Offset Principles for Increased Greenhouse Gas Emissions Caused by Development Activities Announced

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On 27 March 2020, the EPA announced the Offset Principles for Increased Greenhouse Gas Emissions Caused by Development Activities (hereinafter referred to as the Principles). The Environmental Impact Assessment Act requires submission of environmental impact assessment (EIA) documents for certain development activities. Among these, the construction or expansion of factories, science parks taking up 50 hectares or more, thermal power plants using fuels other than natural gas, and combined heat and power (CHP) plants are required by the Principles to not only employ the best available technologies, but also offset the increased greenhouse gas (GHG) emissions caused by the activities.

Currently, GHG reduction work is jointly shared in six sectors: energy, manufacturing, transportation, residential, agriculture, and environment. Among them, the manufacturing sector should contribute to 50% of the reduction. The existing factories reduce emissions by switching boiler fuels, improving the manufacturing process, replacing old equipment, and using low-carbon fuels as alternatives. In 2018, the carbon intensity, which is the amount of carbon dioxide (CO2) produced per dollar of GDP, has decreased by 41% compared to 2005. As for new development projects of science parks and factories that require EIA reviews due to the scale of the activities, developers are required to use renewable energy and formulate GHG reduction measures.

To promote GHG reduction, it has become more important to review the GHG emissions of development activities as a part of EIA, including their GHG reduction technologies and emission offset plans. Therefore, the EPA formulated the Principles to assist the EIA committee in reviewing and providing developers with a clear set of standards for offset planning. The three main principles include:

1. Developers shall propose the use of best available technologies based on the type and characteristics of the activities to achieve maximum energy efficiency with minimum emissions, and submit the information to be reviewed by the EIA committee.

2. Developers shall promise to offset the increased GHG emissions after the best available technologies are employed during the operation period in compliance with the Principles. The increased GHG emission offset ratio should be at least 10% annually and implemented for 10 years. The ratio is determined by the environmental impact assessment review committee.

3. Offsetting implementation procedure: after the development project passes the EIA review, the developer is required to submit a GHG offset plan. Offsets can be obtained through the GHG offset projects implemented in compliance with the Greenhouse Gas Reduction and Management Act, or through conducting emission reduction measures outside of the development activities. Examples of these measures include switching the fuel used in the combusting equipment from coal or oil to natural gas or methane, improving or replacing existing boilers, using high-efficiency lighting or air conditioning equipment, and replacing old scooters with electric alternatives.

To encourage developers to provide financial or technological support for emission sources outside of their development activities, developers who help their affiliated enterprises that are not the developers of the activities being reviewed to implement emission reduction measures will receive 1.2 times the reduction credits for the same amount of reduction. This is to promote different businesses to work together for emission reduction.

In addition, the EPA has established a GHG Reduction Offsets Website (https://ghgtransaction.epa.gov.tw/Main/Index) that updates the latest information on the issuance of reduction credits. The website also provides credit owners and seekers a platform to post their information to allow developers to find suitable partners and obtain offsets in a timely manner.

Excerpt from Environmental Policy Monthly, 23 (4)

Source:
Environmental Protection Administration, R.O.C.(Taiwan)
Updated:
2020-10-29
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