In response to global climate change and to strive for environmental protection, more than 130 countries have declared their intention or plans to achieve carbon-neutrality by 2050. International companies have also jumped on the bandwagon of a net-zero carbon transformation and are gradually asking suppliers to reduce their carbon emissions. Driven from the top by policymakers and multinationals on a global scale, net-zero carbon transformation has become an important issue that companies cannot afford to ignore. 

Small-and-medium enterprises (SMEs), which are limited in access to information and resources, require more government guidance and support in order to keep up with the net-zero carbon trend. Many countries have invested resources to assist SMEs to comply with the net-zero carbon trend in terms of the carbon footprint and company management of manufacturing process, equipment and products, so that SMEs have adequate net-zero carbon literacy and capability. This can serve as a template for Taiwan’s policymaking.

Japan

SMEs are encouraged to participate in energy efficiency activities

To cope with climate change, the Tokyo Metropolitan Government has introduced a Cap-and-Trade control mechanism on the total emissions from large factories and offices. In addition, the government has established a Carbon emission reporting system for SMEs to encourage local SMEs to report their carbon emission data. This helps the government to analyze emissions and drive policies for energy efficiency which it can gradually advocate to other local governments. The Tokyo government requires any SME factory or business premises that used between 30 and 1,500 kiloliters in crude oil equivalent (COE) of energy (including electricity, fuel and for other purposes) during the prior year to report the energy-saving measures taken for the prevention of global warming. There are specific requirements for companies that consume more than 1,500 kiloliters COE of energy. 

Whilst SMEs in Japan are not required to participate in the Tokyo Cap-and-Trade Program, the Tokyo government reviews the potential energy efficiency of SMEs and provides relevant incentives for energy consumption reduction. The SMEs meeting the mechanism and reporting requirements stipulated by the government can receive business income tax incentives and low interest loans for investment in energy efficient equipment. The carbon reductions achieved by SMEs can be converted into credits that can be sold in the Tokyo emission trading scheme. This mechanism aims to attract the involvement of SMEs.

U.K.

One-stop services
Offering of incentives and resources

In May 2021, the campaign “Together for our Planet Business Climate Leaders” was launched in the U.K. calling for SMEs to sign up to the 2050 net zero target. The initiative aimed to encourage SMEs to make a commitment, and it established a platform providing carbon reduction related information and resources to assist SMEs that were willing to commit to achieving this goal together.

In the U.K., 99% of companies are SMEs. The U.K. government hopes these companies will take concrete measures to reduce their greenhouse gas emissions and carbon footprints in order to protect the earth. This initiative was started in advance of the 26th UN Climate Change Conference of the Parties (COP 26) in Glasgow in November 2021. The SME Climate Hub offers one-stop-shop services to SMEs dedicated to climate action. The primary purpose is to provide SMEs with incentives and resources to make carbon emissions reductions more easily than at any time in the past, so that innovative green solutions can be introduced to the market and enterprise resilience can be strengthened.

European Union

DigiCirc, an innovative matchmaking platform
Brainstorming to achieve a sustainable economy

With funding from the European Union's Horizon 2020 research and innovation program, DigiCirc was established as an innovative matchmaking platform to encourage SMEs and startups in Europe to tackle different challenges to achieve a sustainable economy through the development of innovative solutions. DigiCirc, as an accelerator, will assist in the commercialization of these solutions. The three thematic areas this year are circular cities, bioeconomy, and blue economy. Zero emissions are one of the subthemes under circular cities.

The European Union is committed to introducing the concept of the circular economy into SMEs and startups, so that the recycling of materials continues in a loop. To achieve the circular economy, the platform promotes four digital tools: (1) circular economy data hub to provide open data on environmental protection and the sustainable economy, energy emissions and carbon emissions from governments in different countries; (2) matchmaking platform for identification of and connection with future business partners and potential customers; (3) industrial symbiosis platform to enable companies, public agencies and research institutions to assist and cooperate with each other. This process reduces energy wastage, enhances efficiency and promotes the sharing of industrial resources, so that waste becomes a resource to achieve resource sustainability; (4) InfoPortal for access to knowledge in relation to the ecosystem of the circular economy, such as investment opportunities, regulatory environments, market trends and technological progression. In addition to these four digital tools, DigiCirc also provides one-on-one business consultation and expert guidance on specific topics.

In sum, some countries provide carbon reduction guidance, digital calculation tools, consultation support and equipment subsidies to assist companies in the transformation process. Other countries offer green label accreditation, subsidies and insurance mechanisms to encourage SMEs to participate in energy efficiency and carbon reduction activities. The Taiwan government has also initiated relevant measures. That said, SMEs have limited access to information and resources, and so they should proactively pursue forward deployment in zero-carbon related issues with help of courses, carbon reduction tools and subsidies, in order to capitalize on the opportunities for innovation in the zero-carbon transformation.