Ministry of Environment to Implement Greenhouse Gas Emissions Reduction Credit Trading Regulations

The Ministry of Environment recently announced the promulgation of the "Greenhouse Gas Emissions Reduction Credit Trading and Transfer Management Regulations" (Carbon Trading Regulations), which will officially take effect on August 15th. The carbon trading and auction platform established by the Taiwan Carbon Exchange (TCX) is expected to list products by the end of September, facilitating the first domestic carbon credit transaction.

Huang Wei-ming, Deputy Director-General of the Climate Change Office at the Ministry of Environment, noted that these regulations apply exclusively to domestic carbon credits, including current "Voluntary Emission Reduction Projects" and early offset and preliminary projects. Foreign carbon credits are not included. The Ministry has the authority to set upper and lower price limits to prevent market manipulation. TCX has been uniformly commissioned to establish the trading platform, prohibiting private entities from conducting transactions or auctions.

Emission reduction credits are measured in units of one metric ton of CO2 equivalent, with each unit coded with information to identify its type, project category, and monitoring period. Currently, the trading regulations specify three methods: "fixed-price trading," "negotiated trading," and "auction," allowing businesses to choose the most advantageous method based on the nature of their emission reduction credits, sales strategies, and profit considerations.

Eligible sellers for trading or auction are businesses that have executed offset projects, preliminary projects, or voluntary emission reduction projects and hold reduction credits；Buyers are businesses specified for purposes under Article 26 of the Climate Change Act, with participation not open to individuals. Reduction credits may be transferred only once after the transaction or auction, managed by the Ministry of Environment. A 5% transaction fee will be uniformly borne by the buyer to ensure market stability.