The Internal Carbon Pricing Mechanism at Chunghwa Telecom
To meet its SBTi net-zero commitment and targets for "Net Zero by 2045," Chunghwa Telecom has been a pioneer in the telecom industry of Taiwan to implement the "internal carbon fee" system starting from 2022. The cost of carbon emissions is internalized, encouraging departments with financial incentives to take actions for energy conservation and carbon reduction. Through the internal carbon pricing mechanism, the allocation of resources towards low-carbon innovation is further strengthened. Climate change is factored in the strategic and financial planning decisions as well.
The Internal Carbon Pricing of Chunghwa Telecom at a Glance
| Item | Description |
|---|---|
| Carbon Pricing Type | Internal Carbon Fee |
| Price of Carbon Fee |
Set in accordance with renewable energy market pricing and global trends NT$1,600 / tonne CO₂e (around US$ 53) |
| GHG Scope Covered | Scope 1/ Scope 2/ Scope 3 (waste generated in operations) |
| Applicable Scope | Applicable to business decisions of all departments |
| Fund Utilization | The "Internal Carbon Fee Fund" is established primarily for annual carbon reduction initiatives and various environmental innovation projects. |
Objectives for carbon pricing
The implementation of an internal carbon fee aims to fulfill the SBTi carbon reduction pathway and strengthen the strategic and financial integration for climate:
- • Driving Internal Energy Efficiency Improvements: Internalizing carbon emissions as a cost boosts the momentum for energy conservation, enabling business units to proactively invest in energy-saving initiatives to minimize carbon fee expenditures, thus improving energy use efficiency.
- • Encouraging the Integration of Carbon Costs and Climate Risk Factors into Decision-Making: Since the internal carbon fee mechanism has an impact on departmental profit and loss, it prompts all business units to factor in carbon emissions and climate risks in their strategies and planning.
- • Identifying and seizing low-carbon transition investment opportunities.
- • Responding to domestic/international carbon pricing and climate information disclosure requirements.
- • Assisting in achieving the carbon neutrality goals and SBTi decarbonization pathways of the Company.
- • Strengthening the integration of climate considerations into the corporate strategy and financial planning.
Utilization of the Internal Carbon Fee Fund
| Application | Description |
|---|---|
| Annual Carbon Reduction of Institutions | Subsidies and rewards are granted based on the actual annual carbon reduction achievements of respective institutions. |
| Environmental Innovation Projects | Driven by innovation and oriented toward outcomes, the initiative encourages innovative proposals covering low carbon, energy efficiency, renewable energy, and environmental friendliness, with subsidies and rewards allocated based on the carbon reduction performance and biodiversity benefits of each project. |
Implementation Results
- • Cumulative approved low-carbon and energy-efficiency proposals: 175
- • Carbon reduction performance: Approximately 150,000 metric tons of CO₂e
- • Exceeded SBTi-validated targets for 3 consecutive years