SBTi policy change could push carbon credit prices higher: TCX CEO

Taipei, April 26 (CNA) The price of voluntary carbon credits will likely rise if the Science Based Targets initiative (SBTi) recognizes the use of carbon credits to offset companies' carbon emissions, a Taiwan Carbon Solution Exchange (TCX) executive said Friday.

At a seminar on sustainability, TCX CEO Joshua Tien (田建中) explained the role of the TCX and told the audience that with the recent policy shift proposed by the SBTi, demand for carbon credits is bound to increase.

Asked after his speech what the consequences of that could be, he said, "it will get harder to purchase international carbon credits, pushing up their price."

The SBTi is a United Nations-endorsed climate-certification organization that develops standards for companies to set and abide by science-based emissions reduction targets to help limit global warming.

Tien said the SBTi has long been recognized as the initiative with the "strictest" criteria for meeting emissions targets, requiring companies to reduce emissions from their own operations and not recognizing the offsetting of emissions with purchased carbon credits.

In mid-April, however, the SBTi proposed including voluntary carbon credits as a legitimate tool to offset a company's "Scope 3 emissions," the emissions indirectly generated by the company's value chain activities and seen as the most difficult to cut, Tien said.

"This was a relief for many manufacturers, because it was a much more demanding task for them, as compared to the services sector, to cut emissions from manufacturing activities," the TCX executive said.

Some of Taiwan's largest companies, including Taiwan Semiconductor Manufacturing Co. (TSMC), have joined the initiative. According to an ESG report done by a local consulting firm, as of September 2023, at least 94 Taiwanese listed companies had made commitments to the SBTi.

When asked whether the revision of SBTi criteria has been confirmed, Tien said the organization is set to announce in July the "basic rules, thresholds and guardrails" for using carbon credits.

Though he suggested the price of carbon credits could be pushed higher, he did not venture a guess as to how big of an impact the SBTi move could have on those credits' prices.

The TCX, which was officially launched in August 2023 and began carbon credits trading in December, is Taiwan's only certified exchange that mediates the purchase of international voluntary carbon credits by domestic companies.