Carbon Business
Methodology and Scope
This analysis focuses on how Taiwanese companies are using carbon credits, based on data from the four major registries: Verra, Gold Standard (GS), ACR, and CAR, as well as TSMC’s ESG reports(*1). Since registry records do not disclose the nationality of credit retirements, we adopted a two-step identification process to isolate Taiwanese buyers.
- We used AI-assisted matching to cross-reference all registry records against company lists published by Taiwan’s Ministry of Economic Affairs. To minimize false negatives, we also included keyword filters such as “Taiwan,” names of Taiwanese cities and counties, “co., ltd.,” and domain indicators like “.com.tw” to capture potential Taiwanese firms or their overseas subsidiaries.
- We manually verified the AI-identified records. Priority was given to transactions with larger volumes and recent activity, focusing on deals from the past five years and single transactions above 50 tons.
Due to the dominance of CPC Corporation and TSMC in transaction volume, certain parts of the analysis exclude these outliers to provide a more representative view of the broader market.
*1. TSMC is a Taiwanese multinational semiconductor contract manufacturing and design company and is one of Taiwan’s largest companies. The reason to include reviewing TSMC’s ESG reports is because we have noticed their retirement activities are significant and yet not all disclosed in the registries.
Findings
1. Project Types Preferences
- Overall, renewable energy projects are the most frequently retired by Taiwanese companies, both in terms of transaction volume and number of transactions, followed by forest-related projects.
- When registry affiliation is considered, we find that Verra is most associated with forest-related retirements, while Gold Standard (GS) is most commonly used for renewable energy projects.
- This result aligns with global trends. According to Sylvera data, from 2022 to 2024, projects of the REDD+ and Renewable Energy types accounted for approximately 58.28% to 68.12% of global carbon credit retirements.
2. Project Country Preferences
- Taiwanese companies show a preference for projects based in Asia. In terms of number of transactions, Brazil, India, Taiwan, and China are most common; in terms of volume, India, China, Vietnam, and Brazil lead.
- In earlier years, some banks appeared to intentionally select Taiwan-based renewable energy projects for retirement. However, this trend has become less prominent over time. This shift suggests that the concern—often raised in the past—that Taiwanese companies were directing funds to overseas projects rather than supporting domestic ones is no longer a primary consideration. More companies now recognize that decarbonization and net-zero goals are global in nature. If global warming exceeds 2°C, everyone is affected, and thus emission reductions must be approached from a global perspective.
3. Vintage Preferences
- Taiwanese companies show a slight preference for projects with vintages from the past five years.
- When analyzed by registry, Verra shows a higher average retirement volume per transaction for vintages older than five years (409.79 tons per project), compared to vintages within five years (340.8 tons). This may support the hypothesis that buyers making large-volume purchases are more likely to choose older (and potentially cheaper) credits.
- In contrast, GS data shows that more recent vintages are associated with higher average volumes per transaction—181.11 tons for ≤5 years, versus 90.55 tons for >5 years.
4. Retirement Purposes
- The most common reason for carbon credit retirements among Taiwanese companies is to offset one-time events such as annual banquets, forums, or family days.
- The second most common use is for organization-level voluntary declarations of carbon neutrality, particularly to compensate for unavoidable emissions from activities like employee commuting or transportation.
- A third reason is to provide added value through carbon-neutral products or services, where the credit retirement supports the climate claims of the offering itself.
