Revised Authorization, Reservation, Offset and Trading Regulations Announced for Stationary-Source Air Pollutant Reduction Differences


Since its implementation in 2015, the total air pollutant quantity control program in Kaohsiung and Pingtung has always had problems with emission reduction differences in terms of circulation and offsets in actual practice. The EPA completed revising the Authorization, Reservation, Offset and Trading Regulations Concerning Stationary Source Air Pollutant Emission Reduction Differences (固定污染源空氣污染物削減量差額認可保留抵換及交易辦法) on 9 July. Revisions included renaming the regulations to Authorization, Reservation, Offset and Trading Regulations Concerning Actual Stationary Source Air Pollutant Emission Reduction Differences (固定污染源空氣污染物實際削減量差額認可保留抵換及交易辦法), with the goals to strengthen Taiwan’s total quantity control system and encourage enterprises with pollution reduction potentials to step up reduction efforts.

The EPA noted that total quantity control is a policy tool that uses economic incentives to keep pollution within a control region from increasing. The “actual reduction differences” generated by factories via means like pollution controls or efficiency enhancement are needed by enterprises to set up new factories or expand the capacity of existing ones. Such economic incentives via buying and selling would motivate existing factories to reduce pollutions or have fundamental transitions. Taiwan’s first total pollution quantity control program carried out in Kaohsiung and Pingtung has achieved its goal of no increase in pollutions. However, the program has witnessed problems such as no circulation of reduction credits and those with credits being unwilling to sell them. The revisions include new or modified measures on proposals of credit use, collaborations between factories, optimized improvement, adjusting ratios of credit issuance for extensions, offsets in advance, and increasing access to release credits. The ultimate goal is a smoother operation of total quality control by increasing credit holders’ willingness to release them and increasing enterprises’ willingness to obtain these credits to cut down pollutions actively.

The EPA further explained that with many air pollution sources in Kaohsiung and Pingtung, multiple local policies are being implemented in the total quantity control program. They include tightened emission standards, mobile source controls, and inventory of state-run enterprises’ pollution reduction results. It is hoped that pollution can be reduced and air quality improved with efforts from all sides.

The following are the main points of the revisions:

(1) There will be no more designated annual emissions, and the definition of actual emission reduction difference is now specified to ensure proper pollution reduction.

(2) Public and private venues that look to replace old equipment with new ones will be able to apply proposals on utilization of obtained credits and be issued with up to 80% of actual emission reduction credits. This will encourage these venues to cut down pollution by switching to low-polluting productions or adopting the best pollution control technology, achieving a win-win situation that both reduces pollution and helps industries advance.

(3) Regulations are in place to specify applications to obtain actual emission reduction credits when public or private venues plan to jointly enhance pollution control efficiency.

(4) Guidelines are set for competent authorities of municipalities, counties, or cities to issue actual emission reduction credits to urge public and private venues to complete pollution improvement in advance.

(5) The amendments set the valid period of actual emission reduction credits at three years and, for extension applications, issue a maximum of 70% of credits to increase circulation of credits in the market.

(6) When actual emission reduction credits are traded, offsets can only be obtained at a lower percentage, and buyers are required to present a proposal on how to use such credits. Also, it is mandated that reduction credits obtained from trading are for self-use only and cannot be traded again.

(7) Competent authorities at all levels are now also required to take back the actual emission reduction credits held by public and private venues based on the control fee rates for air pollution from stationary sources. Such a move is to address difficulties that public and private venues have encountered in using credits. These difficulties include not trading credits before the required deadlines, credits that are not easily utilized based on proposals.

Excerpt from Major Environmental Policies, August 2021

Environmental Protection Administration, R.O.C.(Taiwan)
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