A project of Greenhouse Gas reduction deliberations and industrial impact assessment 

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Abstract:

This Plan includes five main work items; the implementation results achieved for each work item are summarized below. In the first work item, a comparison was undertaken of the review mechanisms used for emissions reduction projects in Taiwan and overseas, and recommendations for improvement were put forward with regard to frequently-seen problems affecting the review processes for emissions reduction projects and emissions reduction methods in Taiwan; in addition, follow-up was performed with respect to the transformation strategies for the U.N. Clean Development Mechanism (CDM) in the post-Kyoto Protocol era, to provide a reference for the refinement and revision of the emissions reduction project system in the future. In this year's Plan, project review operations were performed with respect to a total of 23 sites, including 11 project registration applications, 3 quota application, and 25 instances of review of new reduction methods; in addition, 3 emissions reduction achievements verification review meetings were held. With regard to the strengthening of supplementary tools for emissions reduction projects, this year information was collated regarding the CDM's suggested methods and tools for streamlining the procedures applying to small-scale emissions reduction projects, and some suggestions were put forward. The results achieved included demonstrating the potential for referencing the CDM's suggested methods for streamlining small-scale emissions reduction project procedures, and the formulation of a "Positive List of Automatic Additionality Tools." Regarding review of renewable energy offset projects, the main work undertaken here was the collation of renewable energy wholesale purchase price cost data to clarify the wholesale purchase price setting design parameters for the period FY2011 - FY2018, so as to provide a reference for the review of renewable energy setoff projects in Taiwan. With regard to the use of emissions reduction project investment analysis to support project review work, this year assistance was provided on investment analysis work for 40 setoff projects, with the small-scale project methodology being adopted for 34 projects, and the large-scale project methodology being adopted for 6 projects. In the second work item, the first priority was to implement follow-up and data updating with respect to supply and demand in relation to Taiwan's emissions reduction volumes. On the supply side, the amount of emissions reduction deriving from early-action projects was approximately 69,180,000 tons of CO2 equivalent (CO2e), while the amount of emissions reduction deriving from offset projects was approximately 44,240,000 tons of CO2e. The average acquisition cost per unit of reduction for early-action projects ranged from NT$1.1 - 2.8 per ton (in the LCD display manufacturing industry) to NT$23.2 - 58.0 per ton (in the electric power sector). On the basis of the currently available financial data for offset projects, which covers 20 offset projects, the average acquisition cost per unit reduction for offset projects ranged from NT$62.7 per ton to NT$36,348.8 per ton, averaging NT$2,262.3 per ton. On the demand side, it was estimated that the main source of latent demand lay in emission reduction commitments made during the environmental impact assessment process. For 2020, the maximum estimate of latent demand was 29,719,000 tons of CO2e; For 2025, the maximum estimate of latent demand was 250,662,000 tons of CO2e; As regards emissions volume management and follow-up, as of the end of April 2018 review had been performed for 4 carbon credit account opening applications, 3 account change applications, 2 credit cancellation applications, and 1 credit transfer application, giving a total of 10 applications. The total amount of credits issued came to 69,200,000 tons of CO2e. With regard to credit cancellation, to date there have been a cumulative total of 26 instances of carbon credit cancellation in Taiwan, with the canceled credits totaling 478,457 tons of CO2e. There have been a cumulative total of 13 instances of carbon credit transfer, with the transferred credits totaling approximately 13,300,000 tons of CO2e. Finally, the potential environmental performance of the already registered offset projects was examined, from the perspective of effectiveness assessment. On the basis of the evaluation results, to date, the offset projects have generated carbon reduction social benefits worth NT$53.6 billion, as well as increased industrial output from the stimulus to the development of the "green economy" amounting to NT$17.4 billion, for a combined total of NT$71 billion. Leaving aside the administrative costs of the government's policy for encouraging voluntary emissions reduction, it can be calculated that every NT$1 of investment by private-sector companies has generated environmental benefits and stimulus to the economy totaling NT$6.6. In the third work item, which related to management of environmental impact assessments, the content of the "Guidelines for Assessing the Increase in Greenhouse Gas Emissions Deriving from Development Projects and for Calculating Offset Plans" was reviewed and revised, and key greenhouse gas review items were collated for environmental impact assessments targeting different types of development project. Next, assistance was provided for individual project review and analysis with respect to 96 development projects requiring environmental impact assessment, with review work being conducted in three key areas: greenhouse gas emissions quantification assessment, quantitative analysis of reduction measures, and planning for greenhouse gas inventory-taking, auditing and recording, etc. Developers were required to submit concrete commitments and schedules on the basis of the above framework in order to facilitate subsequent monitoring and follow-up work. Finally, assistance was provided for follow-up work in relation to greenhouse gas reduction and offset projects for individual environmental impact assessments; this work included verification of greenhouse gas emission reduction schedules, greenhouse gas emission reduction benefits, the current state of implementation of greenhouse gas emission reduction measures, supporting evidence, the status of inventory-taking, auditing and recording operations, and follow-up auditing, etc. To date, already completed development projects that required environmental impact assessments have generated an increase in emissions volume of 75,448,000 tons, and a decrease of 35,673,000 tons, giving a net increase of 39,775,000 tons. The data show that greenhouse gas emissions reduction made in relation to the environmental impact assessment process for large-scale development projects totaled 35,673,000 tons, giving an emission reduction ratio of approximately 47%. When monetization calculations are performed to determine the social cost of carbon (SCC), it can be determined that the social benefits deriving from emissions reduction commitments made during the environmental impact assessment process amounted to approximately NT$42.9 billion per year. In addition, the potential benefits from the environmental impact assessment system in terms of greenhouse gas management were also examined at the level of individual project case studies. In the case of the Formosa Plastics Group (FPG) Sixth Naphtha Cracker, a total of NT$2.75 billion was invested in order to meet environmental impact assessment commitments. Through the industry linkage effect, this investment stimulated an increase in the annual production value of Taiwan's environmental industry of NT$6.16 billion, in conformity with the government's policy design approach which emphasizes the importance of having greenhouse gas emissions management operate in such a way as to stimulate growth in the "green economy," in line with international climate management trends.' The fourth work item was the