In order to achieve our emission reduction roadmap toward net-zero emission by 2050, we introduced an internal carbon pricing (ICP) mechanism in 2025. We adopted a shadow price approach and built it into our key operational and investment decision-making processes. We strengthen cost-benefit analysis, evaluate the climate impact of major decisions, and guide capital toward low-carbon investments by applying ICP mechanism.

The internal carbon price is determined based on the unit abatement cost of internally implemented emission reduction projects, while also referencing domestic and international carbon pricing trends and policy recommendations. These include the recommended carbon price ranges under the WB2C mitigation scenario in the World Bank’s State and Trends of Carbon Pricing 2024, the carbon price recommendations for high-income countries under the International Carbon Price Floor (ICPF) proposed by the International Monetary Fund (IMF) in 2021, as well as Taiwan’s Ministry of Environment carbon fee levels and the market price of the European Union Emission Trading Scheme (EU ETS) in 2025. Based on this comprehensive assessment, and following approval by the Sustainability Committee and reporting to the Board of Directors, we established an internal carbon price of NTD 2,500 per ton of CO₂e, with initial implementation covering the Nangang headquarters and Linkou warehouse.

The ICP serves as a decision-support indicator for evaluating the cost-effectiveness of emission reduction projects and investments. It incorporates climate-related factors into the decision-making process and helps identify and prioritize projects. This makes the implicit benefits of emission reduction projects more visible, guiding resources toward carbon reduction applications.

In the future, we will continue to regularly review our emission reduction progress and adjust the mechanism and price as needed. We will also plan to introduce an internal carbon fee and gradually expand the scope of implementation to more operational sites to strengthen incentives for decarbonization and support our transition to accelerate carbon reduction actions.