cooling tower in the natural gas plant

of the steel mill after cogeneration. If the CPC's Yong'an Liquefied Natural Gas Plant

steam is channelled to CPC's Dalin Refinery, is currently using the Open Rack Vaporizer

it can not only increase the refinery's energy (ORV) as the heat exchanger (Figure 2).

efficiency, but also reduce its usage of fossil Within the ORV, sea water is introduced and

fuel to generate steam. This approach can lead sprayed on the pipes contained LNG to heat

to energy conservation and carbon reduction the LNG at -162 oC in order to vaporize the

benefits. In this case, the accumulated amount liquefied natural gas. After the heat exchange,

of carbon reduction reached 285 thousand the discharged cold water (sea water) regains

tonnes in 2013. Based on this successful case, room temperature after going through open

CPC will continue to search for the opportunities channels. The average temperature of the

Natural Gas

ORV Upper Tank Sea Water Input

Chlorinated Sea Water ORV Panel To Wipe Out Algae and Bacteria Liqueﬁed Natural Gas Sea Water Output ORV Bottom Tank (Source: CPC)

Figure 2. Sea water is introduced into the ORV heat exchanger.

14 Sustainable Industries in Taiwan

discharged water is around 16-24 oC (Figure Case 4: Renewable energy

3). The discharged cold water is then filtered — Solar energy gas stations and sterilized while maintaining a stable In order to promote the governmental temperature. This water condition is perfect for policy of “Million Solar Roofs,” CPC's Green using in high-value fish farming, so much that Technology Research Institute has continuously the discharged cold water has earned its name assisted gas stations that CPC owned in setting as “diamond water”. up photovoltaic power system platforms and

install differently types of photovoltaic systems

(Figures 4 and 5). The characteristics of

different installed systems are also studied at

the same time. So far, six CPC's solar power

gas stations have been established (Table 1),

with a total photovoltaic generated electricity

(courtesy of Mr.Jiang-Rung Tu) equivalent to an annual reduction of 81.8 tonnes

Figure 3. The discharged cold water from of carbon dioxide emissions. Yong'an Liquefied Natural Gas Plant is channeled to the ﬁsh farms

As for the benefit on carbon reduction, if the discharged water is used to supply 7.5 square kilometers of fish farms, it will save the farms

20 thousand dollars per square kilometer in electricity bills per year. This is equivalent to conserving 9,090 kWh per square kilometer of (Source: CPC) electricity per year. Consequently, 6.8 million Figure 4. Solar panels installed at the kWh of electricity is saved every year, which is CPC's gas stations. equivalent to a reduction of carbon emissions by 4,230 tonnes every year.

15 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 energy CPC had conserved is equivalent to 720

thousand liters of oil or a reduction in carbon

dioxide emissions by 2.15 million tonnes. In

addition, CPC has started the overall review of

its greenhouse gas emissions since 2004 and

has encouraged the verification of the GHG (Source: CPC) emission amounts. CPC's greenhouse gas Figure 5. Solar systems at the gas station emission in 2005 was 11.5 million tonnes CO2e in Kenting.

which dropped to 9.2 million tonnes CO2e in Continuous improvement 2014. The amount of carbon emission reduction as the pioneer in carbon during this period is 2.3 million tonnes (20%). The percentage of national GHG emissions reduction contributed by CPC also dropped from 4.2% in

Between 2005 and 2014, the amount of 2005 to 3.4% in 2012.

Table 1. Six CPC's gas stations with installed solar systems Kenting Linluo Shetou Ershui Makuang Nanhuan Station Station Station Station Station Rd Station Date of May 2011 Oct 2011 Jul 2012 Nov 2012 Dec 2012 Dec 2012 Commencement Location Pingtung Pingtung Changhua Changhua Yunlin Yunlin Cost of Installation ( in 5,400 2,600 3,240 2,950 3,890 3,290 thousands NT$) Accumulated Generated 102,930 43,940 78,700 50,130 102,890 50,080 Electricity (kWh) Accumulated Carbon Reduction 54.8 23.4 41.9 26.7 54.7 26.7 (tonne) Average Annual Carbon Reduction 14.0 6.7 15.2 11.0 23.5 11.4 (tonne/year) Source: CPC (data in March 2015)

16 Sustainable Industries in Taiwan

In 2014, other than controlling the per- climate change, namely the requirements formance indicators of all energy consuming mandated by the "Greenhouse Gas Reduction equipment in the main production factories and and Management Act," the impact of climate promoting annual energy conservation projects, change and the growing demand in the low

CPC also established the energy efficiency carbon energy market. CPC has actively benchmark indicators for plants like the newly- encouraged the reduction of greenhouse gases built Resid Fluid Catalytic Cracking Plant, following the adoption of the Kyoto Protocol.

Alkylating Plant and the New Third Naphtha Other than complying with the requirements of

Cracking Plant. Performance review meetings the "United Nations Framework Convention on for energy conservation have been convened Climate Change" and the domestic regulations regularly to effectively monitor the results and in Taiwan, CPC will continue to strive for also shared the performance and successful greater carbon reductions through efforts to stories of energy conservation projects with increase energy efficiency, reduce energy other plants within CPC. As for other energy consumption, increase usage of low carbon conservation measures, CPC offices had saved energy and implement afforestation projects.

71.9 million New Taiwan dollars in energy costs In addition, CPC will coordinate these efforts in 2014 compared to 2011. Between 2008 with government policies and promote energy and 2014, CPC had planted over 1.4 square conservation and carbon reduction projects kilometers of trees. The equivalent carbon nationwide. Through these actions, CPC is emission reduced by these trees is about 9.7 actively striving to fulfill its social duty and times that of the Taipei Daan Forest Park, which dedicate itself in developing sustainability for is 3,589 tonnes every year. the company and the environment.

Conclusions References

There are three likely scenarios CPC wo- 1. Bureau of Energy, Ministry of Economic uld have faced under the increasing global Affairs, “Wastes remain as resources–

17 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 the domestic and overseas successful 5. Industrial Development Bureau, Minis-

stories of regional integration of energy and try of Economic Affairs, “The new trend of

resources”, Energy Monthly, p.19-23, July pollution prevention in the integration of

2012. energy and resources,” Sustainable Indus-

2. CPC Corporation, Taiwan, “The Collec trial Development Quarterly, 67(2), p.40-47,

tion of Cases of Energy Conservation and 2014.

Carbon Reduction,” 1st edition, Taipei, 2014. 6. Kaohsiung City Branch of Chinese Institute

3. CPC Corporation, Taiwan, “The 2015 Sus- of Engineers, “Improvement in energy con-

tainable Report,” 1st edition, Taipei, 2015. servation of the production of 1,3-Butadi-

4. CPC Corporation, Taiwan, “The Blue ene Factory,” Journal of Chinese Institute of

Diamond Water and Yong’an District,” 1st Engineers–Kaohsiung Edition. 20(2), p.19-

edition, Taipei, 2015. 24, 2002.

18 17-3 Current Affairs Engage in Carbon Reduction and Build a Better Future Together

The Industrial Development Bureau (IDB) impetus to the global competition for carbon

of the Ministry of Economic Affairs has been reduction. In order to keep up with this interna-

assisting industries to reduce carbon emission tional action, Taiwan had announced its plan to

since 2006. The total amount of carbon reduc- implement the Greenhouse Gas Reduction and

tion has been over 11 million tons for the last Management Act in 2015. Other than setting a

ten years. It is more than the carbon emission clear emission reduction target of 50% of the

caused by the entire power consumption (20.3 2005 level by 2050, Taiwan will try to, by 2030,

billion kWh) in New Taipei City in 2014. Today, reduce the level of Greenhouse gas emission

for every NT dollar earned by a manufacturer, to 20% which is lower than the 2005 level. The

the carbon emission is 45% lower than that of decision has pushed the schedule of carbon

ten years ago. It proves that the industrial tran- reduction forward and imposed much pressure

sition to low-carbon industries is a success. In on private corporations.

the future, the IDB will continue to work with

corporations and complete the target of carbon In order to help corporations manage the

reduction. implementation of carbon reduction in alignment

to domestic and international requirements, the

In 2015, the Paris Agreement had set the IDB has assisted corporations through counsel-

target of maintaining the increase in the global ling and capacity building since 2006, includ-

average temperature to well below 2 oC above ing encouraging self-directed reduction strat-

pre-industrial levels. They even tried to push the egies for high-energy consumption industries,

target further to below 1.5 oC. This has given providing technical assistance to manufactur-

20 Current Affairs

ing by setting up an energy conservation and in 2016 and consequently, seventeen meet- carbon reduction service group, encourag- ings had been convened for discussion so far. ing integration of energy and resources within During the meetings, the measures, potentials, industrial parks, assisting in building up energy obstacles and packages for carbon reduc- management system, promoting green fac- tion for all industries were discussed to under- tory label, among others. For example, there stand the needs from corporations in solving had been 7,776 reduction measures for highly the problems and reaching the target of green- energy consumption industries between 2006 house gas reduction. and 2015. Corporations had invested NT 42.1 billion dollars for the reduction efforts and the In the future, the IDB has planned to lead total greenhouse gas reduction was by 10.22 corporations to utilize clean energy and trans- million tons CO2. Through collaboration and form them into low carbon industries through involvement of private companies, the manu- counselling and assistance measures, like facturing industries have lowered by 45% the introducing smart energy management and carbon emission for every dollar earned in the communication technology, adopting high effi- last ten years. In 2004, only twenty dollars of ciency energy conservation products and low profit was yielded if it released 1 kilogram of carbon technologies, speeding up the improve-

CO2, while the profit increased to 38 dollars in ment of production processes, and promot-

2014. The production power has increased 1.8 ing low carbon fuel substitutes. The IDB and times. industries will continue to face and accept the

challenge of global green competition.

Energy conservation and carbon reduction have become a common value nowadays. The (Source: The Industrial Development Bureau

IDB understands that carbon reduction works of Ministry of Economic Affairs, 2016-07-26, have become a bottleneck for most indus- http://www.moeaidb.gov.tw) tries. In view of this, the IDB has invited corporations to establish seven working groups

21 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 Double Benefits for Industries when Upgrading Energy Conservation and Car- bon Reduction

In order to promote energy conservation Other than promoting technical educa-

and carbon reduction for industries, the Indus- tion, the IDB has continuously established

trial Development Bureau (IDB) of the Minis- the methodology for emission reduction of

try of Economic Affairs has been running the domestic needs. There have been 14 methods

service group to assist in improvement mea- reviewed, passed and announced by the Envi-

sures like energy diagnosis for manufacturing ronmental Protection Administration, Executive

equipment and systems, potential assessment Yuan. The IDB has also assisted corporations

for energy conservation and carbon reduc- to engage in greenhouse gas offsetting works.

tion, efficiency improvement of operating sys- They have tried to convert the performance

tems, replacement of equipment, recycling of of energy conservation and carbon reduction

heat and looking for substitute fuels. Under the effort of companies into certified carbon cred-

active promotion by the IDB, there have been its so that they can be used for trading or off-

more than 2,800 factories seeking consultation setting in the future.

between 2009 and 2015. Over 9,500 improve-

ment measures have been provided and the Information and Communication Technol-

energy conserved is equivalent to 533 kiloli- ogy (ICT) has been growing rapidly over the

ters of oil per year. As a result, power saving last few years. In order to meet the require-

of 1.27 billion kWh, reduction in energy cost by ment of obtaining real-time power consump-

NT 8.55 billion dollars or carbon reduction by tion information and pursue the rationality of

1.64 million tons of CO2e have been realized. energy usage, the service group had incor-

22 Current Affairs

porated ICT in 2015 to increase the efficiency 605 tons of CO2e reduction, and the electric of energy conservation and management for bill saved is up to NTD 6.5 million. industries. Through the analysis of factorial energy information and the physical inspec- According to the IDB, many successful tion by experts, the main energy consumption stories from the service group have shown that equipment can be located. At the same time, the manufacturing industry has moved toward digital electric meters, cloud technology and smart management in production and energy data analysis tools are introduced to establish management. They have realized break- the smart monitoring system for energy con- through development in the results of energy servation. In this way, smart energy conser- conservation and carbon reduction. They have vation solutions can be customized. Take the not only reduced energy consumption and case of a manufacturer for bicycle frame as cost, but also shortened the distance between an example, by installing digital electric meters clients and created value in green industries. and a power information monitor system, the The IDB hopes that more factories can follow usage of energy can be recorded in real time. to contribute to sustainability in Taiwan and

Furthermore, the optimum energy conserva- keep in line with the global trend of carbon tion for the operations of the entire factory reduction. can be achieved by improving the energy consumption of its production equipment, conserv- (Source: The Industrial Bureau of Ministry of ing energy in the cold-water system during the Economic Affairs, 2016-08-29, http://www. process, increasing efficiency of the air pump moeaidb.gov.tw) system and reducing the leakage of com- pressed air. It is an effectively economic way to implement energy conservation and carbon reduction. By doing so, the electricity reduced is 347 thousand kWh, which is equivalent to

23 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 2016 Renewable Energy Week to Showc- ase the Strength of Taiwan's Green Energy Industry

Guided by its vision of 20% renewable will be held concurrently, to look at such key

energy generation by 2025 and a nuclear issues as Green Energy System Asset Man-

energy free homeland, the Ministry of Eco- agement, and Green Energy System Integra-

nomic Affairs (MOEA) actively promotes the tion Services. Domestic green energy experts

development of renewable energy in Taiwan. such as Tiantai Energy Corp. General Man-

To this end, the ministry holds the 2016 ager Kunhong Chen, AU Optronics Counsel

Renewable Energy Week in order to grasp Lixun Xu, Datong Corp. Senior Manager Son-

trends and developments in the green energy ghui Zhuang, and Delta Electronics General

industry. From 25-27 August, the International Manager Yuming Zhang have been invited as

Investment Conference on Wind Power Gener- speakers, along with other industry and aca-

ation and the Green Energy Exhibition will be demic experts and benchmark enterprises, to

held at the Taipei World Trade Center Hall 3 to share and analyze future development trends.

provide a technical exchange platform for the The Wind Power International Investment

domestic and foreign green energy industry, to Conference will comprise an investment con-

promote international cooperation opportuni- ference and specialized presentations, a forum

ties, and develop Taiwan’s renewable energy clarifying Taiwan’s wind power generation pro-

industry market. motional policies and objectives, highlight-

ing Taiwan’s advantageous wind resources in

During the exhibition, a Green Energy order to attract more international enterprises

Industry Development and Exchange Forum to enter our wind power market.

24 Current Affairs

The Green Energy Exhibition is the high- try Showcase Area provides a platform for light of the Renewable Energy Week, where domestic green energy exporters to showcase

Denmark, France, Germany, the Netherlands, their product and identify business opportuni- and Britain will host national pavilions. Taiwan ties with foreign partners. More than 70 green will be represented with a Bureau of Energy energy companies will participate with about

Theme Pavilion and a Green Energy Indus- 100 booths covering renewable energy, energy try Showcase Area. The Bureau of Energy conservation, energy storage, system integra-

Theme Pavilion will demonstrate the achieve- tion and other related industries, reflecting the ments of the Bureau of Energy in promot- strength of Taiwan's green energy industry. ing renewable energy and display R&D technical exhibits, highlighting Taiwan’s power in (Source: Bureau of Energy, Ministry of Eco- green energy R&D for specialists and the gen- nomic Affairs) eral public as well. The Green Energy Indus-

25 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 Promoting Green Finance to Support Gr- een Energy Industry Development

In line with the government's policy of green energy industry.

pursuing ecologically sustainable develop-

ment and the development of a green energy Promoting the development of the green

technology industry (green energy industry) energy industry is an important policy for the

in response to climate change, the Financial government. Therefore the FSC will continue

Supervisory Commission (FSC) has adopted to work with the National Development and

green finance as one of its most important pol- Reform Commission, Ministry of Economic

icies to encourage domestic investment in the Affairs, Environmental Protection Agency and

The green ﬁnance measures currently being promoted by the FSC are as follows: Policies Policy speciﬁc measures

1.Green finance has been incorporated into the FSC's policies and has adopted by the Taiwan Bankers Association (TBA) as its Project to Encourage Banks to Invest in Innovative Key Industries, under the prerequisite of risk control, by rewarding banks for lending to innovative key industries (Including green energy technology) to provide financing services. Also, credit guarantee loans to small and medium enterprises have To help the gre- increased by 80-90%. en energy ind- 2.TBA has incorporated the Equator Principles into its bank credit guidelines, ustry obtain fi- to stimulate ﬁnancial institution to include social and natural environmental nancing impacts in their ﬁnancing assessments and policy decisions. 3.Encourage financial institutions to actively cooperate with policy-related loans for the energy conservation and carbon reduction industries, such as the National Development Fund, Executive Yuan; the Environmental Protection Administration, Executive Yuan; and the Council of Agriculture, Executive Yuan.

26 Current Affairs

Policies Policy speciﬁc measures 1.The Regulations Governing Use of Insurer's funds in Special Projects, Public Guide the ins- Utilities and Social Welfare Enterprises, under the Insurance Act, provide urance indu- that the insurance industry funds can be invested in such projects as power stry funds to generation and other utilities. invest in public 2.In order to encourage the insurance industry to invest public utilities such construction, as electricity, the Legislative Yuan has passed the first reading of an including the amendment to Paragraph 5 of Article 146 of the Insurance Act, which if green energy passed, will provide that in the future insurance enterprises can occupy up industry to one-third of the board of directors of an invested company, which will help guide insurance industry funds into the green energy industry.

1.There already exists a multi-level capital market comprising listings, over- the-counter (OTC), Go Incubation Board for Startup and Acceleration Firms (GISA), and equity fundraising to provide diversified financing channels for enterprises of different sizes. GISA provides financing and free-of-charge mentoring to innovative micro-enterprises. Provide diver- 2.A science and technology enterprise (including a green energy enterprise), sified financing if it obtains the favorable opinion from the competent authorities that its and access to products or technology has market potential, it can apply for a stock market capital chan- listing while the restrictions regarding years of establishment and profitability nels are lifted. 3.To promote green financial products such as green bonds, investment trusts focusing on investment in green industry stocks, and creating green stock / bond indices, these products and services are made available to the public to participate in green energy development.

We will continue to develop relevant programs through financial institutions To strengthen such as the Taiwan Academy of Banking and Finance Institute to cultivate the training of Green Finance professionals, assist the ﬁnancial industry to obtain information, Green Finance understand the green energy industry characteristics, assess risk control and professionals audit mechanisms, grow their willingness to invest green, and contribute to the development of green ﬁnancial products. other ministries to actively promote Green a triple-win vision for green industry, green

Finance on the levels of financing, investment, finance and society’s sustainability. financing channels, and personnel training, in order to support the development of the green (Source: Financial Supervisory Commission, energy industry, and use the green economy website) to drive Green Finance development, to attain

27 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 Climate Diplomacy and Low Carbon De- velopment Forum The Paris Agreement: Observation and Response Strategies

The United Nations Framework Conven- draw international attention to its greenhouse

tion on Climate Change (UNFCCC) reached gas emissions measures.

a consensus on climate change and carbon

reduction at the Paris Summit (COP 21) in In order to strengthen the understanding of

2015 and adopted the Paris Agreement under global climate change and low carbon devel-

the testimony of 196 countries, setting the opment, and enhance its understanding of the

goal a global average temperature increase of United Nations Framework Convention on Cli-

no more than 2 oC when compared with pre- mate Change, Taiwan’s Ministry of Foreign

industrial revolution levels, and continue to Affairs commissioned the Taiwan Institute for

exert efforts to limit the temperature rise to Sustainable Energy (TAISE) and the Center for

1.5oC.April 22, 2016, the United Nations head- Corporate Sustainability (CCS) to jointly orga-

quarters in New York announced the begin- nize the Climate Diplomacy and Low Carbon

ning of the ratification window until April 21, Development Forum on August 18-19, 2016, to

2017. If 55 Signatory Parties representing 55% cultivate talent for participation in international

of global greenhouse gas emissions ratify the climate diplomacy.

Agreement, the Agreement will enter into force

within 30 days. Even when not a member of The forum will invite participants from cen-

the United Nations, Taiwan is no less con- tral government ministries, local government

cerned about the degree of climate change. officials, NGO experts and scholars, and rep-

Thus, in 2015, Taiwan committed to a Nation- resentatives from industry to attend. Eight

ally Determined Contribution (NDC), hoping to workshops and two forums will be planned.

28 Current Affairs

This forum will help participants to learn the pated in international environmental conven- latest developments since the 22nd Con- tions, channels of communication and collabo- ference of the UNFCC Parties (COP22) in ration with organizations around the UNFCCC,

Morocco. The forum will cover developments Taiwan’s legal and low carbon strategy devel- and trends in climate diplomacy, Taiwan’s par- opment in response to the Paris Agree- ticipation in the international organizations, ment, sharing of real cases of participation in the history of the Climate Change Framework UNFCCC meetings, and experience sharing of

Convention and relevant agreements, low NGOs participating in the UNFCCC process. carbon responses under the Climate Change

Framework Convention, experience sharing of (Sources: Ministry of Foreign Affairs; Taiwan government representatives that have partici- Institute for Sustainable Energy (TAISE))

29 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3 The Environmental Protection Admini- stration Announces Draft Operating Gui- delines on the Stage-Specific Control Objectives and Control Modes of Green- house Gases

Taiwan has proposed a Nationally Deter- the procedural norms for the formulation of

mined Contribution (NDC), by which green- stage-specific goals and control methods, and

house gas emissions must be reduced by 50% to formulate draft Operating Guidelines on the

by 2030 under BAU (business as usual) cir- Stage-Specific Control Objectives and Control

cumstances, which is 20% below 2005 emis- Modes of Greenhouse Gases as the basis for

sion levels. Greenhouse gas reduction has formulating sage-specific objectives.

become the common goal of government and

industry. In order to set stage-specific tar- The draft guidelines contain 13 articles,

gets for greenhouse gases, and to achieve the with the following gist:

total amounts of stage-specific greenhouse 1.The timeline and considerations for the

gas emission reductions every five years, stage-specific objectives.

the Environmental Protection Administration, 2.Content and references for national and sec-

Executive Yuan, in accordance with the pro- toral stage-specific objectives.

visions of the "Greenhouse Gases Reduc- 3.Basis for setting stage-specific objectives for

tion and Management Act," and in collabora- greenhouse gas emission control per indus-

tion with the central competent authorities for try under the Greenhouse Gas Emissions

the affected industries, invited scholar, experts Control Program of Action.

and public groups, established a Greenhouse 4.Indicators for inclusion in greenhouse gas

Gases Stage-Specific Reduction Goals Advi- emission reduction programs and green-

sory Committee in March 24, 2016, to discuss house gas emissions control initiatives in

30 Current Affairs

various industries 8.Review the implementation and achievement

5.Provisions of the Program. of the stage-specific objectives.

6.Procedure for formulating stage-specific 9.Adjustment mechanisms for the stage-spe-

objectives. cific objectives.

7.Public hearings procedures and information

disclosure methods for the stage-specific (Source: Environmental Protection Administra-

objectives. tion, Executive Yuan)

31 The Development Trend of the Paris Agreement and the Corresponding Strategies for Industries 17-3