Transitioning to biofuels in Taiwan

The island nation of Taiwan, just off the coast of China (and therein lies a whole other problem) is blessed with some of the windiest places on Earth and consequently, the shallow sea between Mainland China and Taiwan has seen a flurry of windfarm developments over the past eight years.
Taiwan has plenty of sun too: located right on the Tropic of Cancer, it is ideally suited to explore both these bountiful resources. Indeed: Taiwan is planning to harvest these energy sources on a massive scale.
Taiwan is a study in contrast. On the one hand, it is a highly developed, resilient, and confident democracy that prides itself on its innovative and industrious supply-chain economy. But Taiwan is also a conflicted nation, unsure of its own identity and doubtful about its rights to manifest its own destiny.
The ambiguous “don’t ask, don’t tell” policy with regards to Taiwan’s identity and political status have left the island with a strange myopic vision for its green energy future as well: there is a definite tendency to focus inward and ignore the looming threats from the outside. That “outside” view is not pretty: Taiwan relies on imports for more than 97.73 percent of its energy needs, meaning a relatively simple naval blockade by China would shut the nation down in a matter of days. No wonder the idea of domestically generated renewable power was hailed as a new green messiah.
Unfortunately, both solar and wind are generational undertakings, requiring a huge investment in infrastructure, both for capturing the energy (wind farms, solar farms) and distributing it (grid capacity and access, storage).
There are no time and money-saving shortcuts here; wind and sun will not save Taiwan tomorrow. Another problem with these renewable sources is that they create their own kind of dependency. That dependency is called “electricity.”
The government’s focus on electricity-generating alternative energy sources such as wind and PV will likely create a two-class system in the Taiwanese business world, with clear winners and losers: those who can afford the transition, and those who cannot.
The winners will be large and wealthier corporations, as well as SME that already rely on electricity for most of their manufacturing process. For them, the transition to green electricity will be easy.
Wealthy companies for whom brand equity is at stake, will gladly pay for the cost of greening to secure their reputation. SME who use only limited energy, or who operate only a small fossil-fuel powered equipment fleet, can easily manage the limited cost of new electric equipment, employee training and downtime from switching to new equipment.
The losers will be smaller SME who rely heavily on diesel and gasoline powered machines for which there is often no realistic electric alternative. Large-scale electric replacements - swapping out entire fleets – can be a budget-breaker for small enterprises. This is a problem for Taiwan.
Its SME keep the nation’s economic motor turning. There are over 1.63 million of them (as of 2022), accounting for more than 98 percent of the businesses in the country. There are other practical downsides to a myopic focus on electric only: Taiwan is prone to earthquakes and typhoons, and there are literally tens of thousands of irreplaceable emergency diesel generators.
Of course, there is an easy solution to all of this: renewable fuels. Transitional fuels like SAF and HVO can bridge the gap between mineral fuels and electricity, and these next-gen drop-in fuels are easy to use, not even requiring hardware conversion. But licensing a brand-new type of fuel in Taiwan turns out to be a Sisyphean task, like rolling a barrel of HVO up on the steep hill of government bureaucracy. HVO does not fall under any existing category of law, so there is no proper regulation for it. In typical Taiwanese fashion, these kinds of existential problems are often dealt with by simply ignoring them. The government’s influential Industry Development Bureau ‘s website contains a host of reports and articles on green energy and circular economy. Not one of them contains the words “Renewable Fuel.” It is easier to dream of hydrogen than it is to talk about HVO.
It is likely that a host of new regulations and punitive measures for users of traditional non-renewable energy sources will emerge – a knee-jerk reaction to a long period of green sky thinking and a lack of timely, decisive actions. The results of a long-term diet rich in promises and talk, but low on carrots and meaningful incentives, will lead to green punishment down the line.
But there is hope for Taiwan. A younger generation is breaking into mid- and high-level positions within the government. International enterprises are ramping up the pressure on their Taiwanese supply chain to implement meaningful ESG initiatives. And SAF – always on the front page at any given week – is paving the way for its cousin HVO.
Transitional fuels will prevail, because they can buy us time, the most precious commodity. They will allow the Taiwanese government time to finalise the massive infrastructure that is needed for a nationwide switch to renewable heat and electricity. In the meantime, let us keep the diesel machines rolling, and clean them up with green fuels.