GHG Inventory, Carbon Footprint and SBTi: Differences, Standards and Taiwan's Latest Rules
What Are a GHG Inventory, a Carbon Footprint and SBTi?
A greenhouse gas (GHG) inventory (organizational GHG inventory) calculates how much greenhouse gas "one company emits in one year," directly and indirectly, classified into Scope 1, 2 and 3; the international standards are ISO 14064-1:2018 and the GHG Protocol. A product carbon footprint calculates the life-cycle emissions of "one product or service," from raw materials, manufacturing and transport to use and disposal; the standard is ISO 14067:2018. SBTi (the Science Based Targets initiative) has a third party validate whether a company's emissions reduction targets are aligned with the Paris Agreement's 1.5°C pathway. Put simply: an inventory is "weighing yourself," a carbon footprint is "counting the calories in each meal," and SBTi is "setting a weight-loss goal and having a third party certify it." In Taiwan, regulatory reporting, the carbon fee and disclosure by listed companies rely on the GHG inventory; customer supply chain requirements, carbon labels and the EU CBAM rely on the product carbon footprint; SBTi is a voluntary international initiative, but it has become a mainstream requirement in brand supply chains.
How Is a GHG Inventory Different from a Carbon Footprint?
| Comparison | GHG inventory (organizational) | Carbon footprint (product) |
|---|---|---|
| Subject | Company, site, group | A single product or service (e.g., per 1 kg of product) |
| Time frame | One year, usually the calendar year | Product life cycle: cradle-to-gate or cradle-to-grave |
| Boundary | Organizational boundary + Scope 1, 2 and 3 | Raw material acquisition, manufacturing, distribution, use, disposal |
| Main standards | ISO 14064-1:2018、GHG Protocol Corporate／Scope 2／Scope 3 | ISO 14067:2018, PAS 2050:2011, GHG Protocol Product Standard, Taiwan product category rules (PCR) |
| Main uses | Ministry of Environment reporting, carbon fee, FSC disclosure, sustainability reports, CDP, SBTi base year | Customer supply chain requirements, product carbon labels, CBAM embedded emissions, green procurement |
| Verification | ISO 14064-3 verification, or CPA assurance | Verified under ISO 14067; Taiwan labels must be verified by a verification body accredited by the Ministry of Environment |
The two support each other: Scope 3 in an inventory often needs suppliers' product carbon footprint data, and the manufacturing stage of a product carbon footprint is often drawn from the factory's inventory data. Most companies do the inventory first, then calculate carbon footprints for key products.
What Are Scope 1, 2 and 3?
Direct emissions: fuel for boilers and generators, processes, refrigerant leakage, company-owned vehicles. Corresponds to ISO 14064-1 Category 1.
Energy indirect emissions from purchased electricity, heat and steam; both the location-based and market-based methods must be disclosed. Corresponds to Category 2.
Other indirect emissions across the value chain, in 15 categories, such as purchased goods, transportation, employee commuting, and use and disposal of products. Corresponds to Categories 3–6.
Standards update : in July 2026, the GHG Protocol and ISO announced that they will merge their corporate inventory standards (including ISO 14064-1) into a single joint standard, with public consultation expected in Q2 2027 and publication in Q4 2028. Until the new standard takes effect, companies should continue to use ISO 14064-1:2018 and the current GHG Protocol, which also remain the basis for verification in Taiwan and Ministry of Environment registration.
Is My Company Required to Do a GHG Inventory?
Under the Climate Change Response Act and Ministry of Environment announcements, the following three situations are mandatory:
| Who | Obligation | Deadline |
|---|---|---|
| Emission sources required to inventory, register and be verified: power generation, steel, oil refining, cement, semiconductors, display panels and similar industries, plus manufacturers with annual emissions (direct + purchased electricity) of 25,000 tonnes CO2e or more | Inventory, registration, and verification by a verification body accredited by the Ministry of Environment | Register the previous year's emissions by April 30 each year; upload the verification report by October 31 |
| Expanded coverage from 2026: service businesses with high electricity or oil use, transportation companies, hospitals, universities and colleges, department stores, shopping malls, convenience store chains, and manufacturers with smaller emissions | Inventory and registration only; no verification, no carbon fee | Register by April 30 each year |
| Listed companies | Disclose inventory information under the FSC sustainable development roadmap for listed companies and progressively obtain assurance | Phased by paid-in capital |
In September 2026, the FSC and the Ministry of Environment jointly amended the rules: the threshold for mandatory application of the IFRS sustainability disclosure standards was changed to paid-in capital of NT$2 billion or more (plus companies subject to the Ministry of Environment's inventory and verification requirements, about 560 companies in total); phase 2 and 3 companies no longer need to obtain assurance on the parent company's standalone Scope 1 and 2, and instead disclose at the consolidated level; Scope 3 disclosure for phase 3 is temporarily exempted. Companies below the threshold must still disclose climate governance, risk management, and Scope 1 and 2 emissions.
Companies not on the lists above have no legal obligation, but often need to do an inventory anyway because of requirements from international brands, financial institutions or government procurement.
How Is Taiwan's Carbon Fee Calculated, and Who Has to Pay?
The carbon fee is levied on electricity and gas suppliers and manufacturers with annual emissions (direct emissions + indirect emissions from electricity use) of 25,000 tonnes CO2e or more, with charges accruing from 2025. Fees on 2025 emissions were paid for the first time in May 2026: 240 companies with 461 facilities paid about NT$4.97 billion.
| Item | Details |
|---|---|
| Formula | Carbon fee = (annual emissions − 25,000 tonnes) × emissions adjustment factor × rate |
| Standard rate | NT$300 per tonne |
| Preferential rate B | NT$100 per tonne, for voluntary reduction plans that meet the technology benchmark's designated reduction rate |
| Preferential rate A | NT$50 per tonne, for meeting the industry-specific designated reduction rate (2020 baseline, 2030 target: steel 25.2%, cement 22.3%, other industries 42%) |
| High carbon leakage risk | For designated entities, chargeable emissions are multiplied by an adjustment factor (0.2 in the first period, rising in each later period), but the 25,000 tonnes are not deducted |
| Offsets | Domestic reduction credits can offset up to 10%; international carbon credits must be recognized by the Ministry of Environment and can offset up to 5% |
Latest developments : a September 2026 amendment gives newly covered businesses a one-year grace period; the carbon fee rate review committee discussed in early November 2026 whether to adjust the rates, and no decision has been made. The latest Ministry of Environment announcement prevails for rates.
How Do You Calculate a Product Carbon Footprint, and How Does CBAM Affect It?
ISO 14067:2018 is the mainstream standard; PAS 2050:2011 and the GHG Protocol Product Standard are also used. First define the functional unit and life-cycle boundary according to the product category rules (PCR), then collect activity data and emission factors to calculate.
In March 2025, the Ministry of Environment issued the Regulations for Voluntary Product Carbon Footprint Approval, Labeling and Management: applications are voluntary, products must be verified by an accredited verification body, and approval is valid for 2 years; where no applicable PCR exists, one must be proposed first; there is also a "carbon reduction label."
The definitive period began on January 1, 2026, covering cement, steel, aluminum, fertilizers, electricity and hydrogen. EU importers must buy CBAM certificates for the embedded emissions of their products (sales begin in February 2027; for 2026, declaration and surrender are due by September 30, 2027); annual imports of 50 tonnes or less are exempt.
Product embedded emissions data calculated using the CBAM methodology and verified; otherwise, higher default values may be applied. An EU amendment to extend coverage to downstream products is still under negotiation.
What Is SBTi, and Is It Mandatory?
SBTi (Science Based Targets initiative) was founded as a partnership of CDP, the UN Global Compact, WRI, WWF and others, and its validation work is carried out by SBTi Services. It is not a regulation but a voluntary international initiative; however, more than 11,000 companies worldwide have set or had science-based targets validated, and international brands often ask suppliers to follow. Note that SBTi is not a condition for Taiwan's preferential carbon fee rates; preferential rates are reviewed against the Ministry of Environment's designated reduction rates.
Key Points of the Current Criteria (for Submissions in 2026–2027)
| Item | Requirement |
|---|---|
| Near-term targets | 5–10 years from submission |
| Scope 1 + 2 | Aligned with 1.5°C; under the absolute contraction approach, at least about 4.2% reduction per year, covering 95% or more of emissions |
| Scope 3 | A target is required when Scope 3 is 40% or more of total emissions, covering at least 67% of Scope 3 emissions |
| Net-zero targets | Net zero by 2050 at the latest; after reducing emissions by 90% or more, residual emissions are neutralized through permanent removals |
| FLAG | Companies in forest, land and agriculture-related sectors, or with FLAG emissions of 20% or more, must set separate FLAG targets and a zero-deforestation commitment |
What Changes in the SBTi Corporate Net-Zero Standard V2.0?
V2.0 was published on June 11, 2026 and takes effect on January 31, 2027; submissions under the new version are possible from Q1 2027, and all new submissions after January 31, 2028 must use V2.0. For companies setting or updating targets in 2026–2027, SBTi recommends submitting under the current versions (V1.3.1/V5.3) first.
- The separate SME route is removed and replaced by Category A (large and medium companies, and companies in high-income countries) and Category B
- Separate targets for Scope 1 and Scope 2; for Scope 2, companies can choose an emissions target or a low-carbon electricity alignment target
- Scope 3 moves to a materiality principle: every category accounting for 5% or more must be covered
- Category A companies must obtain limited assurance and support carbon removals from 2035
- Stronger governance requirements, including board accountability, transition plans and disclosure
What Are the SBTi Application Process and Fees?
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Internal approval or commitment
Confirm whether to set near-term targets, net-zero targets, or both.
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Complete the inventory and set a base year
Inventory Scope 1, 2 and 3 under the GHG Protocol and screen for material Scope 3 categories.
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Design the targets
Set targets using the methods allowed by the criteria, such as the absolute contraction approach or the sectoral decarbonization approach.
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Submit for validation
Submit and pay through the SBTi Services validation platform. The official review time is 30 working days for near-term targets and 60 working days for net-zero targets (counted from the start of review); in practice, add queuing time.
-
Publish and track
Once validated, targets are published on the SBTi Target Dashboard, and progress is disclosed every year afterward.
| Validation service | Annual revenue up to EUR 250 million | EUR 250 million–1 billion | EUR 1–10 billion | Above EUR 10 billion |
|---|---|---|---|---|
| Near-term targets | US$13,000 | US$16,000 | US$21,000 | US$26,000 |
| Net-zero targets | US$11,000 | US$12,000 | US$15,000 | US$18,000 |
| Near-term + net-zero | US$17,000 | US$20,000 | US$27,000 | US$34,000 |
The above are SBTi Services prices effective January 5, 2026; the SME route has lower fees (US$1,250–2,000 for near-term targets). With V2.0 removing the SME route, prices may change; check the SBTi Services website for current figures. Inventory and consulting fees are separate.
Where Should a Company Start?
-
Determine your status and obligations
Are you subject to the Ministry of Environment's inventory requirements? Do your annual emissions reach 25,000 tonnes? Are you a listed company? Do you export CBAM products? Do customers require SBTi or product carbon footprints?
-
Organizational GHG inventory
Set the boundary and base year under ISO 14064-1:2018/GHG Protocol; complete Scope 1 and 2 first, then screen for material Scope 3 categories.
-
Third-party verification or assurance
Regulated entities are verified by a verification body accredited by the Ministry of Environment; listed companies follow FSC rules.
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Set targets
On the regulatory side, a voluntary reduction plan under the carbon fee; internationally, SBTi.
-
Implement decarbonization
Energy efficiency, process and fuel switching, renewable energy and supply chain engagement; consider carbon credits or carbon removals only for residual emissions.
-
Product carbon footprint and disclosure
Calculate key products under ISO 14067; each year, complete Ministry of Environment registration, the sustainability chapter of the annual report, the sustainability report and SBTi progress disclosure.
Natural Capital: What Are TNFD and SBTN?
Beyond carbon, companies are also starting to assess their dependencies and impacts on nature. TNFD (Taskforce on Nature-related Financial Disclosures) uses the LEAP approach (Locate, Evaluate, Assess, Prepare) to help companies identify nature-related risks, and in 2026 handed its work over to the ISSB; in October 2026 the ISSB published an exposure draft on nature-related disclosures, with comments due February 19, 2027. SBTN (Science Based Targets Network) extends the SBTi approach to freshwater, land, oceans and biodiversity, and published Science-Based Targets for Nature 2.0 in October 2026.
Further reading: " What Are Biochar and Carbon Credits?".
GHG Inventory, Carbon Footprint and SBTi FAQ
What is the difference between a GHG inventory and a carbon footprint?
A GHG inventory calculates "how much a company emits in a year," scoped by organization and year, divided into Scope 1, 2 and 3, under ISO 14064-1 and the GHG Protocol. A carbon footprint calculates "how much one product emits from cradle to grave," under ISO 14067. Regulatory reporting, the carbon fee and SBTi use the inventory; customer supply chain requirements, carbon labels and CBAM use the product carbon footprint.
Is my company required to do a GHG inventory?
Three situations are mandatory: emission sources announced by the Ministry of Environment (manufacturers with annual emissions of 25,000 tonnes or more and specified industries, which must inventory, register and be verified); service businesses, transportation companies, hospitals, universities and colleges, department stores, convenience store chains and others under the expanded coverage from 2026 (inventory and registration only); and listed companies disclosing under FSC rules. Other companies often need to do one because customers require it.
What are Scope 1, 2 and 3?
Scope 1 is direct emissions, such as fuel combustion, processes and refrigerant leakage; Scope 2 is energy indirect emissions from purchased electricity, heat and steam; Scope 3 is other indirect emissions across the value chain, in 15 categories, such as purchased goods, transportation, employee commuting, and use and disposal of products.
How is Taiwan's carbon fee calculated?
It is levied on electricity and gas suppliers and manufacturers with annual emissions of 25,000 tonnes or more. Carbon fee = (annual emissions − 25,000 tonnes) × adjustment factor × rate; the standard rate is currently NT$300 per tonne, and the preferential rates for meeting designated reduction rates are NT$100 or NT$50. Fees on 2025 emissions were paid for the first time in May 2026, and a rate adjustment is still under review.
What is SBTi, and is it mandatory?
SBTi is a voluntary international initiative in which a third party validates whether a company's emissions reduction targets are aligned with the 1.5°C pathway. It is not a regulation, but it has become a common requirement in international brand supply chains, with more than 11,000 companies participating worldwide. The current criteria require Scope 1 + 2 reductions of at least about 4.2% per year and net zero by 2050 at the latest.
When does the new SBTi V2.0 apply?
V2.0 was published in June 2026 and takes effect on January 31, 2027; submissions under the new version are possible from Q1 2027, and all new submissions after January 31, 2028 must use it. For companies setting targets in 2026–2027, SBTi recommends submitting under the current versions first.
How much does SBTi validation cost, and how long does it take?
SBTi Services 2026 prices: near-term target validation for standard companies is US$13,000–26,000 (4 tiers by revenue), and the SME route is US$1,250–2,000; check the official website for current figures. The official review time is 30 working days for near-term targets and 60 working days for net-zero targets, plus time for inventory preparation and queuing.
What should exporters to the EU watch for? Is CBAM related to carbon footprints?
Yes. CBAM entered its definitive period in 2026; EU importers must buy certificates for the embedded emissions of steel, aluminum, cement, fertilizers, hydrogen and electricity, with sales beginning in February 2027. Taiwanese exporters need to provide product emissions data calculated using the CBAM methodology and verified; otherwise, higher default values may be applied.
Is Taiwan's product carbon footprint label mandatory?
No. In March 2025, the Ministry of Environment issued the Regulations for Voluntary Product Carbon Footprint Approval, Labeling and Management; applications are voluntary, products must be verified by an accredited verification body, and approval is valid for 2 years. Using the label without approval is subject to penalties.
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