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Taiwan exchange set to open trading of international carbon credits

12/11/2023 09:50 PM
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Taiwan Carbon Solution Exchange Chairman Sherman Lin. CNA file photo
Taiwan Carbon Solution Exchange Chairman Sherman Lin. CNA file photo

Taipei, Dec. 11 (CNA) The Taiwan Carbon Solution Exchange (TCX) will open trading of international carbon credits for the first time ever on Dec. 22, offering international carbon credits from seven countries for purchase by local enterprises.

The first batch of international carbon credits will originate from seven countries in Asia, Africa and South America and will be priced at around US$5 to US$15 per metric ton of carbon emission equivalent, according to a TCX source.

The trading hours at the exchange will be from 9 a.m. to 3:30 p.m. and purchases will be restricted to domestic legal entities, who will not be able to resell the credits they buy on the exchange, according to the source.

According to the exchange's estimates, about 15 to 20 listed companies are expected to make purchases when the exchange opens on Dec. 22, but the uses of the credits they buy will initially be limited.

Carbon credit markets have been sprouting up around the world to help enterprises and suppliers meet carbon reduction targets demanded of them by governments or big brands and provide support in making their operations carbon neutral or offsetting carbon taxes.

The TCX source suggested that companies purchasing international carbon credits from the initial batch will likely do so to help them move closer to carbon neutrality and fill in gaps in their efforts to decarbonize their operations.

The credits on offer, however, will not yet be able to offset carbon taxes imposed on their generation of carbon emissions because Taiwan's government has yet to announce carbon fee-related regulations.

They will also not be able to reduce carbon tariffs they may have to pay in the future under the EU's Carbon Border Adjustment Mechanism (CBAM), which enters into force in 2026, because the CBAM will not allow the use of purchased carbon credits.

Companies will also not have access on the TCX initially to domestic carbon credits because the necessary regulations have yet to be put in place.

Even with these early limitations, there will still be a benefit to local enterprises in having the TCX up and running, Ministry of Environment official Su Yi-yun (蘇意筠) said.

Su said that giving domestic enterprises a place to purchase international credits in Taiwan will save them the time they otherwise would have had to spend traveling to Singapore or other places for international carbon credit consultations and trading.

(By Pan Chih-yi, Chang Hsiung-feng and Alison Hsiao)

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