What is a carbon credit exchange? Will it be like stocks, open to everyone? As an individual, can I purchase carbon credits through a carbon credit exchange and claim carbon neutrality?
I. What are the transactions on the Taiwan Carbon Credit Exchange?
You may have heard of carbon trading markets abroad. However, there are two types of objects in foreign carbon trading: one is carbon emission quota (Allowance); the other is carbon offset credit (Carbon Offset Credit).
Total quantity control has not yet been implemented in China. Therefore, the "Carbon Rights Exchange" established on August 7 will be limited to voluntary reduction transactions, that is, carbon offset quotas.
With the trading platform, it is easier for everyone to understand the supply and demand of carbon rights and there will be more choices.
II. Can the trees I plant at home be exchanged for carbon credits?
How many carbon credits can I earn by purchasing an electric car and planting trees? Can I also earn carbon credits by planting trees at home?
Carbon credits are certified based on strict standards and scientific evidence. Domestically, obtaining carbon credits requires the use of methodologies approved by the Environmental Protection Administration (EPA) and aligned with international standards. These include requirements for measurability, reportability, and verifiability (MRV), as well as additiveness, conservatism, permanence, avoidance of harm, and avoidance of double counting. Only after verification by the EPA and third-party verification agencies can carbon credits be obtained.
III. What are the business items of the carbon rights exchange?
my country's carbon rights exchange has three major business projects:
(1.)Domestic carbon trading
(2.) International carbon trading
(3.)Carbon consulting and education
In the initial stage, carbon consulting and education training will take precedence. The most anticipated domestic and international carbon trading will not be carried out until the relevant sub-laws and policies of the Climate Change Response Act are finalized.
IV. The Possibility and Impossibility of Carbon Trading in Taiwan
Before purchasing carbon credits, you must first determine your intended use. Many organizations have restrictions on the carbon credits they recognize. Some foreign organizations do not accept carbon credits issued by non-governmental organizations, and certain domestic situations do not accept foreign carbon credits. Therefore, it is important to clearly understand your intended use before purchasing. The following are a few common reasons:
- Environmental Impact Assessment (EIA) review requirements: Yes.
Some newly developed industrial zones or science parks undergo an EIA (Environmental Impact Assessment) review (EIA) before establishment. To reduce environmental impact, Taiwan's Climate Change Response Act requires developers to implement carbon offsets. Developers can purchase carbon credits or adopt EIA-approved offset measures (such as replacing old cars and motorcycles with electric vehicles).
It must be noted that the source of carbon rights offset by environmental impact assessment must come from domestic carbon reduction quotas.
- Offsetting the upcoming domestic carbon fee: Not yet determined.
Taiwan's climate law allows for "carbon credits to offset carbon fees," but detailed regulations will have to wait until the carbon fee sub-law is released.
However, market price factors must also be taken into consideration. If the carbon fee is cheaper than purchasing carbon rights, people may not be willing to buy carbon rights to offset the carbon fee.
(It should be noted that carbon reduction achievements cannot be double-counted. For example, if a company reduces its carbon fee due to carbon reduction, it cannot apply for carbon rights again.)
- European Carbon Border Adjustment Mechanism (CBAM): No.
If the EU regulates the carbon content of imported products and the carbon content exceeds EU standards, importers must purchase CBAM certificates. Alternatively, if importers have already paid a carbon price in a non-EU country, they must also pay CBAM based on the difference in the EU carbon price. According to EU regulations, CBAM does not accept credits issued by international non-governmental organizations as carbon credits. In other words, domestic carbon credit exchanges currently operate solely on a voluntary reduction market, and purchased carbon credits cannot be used to offset CBAM.
However, it has been confirmed that the "carbon fee" that Taiwan is about to levy can be offset against CBAM.
- Corporate carbon neutrality declarations: Yes.
There are currently no clear government regulations or governing bodies for companies to issue carbon neutrality declarations, and acceptable carbon credits are determined by the companies themselves.
However, there are many sources of foreign carbon offsets, some of which have already sparked controversy. Purchasing flawed carbon offsets could damage a company's reputation, a fact that must be carefully considered. Carbon credits from carbon exchanges, for example, are relatively secure because they are certified by the Environmental Protection Agency.
- Supply chain requirements or international carbon reduction commitments: Not necessarily.
Currently, there are no clear regulations for companies regarding their supply chains or international carbon reduction commitments regarding carbon neutrality declarations. Acceptable carbon credit categories are also determined by the companies themselves.
Ⅴ. Can individuals or groups purchase carbon rights to declare carbon neutrality?
Before declaring carbon neutrality, one must first know how much carbon they use (carbon inventory) and then purchase enough carbon credits to offset it. Individuals currently cannot use carbon inventory, so it's difficult to declare carbon neutrality without knowing how much carbon they emit.
The most important thing to do when reducing carbon emissions is to start with yourself. Only when consumption cannot be reduced should carbon credits be used to offset it. If carbon neutrality is declared solely by purchasing carbon credits, the meaning of carbon neutrality will be lost.
Source: Environmental Information Center (https://e-info.org.tw/node/237345)
