New domestically developed technologies are opening the way for new business opportunities.
Once known for high pollution levels stemming from its rapid industrialization, Taiwan since the 1980s and 1990s has embarked on numerous campaigns to reduce the impact on the environment. Taiwan’s Green Mark Program, for example, certifies nearly 6,000 products and services in over 100 categories that have lower environmental impact and are thereforefavored for government procurement.
The greening of Taiwan’s industry is good for the environment. Taiwan firms are also noting it’s good for business, and Taiwan has established strong footholds in several green-technology industries (see https://topics.amcham.com.tw/2015/09/is-renewable-energy-the-way-forward-for-taiwan/). Robert Hu, Vice President and General Director of the Green Energy and Environment Research Lab at Taiwan’s premier research center, the Industrial Technology Research Institute (ITRI), says that Taiwan’s industrial base is strong enough to have a big impact in global green-tech sectors.
“The government’s major projects right now in solar PV and wind, and ICT communications in smart green energy, will lead to a lot of industrial change,” he says. “Given the total size of Taiwan’s industrial supply chain, a lot of area is covered.”
“Green Tech” is a catch-all term for an array of technologies that aim to mitigate or reverse the effects of human activity on the environment, either through more environmentally friendly manufacturing processes or supply chains, or through the use of renewable energies that are less harmful than conventional energy sources, such as fossil fuels.
The island has leveraged its strengths in semiconductor fabrication into related green-tech technologies, including solar photovoltaic (PV) cells and light-emitting diode (LED) lighting. Taiwan is already the world’s second largest manufacturer of solar cells and is also a leader in LED lighting, which is considered green tech by virtue of requiring less power than conventional incandescent lighting.
Taiwan’s Bureau of Energy estimates the island’s total market output of green energy at NT$488.4 billion dollars (US$16.3 billion) in 2014, and forecasts that the total output of green energy industry will reach NT$1 trillion (US$33 billion) by 2020.
Taiwan brings to the table its considerable experience and capacity in material science, semiconductors, and other IT segments, as well as its much-lauded process engineering that allows the island’s manufacturers to maintain their competitive edge despite stiff competition from China in solar PV and Korea in LED.
Another major plus for Taiwan is the effort and funding it has put into research and development in key technologies, often led by ITRI’s green energy labs.
The ButyFix case
In 2013, ITRI garnered three R&D100 Awards (often called the “Oscars of Invention”) from R&D Magazine. One of the awards was for ButyFix, the world’s first carbon-negative biofuel. Derived from cellulosic waste processed by genetically modified micro-organisms, the process generates bio-butanol in such a way that the carbon dioxide generated can be re-utilized internally, both effectively reducing carbon emissions and enhancing resource efficiency. The bio-butanol produced through the process, which is patented in the United States, Taiwan, and China, doesn’t compete with food crops, and the butanol contains one-third more energy per volume than other biofuels such as ethanol.
Further, while ethanol cannot be transported via pipelines as it contains water that causes corrosion, butanol has no such impurities, opening the option of transportation by pipeline. The technology can actually be retrofitted onto existing ethanol plants at relatively low expense.
For a biofuel such as ButyFix, however, the current low price of oil presents a serious obstacle. Instead of mass production, the answer may be small batch but high value production of another derivative of the process, butyric acid. Alex Tong, former head of the ITRI green energy labs and chairman of the Taiwan Green Cellulosity Corp., a private company that is being spun off by ITRI to commercialize the technology, estimates that butyric acid sells for some US$2,000 per ton, compared to only US$700 per ton for butanol. By concentrating on butyric acid, whose applications include use as food and perfume additives, the venture hopes to be able to offer good and fast returns for investors despite the challenging energy market.
Eventually Tong plans to take the technology for generating butanol biofuel international, emphasizing areas with high agricultural output, such as the United States, China, and Europe. He doubts he will produce butanol biofuel in Taiwan for the simple reason that “Taiwan just doesn’t have enough biomass.”
In 2014, ITRI won another R&D 100 Award, this time for a technology to reduce the environmental impact from the burning of fossils fuels such as coal, which are the readiest available energy sources for producing power, but also the biggest source of CO2 and other greenhouse gases. Efforts to address the problem through Carbon Capture and Storage (CCS) technologies have so far failed to overcome some major challenges. The primary impediment is cost. Current CCS technologies cost around US$50 per ton, which the power industry considers too high to be feasible. Another knotty problem is storage. Usually the CO2 is pumped underground, into depleted oil or gas fields, but concerns exist over the potential for leaks.
ITRI has offered an alternative with its “High-efficiency Calcium Looping Technology (HECLOT),” which uses limestone as a raw material. The process is able to reduce CO2 emissions out of the smokestack by 90% at far less cost than other methods. In coordination with the Taiwan Cement Co., ITRI has set up a pilot project at a 1.9MW (megawatt) power plant alongside one of the cement company’s factories. The liquefied CO2 is then used as an ingredient in the manufacture of cement, resulting in almost zero carbon emissions and zero waste.
Market research firm Plunkett Research calculates that the green-tech sector represents “about 5% of global GDP for 2015, or approximately US$3.75 trillion,” while Bloomberg New Energy Finance (BNEF) estimates global investment in renewable energies in 2014 at US$310 billion, a 20% rise over 2013’s US$254 billion.
Taiwan’s continuing technological advances should position it for an even larger slice of the pie.