HIWIN Technologies has long monitored global carbon pricing trends. To support cost‑effectiveness analysis, enhance energy efficiency, drive low‑carbon investments, promote the integration of climate‑related considerations into decision‑making, identify and seize low‑carbon opportunities, influence corporate strategy and financial planning, formulate and achieve climate‑related policies, proactively mitigate the risk of cost increases arising from future carbon pricing regulations, and strengthen internal momentum for emissions reduction, the Company introduced an internal carbon pricing mechanism since 2025.
Through this mechanism, the economic cost of carbon emissions generated from operational activities is internalized, thereby supporting the systematic integration of energy conservation and carbon reduction considerations into corporate decision‑making processes.
The internal carbon price is established using a shadow pricing approach. Based on a consolidation of prevailing carbon fees, emissions trading system (ETS) prices, and relevant regulatory charges, the Company determined the cost required to abate one metric tons of carbon emissions. Upon approval by the Sustainability and Cyber Security Committee, the internal carbon price was set at USD 50 per metric tons of CO₂e, covering Scope 1 and Scope 2 greenhouse gas emissions. At the beginning of each year, the Sustainability and Cyber Security Committee reviews carbon fee trends, internal carbon prices adopted by domestic and international peers, and the Company’s emissions reduction targets to assess whether adjustments to the internal carbon price are warranted.
During the initial implementation phase, the internal carbon pricing system is being piloted at HIWIN’s manufacturing sites in Taiwan. When evaluating investments in energy‑saving equipment, the Company incorporates the concept of a carbon payback period, assessing not only the financial payback period but also the associated emissions reduction benefits as part of the investment decision‑making criteria. Internal carbon fees are charged to individual manufacturing units and allocated to a dedicated carbon fund. The cost impacts of internal carbon pricing are reflected in monthly management reports, and emissions reduction performance is incorporated into plant‑level and managerial performance evaluations. This mechanism incentivizes plants and managers to invest in low‑carbon equipment and pursue process‑based emissions reduction initiatives.
The internal carbon price is periodically reviewed with reference to external carbon pricing trends, regulatory developments, and market conditions. Through this mechanism, the Company systematically integrates carbon considerations into investment decisions, resource allocation, and climate strategy implementation, strengthening resilience to future carbon‑related regulatory and cost risks.
By applying the internal carbon price, the Company has been able to quantify the climate‑related financial implications of emission reduction initiatives. In 2025, investments in energy‑saving and environmentally sustainable equipment resulted in electricity savings of approximately 6,234kWh, equivalent to a reduction of 2,951 tons of CO₂e. Based on the internal carbon price, the estimated avoided external carbon cost amounted to approximately NT$4.57 million.