TAIPEI (Taiwan News) — On April 19, when attending a dinner hosted by the American Chamber of Commerce, Taiwan President Tsai Ing-wen (蔡英文) announced the creation of a carbon exchange, per Business Today.
After Tsai announced the news, a number of listed companies which have large forest holdings, dubbed "carbon concept stocks," like YFY (1907.TW), Chunghwa Pulp (1905.TW), and Taiwan Tea (2913.TW) all saw a pickup in trading.
From the close of trade on April 19 to May 16, the stock price of Chunghwa Pulp rose by more than 38.2% and YFY rose by 10.8%.
Overseas, international financial giants like JPMorgan Chase, T Rowe Price, Pleasant, and Manulife, have also recently purchased large swathes of forested land with the intention of packaging these holdings into a financial commodity.
Currently, the Taiwan Stock Exchange (TSE), the Cabinet’s National Development Fund (NDF), and the Environmental Protection Administration (EPA) are discussing the establishment of a carbon trading platform.
Chung Hsing University Department of Forestry Professor Liu Wanyu (柳婉郁) says many stocks on the TSE are characterized as carbon concept stocks. "On average, a tree can convert four kilograms of carbon dioxide in the air into one kilogram of wood,“ said Liu.
Since the end of last year, many international investment institutions have been eagerly investing in trees. JPMorgan Chase, for instance, the world's leading investment bank, in February acquired more than 250,000 acres of commercial forest in the southern pine belt encompassing parts of Mississippi, Arkansas, Oklahoma for more than US$500 million (NT$15.31billion), an area 3.7 times the size of Taipei City.
And in November 2022, T. Rowe Price Group, an established U.S. asset management company, bought hardwood forests in 17 U.S. states for US$1.8 billion (NT$55 billion).
Additionally, Canadian financial giant, Manulife Group, a major forest land owner in the United States, announced in December 2022 that it would establish a forest climate fund with US$500 million (NT$15.31 billion) to build an asset portfolio dominated by sustainable forest land.
In April, Weyerhaeuser, a leading American lumber company, revealed that it will establish a new business unit that will treat forest carbon rights as a business. The lumber giant, which owns 10.6 million acres of woodland in the U.S., estimates the new division could contribute US$100 million (NT$3 billion) in revenue to the company by 2025.
