To foster the healthy growth of the green electricity sector, the Land Bank of Taiwan, in collaboration with Natural Power Company Ltd., launched the “Green Electricity Payment Trust” service in June 2024. This initiative is designed to create a reliable transaction mechanism between power generation, electricity sales, and purchasing entities, significantly mitigating the transactional risks associated with green electricity.
Amid escalating global climate challenges, over 130 nations, including Taiwan, are committed to achieving a Net Zero carbon emissions target by 2050. Major global tech companies are striving for 100% reliance on renewable energy as part of the RE100 initiative, prompting Taiwanese supply chain partners to enhance their use of green electricity.
To align with the Net Zero ambition and meet the surging demand for green electricity, the Ministry of Economic Affairs (MOEA) has implemented the Taiwan Renewable Energy Certificate (T-REC) and a green electricity trading platform within the bundled REC system. Furthermore, the MOEA recently allowed the transfer of electricity from second and third type solar power plants to renewable energy providers, who in turn can sell it to enterprise clients. By May of this year, 65 renewable energy electricity providers have secured permits from the Ministry of Economic Affairs.
Aligning with the emerging trends of the green electricity market, the financial sector is stepping up to meet the demands of environmentally conscious practices advocated by the Financial Supervisory Commission’s Green Finance Action Plan. Therefore, the sector is expanding its offerings of green financial products and services to support enterprises involved in power generation and electricity sales. As part of this initiative, the Land Bank of Taiwan, in collaboration with Natural Power Company Ltd., rolled out the “Green Electricity Payment Trust” in early 2024. Natural Power Company, a renewable energy electricity provider approved by the MOEA, has been offering professional services in green electricity investment, development, supply, and advisory services to enterprises since its establishment. Their primary clientele consists of companies with self-imposed carbon reduction goals.
To ensure the secure transaction of funds generated from green electricity sales between power generation, electricity sales, and electricity purchasing entities, the Land Bank provides the “Green Electricity Payment Trust” mechanism. Under this mechanism, electricity purchasers remit the electricity fees into a dedicated trust account managed by the Land Bank. The Land Bank first verifies the actual electricity consumption and payment amount of the users and compares it with the consumption details provided by the electricity sellers. Once verified, the Land Bank disburses the electricity sales revenue to the power generation and electricity sales entities. This ensures that the trust funds are used exclusively for their intended purpose, allowing for clear accounting and transparent cash flows among the three parties involved in green electricity transactions, thereby reducing transaction risks.
This year, the Land Bank is concentrating on advancing green finance and promoting sustainable prosperity. In April 2024, the Land Bank successfully issued a 1 billion NTD Sustainable Development Bond, with all funds raised for green investments and social impact initiatives. Additionally, at the end of April, the Land Bank Nankang Branch's High-Efficiency Chiller System Project received approval from the Ministry of Environment. This approval marks the Land Bank as the first financial institution in Taiwan to institute a voluntary greenhouse gas reduction program. Underscoring our commitment to environmental stewardship and sustainable business practices. The Land Bank will continue to guide corporate partners and individual customers towards sustainable goals, creating an ecosystem where banking, society, and the environment thrive together.
Contact: San-Chao Hung
Tel.: 02-2348-3938
