Historically, international trade regulations emphasized the location of product manufacturing, the origin of components, and the use of third countries to circumvent tariffs. The introduction of the European Union’s Carbon Border Adjustment Mechanism (CBAM) has shifted attention from the geographic origin of products to the source of their carbon emissions. Carbon pricing, border measures, and green procurement are now prominent global trends. Companies are increasingly required to disclose not only the origin of their products, but also the energy sources utilized, the volume of carbon emissions produced, and the traceability of the supporting data. As a result, carbon emissions have transitioned from a sustainability concern to a regulatory requirement that directly influences market access.
CBAM Expands Carbon Scrutiny: Companies Must Demonstrate Both Product Origin and Production Methods
The new system may also create opportunities for circumvention. Companies could use renewable energy certificates, carbon accounting methods, or supply chain data to portray carbon-intensive products as low-carbon goods, resulting in “green electricity laundering” or “carbon laundering.” Such practices do not necessarily involve direct falsification. They may also arise from gaps in certificate rules and information, producing formal compliance with limited actual emissions reductions. Regulatory scrutiny must therefore focus on whether data are authentic, complete, and traceable.
Formal compliance does not always result in substantive emissions reductions. For example, in 2023, Apple introduced an Apple Watch marketed as carbon neutral, citing manufacturing emissions reductions, renewable energy utilization, and carbon offsets. However, in 2025, a German court determined that most land leases for the Paraguayan reforestation project supporting the offsets would expire in 2029, undermining the assurance of long-term carbon absorption. As a result, the court prohibited Apple from continuing to market the product as “carbon neutral.”
A 2023 controversy involving Icelandic renewable energy certificates highlighted the risk of double counting. Iceland sold some of its renewable energy certificates to European companies, while domestic industries also claimed to use renewable electricity from the same source. This allowed the same environmental benefits to be claimed both domestically and abroad. The Association of Issuing Bodies in Europe temporarily suspended exports of Icelandic certificates. The case shows that even when renewable electricity is genuinely generated, reported emissions reductions remain unreliable if the same environmental benefits are claimed more than once.
These cases provide significant lessons for Taiwan. Taiwanese exports are characterized by high electricity consumption, substantial raw material inputs, and complex multinational supplier networks. As more markets implement carbon pricing, border measures, or green procurement requirements, Taiwanese companies will likely face increasing demands to supply product carbon footprints, detailed energy source information, and upstream emissions data.
Integrating Carbon Data into Corporate Governance: Government Initiatives to Enhance Carbon Footprint, Verification, and Certificate-Tracking Systems
Companies must prioritize the prevention of double counting renewable energy benefits. A single renewable energy certificate should not be claimed multiple times by the power generator, electricity retailer, manufacturer, or overseas customer, and must be retired after use. Proof of purchase alone may be considered insufficient if a company cannot document ownership of the certificate, its period of use, and the facility to which it applies.
Second, the purchase of renewable electricity or carbon credits does not guarantee genuine emissions reductions. Actual reductions should result from process improvements, equipment upgrades, enhanced energy efficiency, and decreased reliance on carbon-intensive materials. Carbon credits must be evaluated for additionality, permanence, and the risk of double counting. Companies should refrain from labeling products as carbon neutral solely on the basis of certification.
Companies should integrate carbon emissions data into their corporate governance frameworks. Procurement departments ought to require suppliers to submit raw material and energy data. Legal departments should define liability for inaccurate data and establish recourse mechanisms. Audit departments must verify the retirement of certificates and ensure that emissions reduction benefits are not claimed for multiple products.
The government should broaden its focus beyond the European Union’s CBAM. It is necessary to establish carbon accounting, verification, and certificate-tracking systems that are applicable across various markets. In addition to developing product carbon footprint databases, shared industry tools, and third-party verification mechanisms, the government should support small and medium-sized enterprises in obtaining upstream data. It should also clarify the recognition of Taiwan’s renewable energy certificates within the frameworks of other countries.
In the past, certificates of origin established where a product came from. In the future, carbon emissions data must also demonstrate how the product was made. This is more than a sustainability disclosure requirement. It is becoming a new threshold for companies seeking to secure orders and maintain their positions in supply chains. If Taiwan treats carbon accounting merely as paperwork required by customers, it risks losing the initiative under the next generation of trade rules. The government and businesses must establish a credible and traceable carbon data system that prevents double counting and turns low-carbon capabilities into verifiable competitive advantages. Future competition will hinge not only on who produces fewer emissions, but also on who can substantiate emissions reductions with credible data and earn the trust of international markets.
Source: Daniel Liu (September 30, 2026). Carbon Emissions Also Have a Country of Origin. Economic Daily News. https://money.udn.com/money/story/5629/9784377