Taiwan is phasing out coal-fired power stations and shifting to liquefied natural gas, as well as investing in solar and wind projects
Taiwan aims to get more than $1.5 billion in investment from insurance funds to help finance the island’s green energy transition as part of its climate change and carbon reduction goals, Environment Minister Peng Chi-ming has said.
Although most countries missed Monday’s U.N. deadline to set new climate targets, Taiwan has been eager to show it is a responsible member of the international community and ahead of the curve in tackling the issue.
Taiwan is not a member of the U.N. because of the objections of China which views the island as its own territory, and so is not a signatory to the Paris climate agreement.
Taiwan President Lai Ching-te last month announced a more ambitious carbon emissions reduction goal to reduce greenhouse gas emissions by 26% to 30% by 2030 compared to 2005 levels. The previous target was 23% to 25%.
Peng, speaking this week to Reuters at his ministry near Taiwan’s presidential office, said that ESCOs, or Energy Service Companies that design, build and arrange financing for energy-saving schemes, were an attractive investment.
The environment ministry, along with the economy minister and Taiwan’s financial regulator, the Financial Supervisory Commission, have formed a working group to channel funds from the insurance industry into ESCOs.
First phase investment is planned at T$10 billion ($304.92 million), expanding to T$50 billion ($1.52 billion) in the second phase, added Peng, who holds a doctorate in atmospheric sciences and was a weather broadcaster.
“ESCOs can provide long-term stable returns and are suitable for the insurance industry to invest in,” he added, without giving a timeframe.
Taiwan is phasing out coal-fired power stations and shifting to liquefied natural gas, as well as investing in solar and wind projects.
Peng said that subtropical Taiwan faced worse heat waves, stronger typhoons and more intense droughts, and thus had to take climate change seriously.
Taiwan recorded its hottest year on record in 2024, and in 2021 Taiwan experienced its worst drought in half a century after no typhoons – which the island relies on to replenish its reservoirs – made landfall the previous year.
“For countries at our latitude, drought is a real danger,” Peng said. “Although we have sufficient resilience to deal with it at the moment, we can’t rule out even more extreme situations won’t happen.”