The United Nations' Intergovernmental Panel on Climate Change (IPCC) has issued a stark warning: unless we limit global temperature rise to below 1.5°C within the next 20 years, we will face an increase in extreme climate events.
These events will jeopardize global energy, water resources, food security, and housing. As a result, nations have come to a consensus with the goal of achieving "Net Zero Emissions by 2050" to curb the worsening effects of global warming.
Global Net Zero Policy in Full Swing
To achieve "Net Zero Emissions by 2050," the UN initiated the Paris Agreement in 2015. Over 130 countries have committed to achieving net-zero emissions by 2050 or later in this century.
In January of this year, Taiwan formally enshrined the goal of achieving "Net Zero Emissions by 2050" into law through The Climate Change Response Act.
Furthermore, the government has mandated Carbon Footprint Verification (CFV) for companies of varying capitalizations, with all listed companies expected to complete the CFV process by 2027.
In addition to Taiwan's initiatives, the European Union (EU) is set to commence the trial phase of the Carbon Border Adjustment Mechanism (CBAM) in October of this year. CBAM will be fully implemented by 2026, requiring importers in high-carbon emissions industries to pay carbon taxes.
By 2034, CBAM will be fully enforced and expanded to encompass additional sectors. Furthermore, starting in 2035, all newly sold cars in the EU must adhere to zero-carbon emission standards.
Having CFV Is a Necessary Market Entry Strategy
In response to upcoming import regulations, Carbon Footprint Verification (CFV) has become increasingly critical.
CFV involves using specific methods and data collection to calculate greenhouse gas (GHG) emissions associated with products, companies, or countries.
The objective of CFV is to offer a precise assessment of GHG emissions, facilitating efforts to reduce emissions over time and mitigate the impacts of climate change.
Tesla Carbon Credit Sales Reach Record $1.78 Billion in 2022
A thorough Carbon Footprint Verification (CFV) enables businesses to gain a detailed understanding of their emissions profile and effectively manage carbon credits.
By actively reducing greenhouse gas emissions, companies can lower the expenses associated with purchasing carbon offset credits. Moreover, they can potentially generate additional revenue by selling any surplus allowances on the carbon market. This dual benefit not only supports environmental sustainability efforts but also enhances financial outcomes for businesses.
In August, the Taiwan Carbon Credit Exchange was established,
and it is expected to commence domestic and international carbon credit transactions in 2024.
This means Taiwan joins the global carbon market, introducing new dynamics to businesses' net-zero strategies.
Through CFV, businesses can ensure compliance with ESG (Environmental, Social, Governance) standards and actively implement emission reduction measures to address the challenges of climate change.
Simultaneously, investors can utilize this information to evaluate the sustainability of their investments and support companies engaged in net-zero, achieving dual financial and environmental returns.
Therefore, Carbon Footprint Verification (CFV) serves not only as a crucial tool for achieving climate goals but also as an essential component of fulfilling ESG (Environmental, Social, and Governance) objectives.
Acquiring the knowledge and capability to conduct CFV effectively can make a substantial contribution to safeguarding our planet for future generations.
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