The government may announce plans next week to introduce measures such as a tax on carbon dioxide emissions aimed at boosting natural gas use and cutting pollution caused by the nation's over-reliance on oil.
The steps will be mapped out at the nation's first energy-policy conference in seven years, to be held in Taipei over two days starting on Monday, said Wang Yunn-ming (
Already Asia's third-largest importer of liquefied natural gas, Taiwan aims to double its gas consumption to 13 million tonnes a year by the end of the decade to cut emissions of greenhouse gases.
The plan for cleaner air may increase costs for companies such as Taiwan Power Co (Taipower, 台電), Chinese Petroleum Corp (中油) and China Steel Corp (中鋼).
"Petrochemical, paper, steel, cement and man-made fiber industries will see their costs rise," said Wu Tsai-yi (吳在益), an economist at the Taiwan Research Institute (台綜院).
"Companies that have lower emissions will be more competitive," Wu said.
The conference comes about four months after the Kyoto Protocol, an international accord aimed at reducing greenhouse gas emissions, took effect. Taiwan, which is responsible for about 1 percent of the world's production of these gases, is not a signatory to the treaty.
Still, the government wants to meet Kyoto targets as it seeks to cut a reliance on oil for 51 percent of its energy needs, a level that is "too high and risky," Wang said.
"We want to increase natural gas consumption, and make oil account for a smaller portion," Wang said in a June 15 interview.
"We'll decide on steps to achieve this at the conference," he said.
Gas currently accounts for 8 percent of Taiwan's energy needs.
Measures the government may take include a tax on carbon dioxide emissions, setting a ceiling on greenhouse gas production and creating a trading system for emissions allowances similar to the one in place in the EU, Wang said.
Carbon dioxide accounts for 74 percent of the greenhouse gases Taiwan produces, according to Wang. Taipower, the nation's biggest electricity producer, is responsible for a third of the carbon dioxide Taiwan generates, according to the company.
The government will encourage the use of natural gas at new power plants and there are plans for a fund to subsidize the use of renewable power sources such as wind and solar energy, Wang said.
Burning natural gas produces about 20 percent less carbon dioxide, the most common greenhouse gas, than diesel and 40 percent less than fuel oil, according to Chinese Petroleum, Taiwan's state oil refiner and only natural gas producer.
Aside from efforts to stem pollution, the conference will also consider plans to liberalize the nation's power market, Wang said.
Taipower, which provides about 75 percent of the nation's electricity and monopolizes transmission, may be forced to share its power grid with other electricity producers, Wang said.
"Power producers will be allowed to sell electricity directly to customers, using Taipower's network. We'll liberalize the power market to create competition and improve efficiency," he said.
Taiwan has eight independent power producers and 95 companies that use steam to generate power, and which sell electricity to the state-run utility.
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