What you need to know
A white label manufacturer is showing the way for Taiwan's companies to fall into line with a greening global supply chain.
In February, TCI, a white-label bioscience company that makes dietary supplements and cosmetic products, became the first company in Taiwan to sign on by committing to reach 100 percent renewable energy by 2030 with an interim target of 30 percent by 2020.
This commitment, from a company without a consumer facing brand, sends a strong signal. It tells utilities, that companies and customers will continue to demand a transition to cleaner energy.
And with Taiwan having just re-launched its renewable energy certificates (RECs) program, known as T-REC, it is now easier than ever for businesses, institutions, and individuals to vote with their electricity bill and follow TCI’s lead.
TCI, a public company listed on the Taiwan Stock Exchange, represents the vanguard of what the Taiwan government hopes will be a significant shift in the power purchasing habits of it’s the country’s major companies. To this end, the government has introduced reforms to the Electricity Act and Renewable Energy Development Act to promote private investment in Taiwan’s renewable energy industry.
The government’s aim is two-fold: to help meet the Tsai administration’s goal of generating 20 percent of Taiwan’s energy mix from renewables by 2025, and to make it easier for companies involved in the global supply chain to conform with global renewable energy and sustainability initiatives.
Despite the planned U.S. withdrawal from COP 21 (otherwise known as the Paris climate accord), the rest of the world, and especially the private sector, continues to commit to reducing carbon emissions.
Under the RE100 initiative, large corporations commit to using 100 percent renewable energy by a set date – usually 2030 or 2040. Some big names signatories include Google, Apple, Facebook, Walmart, and Ikea. Google has even announced they have already met that goal.
Taiwan is a key supplier of components to many of the world’s major brands, particularly in the technology industry, and for any of these companies to meet their 100 percent commitment, they will have to rally their Taiwan-based partners to get on board.
But maintaining such commitments in fossil fuel dependent countries like Taiwan is no small task – renewables only make up about 6 percent of electricity generation in Taiwan’s current energy mix. And given that Google has data centers and operations in Taiwan, how can they, and any other company that wants to follow suit, claim to use 100 percent renewable energy?
RECs, Efficiencies, and Investment
Part of the answer lies in the aforementioned RECs. These allow companies to “purchase” renewable energy from the grid for an increased price. This differs from “offsetting”, whereby companies pay a fee to mitigate the use of a corresponding amount of carbon. Under RECs, while in reality the electricity that enters their facility may have come from a coal plant, they are in fact purchasing energy generated from a renewable source.
Taiwan’s T-REC program provides clear standards and ensures that the power purchased comes from renewable sources, and includes a platform to match buyers and sellers. Cathay Financial Holdings was the first company to make use of the platform late last year.
Besides purchasing cleaner energy, companies can reduce the amount of energy they use, saving money and reducing impact simultaneously. Energy efficiency programs help companies use less power in general, which makes renewable goals easier to reach.
TCI’s approach has been to develop a LEED (Leadership in Energy and Environmental Design) Gold certified factory, with an eye to creating other high-efficiency factories in the future.
Compared with traditional operations, the facility reduces energy demand by 65 percent and water consumption by 30 percent, the company told The News Lens.
The highly automated factory only requires two people to operate and incorporates solar panels, heat pumps, and energy efficiency equipment.
It is rare to see this level of commitment from an original equipment manufacturer (OEM) – you might expect one of Taiwan’s more well-known brands to be the first to commit.
But TCI has been quietly working on sustainability for years. Since starting these greener policies they have reduced carbon emissions by 549 tons, generated 1 million kwh of clean energy, and planted 100,00 trees. It is also worth keeping in mind that TCI is a white-label manufacturer, they don’t have branded products. This sends a signal that brands and consumers can now apply pressure up the supply chain to manufactures. If this trend is supported and continues, it will have ripple effects across Taiwan.
Vincent Lin, TCI's chairman said in a press release, "Manufacturers have a clear role to play. It's not just about cost saving, it's about creating a cleaner world for our customers and their families."
Industry as policymaker
While reducing energy is fine, we really need to see companies investing in producing renewable energy.
Right now, the obligation to generate power falls on utilities, in the case of Taiwan that is Taipower, which has so far demonstrated limited enthusiasm for developing renewables.
Building new renewable energy sites, such as Google has done with wind farms, costs more up front but pays for itself over time, in some cases allowing the company to sell power back to the grid.
ACER opened a 2.4 MW solar plant in Taoyuan last year, and while this is a good start, more companies need to get involved to really make a difference. These types of private-led actions will help drive down costs and speed up adoption.
All of these commitments mean nothing if a company can get away with claiming to have met its targets without taking meaningful action to change their core products and practices. Indeed, some have accused initiatives like RE100 of being merely greenwashing.
But consumer perceptions shape these trends. Think critically about all these goals, but keep in mind that without growing public concern around climate change, these companies would do nothing.
Instead, these industrial giants have started to act, some for self-interest against increased regulation, others due to corporate culture, some for the marketing kudos, and others because they believe it is the right thing to do.
Whatever the reason, at the very least these companies are making large public investments and donations into renewable energy. We need a global energy transition and this is the first meaningful step. You, the consumer, do matter.
Companies are listening, perhaps more attentively than government, to your beliefs and preferences. The cost of transitioning their electricity to renewables takes time and resources, especially for companies situated in primarily fossil fuel locations like Taiwan. Placing cynicism aside, there is hope.
Editor: David Green