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Taiwan Energy Carbon Capture

Taiwan’s total CO2 emissions in 2021 were 267 million metric tons (MTs), according to statistics released by the Bureau of Energy, MOEA.  Taiwan is committed to achieving its goal of net zero carbon emission by 2025 as agreed by participants at the COP26 global climate conference in Glasgow.  Taiwan and other global economies will not be able to achieve this goal without deploying carbon capture, utilization, and storage (CCUS).  

The energy sector accounts for 71% of direct CO2 emissions in Taiwan, followed by transportation (13%), manufacturing (12.96%), households (2%), service industries (1%), and agriculture (less than 1%), based on 2021 statistics issued by the Bureau of Energy, MOEA, Taiwan in September 2022.  However, if combining both direct and indirect CO2 emissions, manufacturing becomes the top source of emissions, accounting for just over 50% of the total CO2 emissions in Taiwan.  

As mentioned above, the energy industry accounts for most of the direct CO2 emissions in Taiwan.  It is expected that there will be increasing demand from this sector in the following areas:  

  • CO2 storage sites development:  The offshore region of Taiwan’s western coast has unique geological formations that hold great potential for carbon storage.  While offshore potential is being evaluated, Taiwan Power Company (TPC) is moving forward on an inland carbon storage demo site in their Taichung Power Plant in central Taiwan near the west coast.   
  • CO2 sequestration equipment for coal, oil and LNG fired power plants:  TPC and independent power producers (IPPs) will experience increasing demand on such equipment for their existing coal, oil and LNG fired power plants in a move to reduce CO2 emissions.   
  • Hydrogen/green hydrogen:  TPC is implementing a 5% hydrogen/95% LNG mix-burn demo project in TPC’s Hsinta Power Plant, which will be the forerunner for TPC’s future hydrogen mix-burn projects.  
  • Software for carbon credits trading platform:  Taiwan will set up a carbon exchange offering an electronic platform for trading carbon credits.  The carbon exchange is scheduled to be operational in July or August 2023.  There will be demand for the trading management software from the carbon exchange.     

In February 2023, Taiwan put into effect the Climate Change Response Act.  This Act specifies net zero carbon emissions by 2050 as the primary policy goal to catalyze actions to reduce carbon emissions in Taiwan.  This Act also provides the legal basis for the collection of carbon fees, which will be the main driving force to provide incentives for the development of CCUS in Taiwan.  As part of this Act, Taiwan authorities must establish a carbon fee review committee to price carbon as a commodity.  Meanwhile, a carbon exchange will be established for trading carbon credits.  The carbon fees will be implemented in stages from 2024, starting from major emitters.  The fees will subsequently be applied to smaller companies.  Top emitters are the largest 287 producers from industries such as steel, cement, and semiconductors, which have combined annual CO2 emissions output of 25,000 MT or more.   

There are no laws or regulations in place governing the creation and administration of carbon storage sites.  CCUS is a new industry in Taiwan.  U.S. industry has expressed the need for legislation to provide the legal framework to grow the CCUS industry in Taiwan.  

It is expected that there will be increasing CCUS-related business opportunities in Taiwan.  We encourage U.S. companies to explore this market opportunity.  For additional information, please contact Kenneth Chen, Commercial Specialist, U.S. Commercial Service in Taiwan, at Kenneth.Chen@trade.gov.            
 

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