The Committee thanks the Taiwanese government for its continued focus on SDG White Paper issues, and we look forward to seeing those efforts bear fruit in the near future.

Given the emergence of electric vehicles and the importance of Taiwan’s retail and electronics industries, the Committee would like to focus on addressing their recycling needs. We also encourage the government to include both “carbon fees” and “carbon credits” in implementing carbon-reduction strategies and in making regulations more transparent and persuasive by utilizing public policy assessment tools. Such efforts would boost the government’s circular economy plan, part of the “5+2 Innovative Industries” program, for the world to witness.

Suggestion 1. Implement carbon-reduction strategies that include both “carbon fees” and “carbon credits.”

We recommend that the Taiwanese government put a price/value on carbon emissions to incentivize businesses and consumers to adopt more energy-efficient practices and reduce their carbon emissions. Imposition of a “carbon fee” can be a critical tool to accelerate the deployment of low-carbon technologies, products, services, and infrastructure, as well as to promote the green energy market. At the same time, we also recommend that the government offer “carbon credits” to companies that are engaged in providing solutions to challenging environmental issues, such as the recycling of EV batteries, solar panels, and certain industrial waste from strategically important industries. To develop such a policy, it can look to useful models already employed in the EU, South Korea, and several U.S. states. We believe a balanced approach employing both “carbon fees” and “carbon credits” can best achieve the carbon-reduction goal for Taiwan.

Suggestion 2: Hasten the introduction into Taiwan’s food market of containers made from recycled plastics.

Taiwan has a recycling rate of about 95% for PET bottles, the third highest rate in the world. But that high degree of recycling has not been of great help to the environment because proper use has not been made of the resulting “resources.”

We are gratified that some progress was made on this issue in February this year when the Environmental Protection Administration (EPA) eased restrictions on the use of recycled plastic material in food utensils. However, it remains unclear whether the Taiwan Food and Drug Administration (TFDA) continues to regard utensils made with recycled plastic as “reused plastic” under Article 2 of the “Sanitation Standard for Utensils, Containers, and Packages.”

Although the TFDA made known during meetings with the Committee at the National Development Council last year that it is exploring the feasibility of allowing the importation or manufacture of plastic food containers using recycled plastic materials, we have not seen any concrete progress so far – and no member companies from the Committee have been invited for consultation on the issue.

While more and more foreign food industries are being encouraged by their governments to use recycled plastic materials such as rPET and rHDPE in food containers, Taiwan has been slow in following suit. So as to better promote Taiwan’s sustainability goals and avoid potential international trade hurdles, we urge the TFDA to hasten the adoption of regulations that set proper standards and review processes for local manufacturers and importers to follow.

Suggestion 3: Make regulations more transparent and persuasive by utilizing public policy assessment tools.

Starting in 2020, the Taiwan EPA has implemented a series of regulations prohibiting the use of disposable containers and utensils made from ALL types of material used for dining-in in department stores, shopping malls, and hypermarkets. The policy initiative was well-intentioned with the objective of reducing waste, but it ignored the fact that washing dishes will increase the consumption of water, currently a precious resource in Taiwan.

In banning disposable utensils made from all materials, Taiwan imposed a more comprehensive prohibition than most countries in the world, but the volume of waste that could be reduced through this measure was never estimated or quantified. Also, no public assessment was conducted as to whether the benefits derived by such waste reduction would outweigh the costs involved, such as the increased consumption of water and energy resources by the washing and drying of dishes.

We suggest that the government review its environmental-protection-related regulations using policy assessment tools such as Life Cycle Assessment (LCA), statistical surveys, and Regulatory Impact Analysis (RIA) to ensure that both policymakers and the public are aware of the benefits and costs involved. Using those tools will help make regulations more cost-efficient and more acceptable to consumers.

Suggestion 4: Establish a sustainable ecosystem for Li-ion battery recycling, clearance, and disposal (RCD) in Taiwan.

Under Article 15 of the Waste Disposal Act (WDA), importers and manufacturers of lithium-ion (Li-ion) batteries bear the responsibility for recycling, clearance, and disposal (RCD). Article 16 further stipulates that such responsibilities shall be met by reporting the import/manufacture volume to the authorities and paying the RCD fee, which in 2014 was raised from NT$19.5/kg to NT$39/kg.

Li-ion battery cells constitute the heart of the entire powertrain for Battery Electric Vehicles (BEVs). Given consumer’s concerns about the range of BEVs, manufacturers have tended to make bigger battery cells. Some can easily reach half a ton, leading to very high RCD fees (about NT$20,000 per BEV for just the battery).

The recycling and disposal of Li-ion batteries is not a fresh topic. The wide adoption of smart phones and portable PCs in Taiwan already triggered many discussions of this subject in the past. Yet due to the lack of investment in relevant technologies, very few full-service RCD providers exist in the market, leaving BEV importers with no choice but to export the spent batteries to other countries. (The recycling, clearance, and disposal functions each require a separate license. Recycling and clearance providers for Li-ion batteries can be found in Taiwan, but companies with disposal licenses are rare). As companies are paying RCD fees to the government, it is reasonable for them to expect the whole RCD service chain to be available.

In 2020, the number of newly registered BEVs came to 6,243 units, doubled the level of the year before. Meanwhile, the number of electric two-wheelers also keeps growing – with 455,764 units registered in 2020 alone  – thanks to continued government subsidies. Overall, the scale of the electric motor vehicle market is significant enough to sustain RCD businesses for Li-ion batteries. Therefore, the Committee would like to make the following recommendations:

1. Devise a strategy – the earlier, the better – to promote the use of second-life batteries in Taiwan. While BEV batteries can usually last for up to eight years for powering an automobile, they would still be quite functional for energy storage purposes. For BEV importers to have to send still-valuable batteries to other countries is a waste, especially when there is demand for energy storage from regulated intensive energy users. The Committee urges the Ministry of Economic Affairs to come up with a plan to address this problem.
2. Utilize the Recycling Fund to help build up domestic capacity for battery disposal. Since the EPA has been collecting high RCD fees from BEV importers, it should make use of the funds to cooperate with relevant government agencies and the private sector to complete the ecosystem for Li-ion battery RCD.
3. Alongside domestic capacity building, also consider relaxing regulations that restrict Li-ion batteries from being exported to non-OECD countries (including China) if they have sufficient capacity for battery disposal.

Suggestion 5: Provide effective market incentives for greener products.

Recycling all plastic waste would be one of the most straightforward ways to cut greenhouse-gas emissions. As Taiwan plays a key role in the manufacturing supply chain for ICT products, it is crucial for the authorities to encourage the development of green technologies and work toward a circular economy. The Committee understands that the promotion of green products and technologies requires a well-designed environmental policy to effectively encourage behavioral changes and achieve environmental objectives without imposing excessive burdens on the economy.

To promote a circular economy, the EPA plans to give eco-labels to products that use Information Technology Equipment-derived Post-Consumer Recycled materials (ITE-PCR) and marine-waste recycled materials. To further achieve behavioral changes in government procurement and consumer purchases, the Committee recommends that the authorities provide incentives like carbon credits or carbon tax deductions to companies that purchase products with those eco-labels – or that include products with ITE-PCR eco-labels as environmentally preferable products for government procurement.