Sustainable development has national consensus in Taiwan.
On a hot August afternoon earlier this year, President Lai Ching-te (賴清德) convened the first meeting of the National Climate Change Committee in Taipei City. The group comprises Cabinet members as well as representatives from the academic, civic and industrial sectors as a way to extend Taiwan’s strategic thinking on climate and energy governance into high-tech fields while taking into account emerging industrial needs in areas such as artificial intelligence (AI) and international green finance. The move is in character for Lai, who spent more than a decade as a lawmaker promoting legislation like 2002’s Basic Environment Act, which is commonly known as Taiwan’s environmental constitution. “Sustainable development is a goal that we all agree upon, regardless of party affiliation, and one that we’re all working together to achieve,” Lai said at the meeting.
A land-based solar farm and electricity storage facilities are situated on former salt fields in the southern city of Tainan. (Courtesy of Taiwan Power Co.)
The country has moved quickly: Taiwan’s renewable resources generated roughly 4 percent of its total electrical power in 2015, and as installed capacity reached approximately 20 gigawatts in June, the Ministry of Economic Affairs (MOEA) reported that the country is on track to produce 20 percent of its electricity from renewable sources by November 2026. With the financial market acting as a key driver of the energy restructuring campaign, the Cabinet-level Financial Supervisory Commission (FSC) launched the Green Finance Action Plan in 2017. In the initial stage, local banks and insurance companies were encouraged to back businesses in the sector, especially those in solar and offshore wind power. Financing reached NT$1.2 trillion (US$37.7 billion) by the end of 2020, and the plan’s second and ongoing third phases have expanded the scope beyond energy companies.
State-run Taiwan Power Co. operates a wind farm just off the coast of the central county of Changhua. (Courtesy of Taipower)
Pooling Knowledge
Enterprises focusing on environmental, social and governance (ESG) considerations are crucial to an effective transition to renewable power. Jerry Lin (林士傑), head of the Center for Sustainable Finance Development in the FSC-overseen Taiwan Academy of Banking and Finance (TABF), has witnessed the academy’s hard work bear fruit. “Around a decade ago, we were the first in the country to arrange training programs for financing renewable energy enterprises,” Lin recalled. In addition to educating personnel, TABF has built a platform to foster connections in the industry. Sustainable finance now entails a cross-sector working environment that brings together environmental, climate, AI, information and communications technology, and financial specialists.
(Infographics by Lin Chien-ju)
In 2022 the Cabinet-level National Development Council released Taiwan’s Pathway to Net-Zero Emissions in 2050 after seeking recommendations from ministries. The blueprint sets out systematic strategies for reinforcing climate legislation and technological R&D to prompt transition in the energy, industrial, lifestyle and social spheres. The plan aims to enhance national competitiveness while achieving environmental sustainability by laying a foundation for long-term growth and stability.
Taiwan continues to strengthen power supply infrastructure like the ultra-high voltage lines extending above Shihmen Reservoir as part of updates to electricity transmission systems in the north of the country. (Courtesy of Taipower)
Existing programs like the FSC’s green finance scheme are part of that foundation. To participate, financial institutions must not only assess and disclose carbon emissions from their own electricity consumption and transport, but also review emissions from their investment and loan positions. Lin explained that the latter task requires a comprehensive database that institutions can access to evaluate their partner enterprises and potential clients’ ESG and climate-related risks. The database was established last year and is updated with assistance from the FSC’s Joint Credit Information Center. Other organizations under the supervision of the FSC jointly analyze data that tracks performance in the financial business sector and release reports like the Sustainable Finance Evaluation. First released in January, it reviews banks, insurance companies and securities firms. Its second edition is due by the end of this year and will cover 79 entities, up from 57 in the first report.
New Developments
Facilitating banking services for local energy service companies, which currently number more than 300, is part of the MOEA’s scheme to reduce electricity use in factories across the country, according to Energy Administration (EA) Deputy Director General Lee Chun-li (李君禮). This year the EA launched an energy-saving program whose primary goal is to introduce the industrial sector to entities that help others reduce energy consumption. “We begin by understanding which businesses want to enhance energy efficiency and then match them with an energy service company,” Lee said. The four-year initiative also includes subsidies for customers who buy home appliances that meet certain standards, as items like air conditioners and refrigerators ;account for around 40 percent of household electricity consumption. The EA estimates that 7.31 million such appliances could be replaced by 2026, leading to a substantial reduction in energy waste.
Wind-resistant drones help determine the condition of turbines’ blades. (Courtesy of EA)
Looking ahead, Lee pointed to technological strengths that give the country a major advantage in developing smart solutions for energy conservation and worker safety. He cited advanced devices like wind-resistant drones that conduct inspections of offshore turbines. “The drones take high-resolution pictures so AI-assisted systems can assess blade condition,” he said. “Turbines can then be fixed or maintained more efficiently.” The official expects to see big data analyses and modeling expand into such areas as weather forecasting to project solar and wind power supply.
Eugene Chien (簡又新), a consultant to the presidential climate change committee and founder of the nongovernmental organization Taiwan Institute for Sustainable Energy, is also enthusiastic about such dual-axis promotion of digital transformation and net-zero goals. “AI operations guzzle electricity,” he said. “But in the long run, they’ll help save even more.” Chien also chairs the Taiwan Net-Zero Emissions Association, established in 2021 in Taipei by the sustainable energy institute and 26 influential local enterprises. The group consists of the world’s largest contract chip maker, Taiwan Semiconductor Manufacturing Co., and other businesses seeking full reliance on renewable energy by 2050. Chien recalled that when he founded the institute in 2007, its mission struck many as strange. “Now issues related to climate change receive intense scrutiny across the world,” he said. “There’s so much underway in the public and private sectors, and even more yet to be done.”
Write to Pat Gao at cjkao@mofa.gov.tw