Taiwan Environment Minister Eyes Insurance Funds to Help with Green Transition

Peng Chiming, the Environment Minister, said that Taiwan hopes to receive more than $1 billion from insurance funds in order to finance its green energy transition and reduce carbon emissions as part of climate change goals.

Taiwan is eager to prove that it's a responsible international member and has been ahead of the curve when it comes to tackling this issue.

Taiwan is not an official member of the U.N. due to China's objections, which see the island as their own territory. It is also not a signatory of the Paris Climate Agreement.

Last month, Taiwan's President Lai Ching Te announced a new and more ambitious goal for carbon emissions reduction. He wants to reduce greenhouse gas emission levels by 26-30% by 2030 compared with 2005. Prior to this, the target was set at 23% to 25%.

Peng said this week, in a speech at his ministry near Taiwan’s presidential office, that Energy Service Companies, or ESCOs (or Energy Service Companies), which design, build, and arrange financing of energy-saving schemes are an attractive investment.

The Environment Ministry, together with the Economy Minister and Taiwan's Financial Supervisory Commission have formed a group to channel funds out of the insurance industry towards ESCOs.

The first phase of investment will be T$10 billion (304.92 millions), and the second phase will increase to T$50 trillion ($1.52 billion). Peng is a weathercaster with a PhD in atmospheric sciences.

He added that ESCOs are a good investment for the insurance sector, as they can offer stable returns over a long period of time.

Taiwan has invested in wind and solar projects, and is moving away from coal-fired stations.

Peng stated that climate change was a serious issue in subtropical Taiwan, which faced more heat waves, stronger storms and intense droughts.

Taiwan had its hottest ever year in 2024. In 2021, Taiwan suffered its worst drought for half a century. This was after the island did not receive any typhoons the year before to replenish the island's reservoirs.

Peng stated that drought was a serious threat to countries in our latitude. Peng said that although we are resilient enough to handle it for the time being, we cannot rule out more extreme situations.

(source: Reuters)