In a linear economy, the excessive consumption of resources makes the economic development and the ecological environment unsustainable. Under the circumstances, Taiwan, which is highly populated and heavily depends on imported resources, has not only been put at great risk, but also faces a key challenge towards sustainable development.
Taiwan has undoubtedly played a pivotal role in the global supply chain. The nation is not only the leader of the international IC industry with approximately total value of 20 billion USD, but also an important R&D and production base for the textile industry. Many Taiwanese manufacturers of precision machining industry are the invisible champions behind various international brands. However, the pride of "made in Taiwan" is supported by tens of thousands of imported resources and has become a major concern.
The IC industry is not only one of the most important
industries of Taiwan, it also supports
the global electronics industry supply chains.
Taiwan's textile industry transforms marine waste and recycled PET bottles into recycled textile materials for sports shoes and jerseys through innovative technology.
(via adidas Originals, Nike)
Tesla's electric cars use components from Taiwan
(via Tesla Motors)
Taiwan, which lacks mineral resources, must improve the resource efficiency and cyclical use rate through the transformation of circular economy. By developing new business models, moving from product sales to service provision and creating service-oriented added value, Taiwan is able to reduce dependence on imported resources and consequently moves away from the cost-cutting competition between the OEMs. The transition not only creates positive environmental impacts, it caters to the global green supply chain as well.
President Tsai Ing-wen referred circular economy as the key to Taiwan’s future prosperity during her inaugural address in 2016. It is the goal that Taiwan must strive for in transforming its economic structure. It is necessary to change existing consumption and production patterns and reduce the consumption of natural resources, to ensure future generations will enjoy the same resources.
President Tsai Ing-wen during inaugural speech
(via Office of the President Republic of China (Taiwan))
“We must not endlessly expend natural resources and the health of our citizens as we have done in the past. Therefore, we will strictly monitor and control all sources of pollution. We will also bring Taiwan into an age of circular economy, turning waste into renewable resources. We will gradually adjust our energy options based on the concepts of sustainability. The new administration will seriously address issues related to climate change, land conservation and disaster prevention. After all, we only have one earth, and we only have one Taiwan.”
The government has also incorporated the circular economy into major policy guidelines and proposed the “Five Plus Two Innovative Industries Plan” to declare Taiwan's determination to move toward a circular economy. At the same time, more and more businesses are thinking about how to apply circular economy practices to their business and increase the added value of products to enhance their competitiveness. In 2018, Taipei City proposed Taiwan's first Circular Taipei 2018-2022 White Paper, hoping to make Taipei the first circular city in Taiwan and to be geared to international standards. With the development of circular economy in Taiwan, we have also listed the important process of circular economy in Taiwan, giving readers a clear picture of the current progress and the direction of future development.
Five Plus Two Innovative Industries Plan
In order to accelerate economic development and economic transformation, the government proposed the “Five Plus Two Innovative Industries Plan” as the core of future industrial policies. "Five Plus Two" refers to the five major industries—Asia Silicon Valley, green energy, biomedicine, intelligent machinery, national defense and aerospace, and two transformation strategies—the circular economy and new agriculture.
The circular economy and new agriculture in the “plus two” are not specific industries, but the strategies and models that each industry can adopt. The circular economy allows resources and products to be retained in the system with high value, while new agriculture aims to produce the raw materials needed for industries through bio-refining and cascading use.
If the five major industries continue to develop based on a “take-make-consume-dispose” pattern of the linear economy, heavily rely on imported resources and price-cutting strategies of OEM, they will still encounter difficulties and bottlenecks caused by the linear economy. Therefore, the Government has attempted to bring "circular economy" and "new agriculture" into the five major industries. In addition to accelerating the upgrading of the five major industries in the short term, the government also hopes to promote the transformation and re-engineering of various industries in the long run, and to bring more innovative and sustainable industries into being.
Five Plus Two Innovative Industries Plan
(made by Taiwan CE Network)
Ministry of Economic Affairs
As the main authority of Taiwan's industrial policy, the Industrial Development Bureau under the Ministry of Economic Affairs is responsible for supervising factories and industrial parks throughout Taiwan, including the disposal and management of business waste. Since the circular economy is closely related to industrial activities and transformation, the Ministry of Economic Affairs has also been assigned to co-ordinate relevant policies of various ministries.
The Ministry of Economic Affairs of the Executive Yuan issued Circular Economy Promotion Plan in 2018. The plan aims to eliminate the obstacles on the path to sustainable industrial development through cross-sectoral integration. It consists of four strategies, which include advancing circular technology and materials innovation R&D zones, building circular economy demonstration parks, promoting green consumption and trading, and accelerating energy resources integration and industrial symbiosis.
Materials and metals industry is the focus of the plan. By fostering circular economy talent in the industry, Taiwan is able to create new momentum to transform industrial development from a linear economy to a circular economy.
If the by-product of the A plant can become the raw material of the B plant, there will be no problem of waste generation. Building such a resource exchange mechanism in the industrial parks is an important way to practice the circular economy. The Kaohsiung Linhai Industrial Park integrates 14 manufacturers and is the most successful case in Taiwan.
The Industrial Development Bureau, which is responsible for the management of more than 60 industrial parks across Taiwan, has also planned three pilot projects. The New Materials Circular Industrial Park, which is expected to be established in Kaohsiung, will also evaluate the types of manufacturers and infrastructures to be built in under the concept of industrial symbiosis.
In addition to the exchanges in the industrial parks, the Industrial Development Bureau has also launched an energy and resources marketplace（能資源整合資訊平台）, enabling all manufacturers to record their supply and demand of by-products and exchange resources on this platform.
How resource exchange works in Kaohsiung Linhai Industrial Park
(via Industrial Development Bureau, R.O.C.)
The Industrial Technology Research Institute (ITRI) under the Ministry of Economic Affairs is an important research institution of Taiwan’s industry. Echoing the government's Five Plus Two Innovative Industries Plan, the ITRI also initiated a Circular Economy Strategy Office to integrate the inter-disciplinary expertise within the institute and provide the manufacturers with the technical support necessary for the transformation to circular economy.
Material Flow Cost Accounting (MFCA)
Since 2015, the Industrial Development Bureau has been promoting Material Flow Cost Accounting (MFCA). The management tool is used to assist manufacturers in quantitative analysis and optimization of all aspects of the production line, which could lead to improving resource efficiency and reducing ecological footprint.
Environmental Protection Administration
In order to promote the circular economy, the Environmental Protection Administration (EPA) has formulated the resource recovery strategy in line with EU indicators, with reference to relevant policies of the EU and the Netherlands. To achieve the target by 2020, the strategies put focus on four aspects including "production", "consumption", "waste management", and "market for secondary raw materials" with the goal of improving resource efficiency and minimizing waste. The resource recovery strategy focus not only on the optimization of a single aspect, but on systemic changes. From production to consumption, consumption to recycling, each aspect is closely linked to one another.
Under the framework of the resource recovery strategy, the recycling rate that was valued in the past is no longer the main indicator of resource utilization. One reason is that recycling takes place during the end-of-life (EOL) stage of product life cycle. Many other practices can be taken before products become obsolete, such as improving resource utilization and reducing resource waste from better design and manufacturing process. On the other hand, recycling rate does not indicate the quality of recycled materials or where they go. More focus should be put on whether recycled materials retain its value and whether they re-enter the manufacturing process instead of ending up in landfills. Therefore, the resource efficiency and cyclical use rate are also crucial evaluation standards besides recycling rate.
The resource recovery strategy framework
(via Environmental Protection Administration, R.O.C.)
In order to promote green growth, the Dutch government has launched the Green Deal to eliminate obstacles on the road to economic transformation and create a friendly environment suitable for circular economy through the cooperation of the central government, local governments, enterprises and civil society. Taiwan’s industries followed suit and have organized three alliances, which are the "Circular Economy Alliance of Ocean Plastic Waste", the "Green Electronic Resources Alliance" and the "Taiwan Construction Resources Circulation Alliance". The Taiwan version of Green Deal is being developed jointly by the alliances and the EPA. The Green Deal is committed to strengthening cooperation between the industries and the public and private sectors, in the hope of accelerating Taiwan's economic transformation.
Resource Recycling Fund
In 1998, the EPA set up the Resource Recycling Fund. In accordance with Extended Producer Responsibility, manufacturers or importers are required to pay fees as a recycling fund to support recycling companies. In order to establish a sound recycling system, producers also bear the environmental external costs incurred by the products during the process of manufacturing, producing and importing.
Sustainable Development Goals
Sustainable Development Goals (SDGs) are the 17 goals that were set by the UN General Assembly at the end of 2015 and are expected to be reached by 2030. They are regarded as guidelines and benchmarks for the sustainable process. The UNEP study points out that the advancement of 10 sustainable development goals depends on the improvement of resource use efficiency and calls for decoupling economic growth from natural resource consumption and environmental impacts.
In a linear economy, economic growth depends on the amount of resources invested. On the contrary, the circular economy puts emphasis on the improvement of resource use efficiency. The economic growth is no longer equal to the amount of resources invested, alleviating the perpetual problem of the compatibility between economic growth and environmental sustainability. The circular economy has also echoed 10 sustainable development goals, pushing economic development from a large amount of resource consumption to a more sustainable development.
In accordance with the UN Sustainable Development Goals, the Executive Yuan released a draft of sustainable development goals of Taiwan in 2017. Taiwan Circular Economy Network also has published a report on the sustainability progress of Taiwan, Towards Sustainable Development 2030—A Report on Current Sustainability Progress of Taiwan. The report provides a holistic view on Taiwan's social, economic and environmental progress, which could also serve as a reference for policy-making.
UN Sustainable Development Goals
(via the United Nations)