202412/19
To encourage investment in forest carbon sinks to achieve the goal of net-zero carbon emissions, the Forestry and Nature Conservation Agency (FANCA) of the Ministry of Agriculture (MOA) and the Taiwan Forestry Research Institute have jointly developed two voluntary carbon reduction methodsmethodologies, namely the "Carbon Sink Project for Improved Forest Management" and the "Carbon Sink Project for Bamboo Forest Management." The reduction methodologiesmethods have officially been announced to come into effect today (12/19) after being reviewed by the Ministry of Environment (MOENV). Enterprises and governments at all levels can invest in forest and bamboo forest management according to these two methodologies. The carbon sink benefits obtained can be converted into voluntary reduction carbon credits (i.e., carbon rights), which can not only be used to offset carbon emissions, but can also be traded in carbon rights exchangesthe Taiwan Carbon Solution Exchange (TCX). The FANCA’s Carbon Sink and Biodiversity ESG Project Matching Platform will also launch other relevant projects for enterprises to invest in.
Echoing the Forest Net-Zero Pathway and Increasing the Possibilities of Forest Carbon Rights
Forests absorb carbon dioxide from the atmosphere and convert it into carbon. This carbon is stored in the trees, which play a crucial role as "natural carbon sinks." In response to the 2050 net-zero emission target, the FANCA has proposed three major strategies: increasing the forest area, strengthening forest management, and enhancing the use of domestic timber, to comprehensively enhance forest carbon sinks. Before the announcement of the forest and bamboo forest management methodologies, the only domestic natural carbon sink methodology was the "Afforestation and Tree Planting Carbon Sink Project." In particular, Taiwan’s forest coverage rate exceeds 60%, of which the plantation forest area is about 460,000 hectares, while the bamboo forest area is about 180,000 hectares. In the past, due to the downturn of the forestry industry, many of the forests were not properly managed and were in an aging or even abandoned state. The carbon sequestration capacity of forest land can be enhanced by promoting the growth of existing forests through the tending, thinning, and strengthening of forests and bamboo management, or reforestation after logging. In addition, using harvested wood and bamboo to produce building materials, furniture, and other forest products can extend the carbon storage of the original forest trees and increase sequestration capacity.
The FANCA emphasized that although the natural growth of forests and bamboo forests can deliver carbon sequestration benefits, carbon sinks can only be converted into carbon rights with trading value through the implementation of management projects after review and approval. The two published methodologies provide quantitative guidelines for the sequestration benefits generated by strengthening forest and bamboo forest management measures. According to the regulations of the MOENV, only businesses (such as legal persons, enterprises, and groups) can apply to implement a project. Business groups that would like to apply can produce project proposals according to the methodology and submit their application to the MOENV in accordance with the voluntary reduction project procedures.
Applicable Scope and Conditions
The MOENV announcement specifies a minimum area of 0.5 hectares for participating in a forest management methodology. The scope of application is to increase forest carbon storage, by implementing different management measures, of existing forest lands other than wetlands through pruning, thinning, and extension of the logging rotation period. The aim is to ensure sustainable forest management, enhance the growth potential of forest trees, improve the quality of the timber, and optimize the production and utilization of forest products. The minimum area for the bamboo forest management methodology is 0.1 hectares. This methodology is aimed at bamboo forest management focused on the harvesting of bamboo stalks. Management measures can include tending, adjusting the density of standing bamboo, and maintaining the health of the bamboo forest. It is applicable to both running- and clumping-type bamboo. Considering that forest management requires professional expertise and long-term planning, and measures must be implemented in a timely and appropriate manner, registration applications can be submitted within three years from the date of implementation of the management measures.
The carbon storage benefits of wood and bamboo products are also included in the forest and bamboo forest management methodologies. To obtain the reduction carbon credits, applicants can provide relevant certification information for wood harvesting and trading, and publish it on the officially recognized forest product traceability system.
Driving Natural Carbon Sink Investment: Matching Companies for Public-Private Collaboration
The FANCA stated that according to regulations of the MOENV, natural persons cannot apply for the voluntary reduction project. However, considering that most of the domestic private forests or state-owned leased afforestation lands are operated by individual forest farmers, the FANCA established the "Carbon Sink and Biodiversity ESG Project Matching Platform" in April this year. This platform encourages enterprises to invest in natural carbon sinks and biodiversity conservation through public-private collaboration. In addition to the national forest projects under the jurisdiction of the FANCA, it will be further expanded to include other public and private land as matching targets by mid-2025 for enterprises to invest in sequestration enhancing measures, including afforestation and forest/bamboo forest management. These efforts will help meet the needs of enterprises to implement ESG or obtain voluntary reduction carbon credits from the MOENV, expand the diversified benefits of forest carbon sinks, and promote the sustainable management and utilization of plantation forests.