The carbon fee rate in our country was finalized yesterday, setting a general rate of NT$300 per ton. If enterprises choose the highest standard for voluntary reduction plans, they can apply for the discounted rates of NT$50 under Plan A or NT$100 under Plan B. Carbon fees will be preliminarily declared by the end of May next year, with formal charges starting the year after.

Following the announcement of the carbon fee scheme, the Ministry of Economic Affairs, environmental groups, and industries expressed dissatisfaction. Environmental groups argued that the low fee does not provide enough incentive for companies to reduce carbon emissions and protested strongly, while the industrial association believes the rate is still too high, hindering the low-carbon transition for industries.

The Ministry of Environment’s Carbon Fee Review Committee finalized the general rate at NT$300 per ton yesterday, with discounted rates of NT$50 and NT$100 under Plans A and B, respectively. 

 

Director Tsai Ling-yi of the Ministry of Environment’s Climate Change Agency stated that for enterprises to apply for Plan A’s discounted rate, general industries must reduce their annual greenhouse gas emissions by 42% by 2030, compared to the baseline year of 2021. The steel industry must reduce emissions by 25.2%, and the cement industry by 22.3%. As for Plan B, industries must reduce emissions by 23% annually by 2030, compared to the average of baseline years 2018–2022.

The Ministry of Environment estimates that with most companies likely to opt for Plan B’s discounted rate, carbon fee revenues starting in 2026 will amount to around NT$6 billion annually.

The initial targets for collection include electricity, gas supply, and manufacturing industries with annual emissions of over 25,000 tons, covering around 281 companies. Industries identified as high-risk for carbon leakage will receive an additional 80% discount on emissions adjustment coefficients, meaning the minimum carbon fee for these industries could be as low as NT$10 per ton under Plan A’s discounted rate of NT$50.

Environmental groups like the Green Citizens’ Action Alliance, Taiwan Environmental Rights Protection Foundation, and others criticized the low NT$10 rate as cheaper than a tea egg, fearing it sends the wrong price signal to major carbon emitters, making it harder to push for corporate net-zero transitions. They suggested starting the general rate at NT$500, with an increase to at least NT$3,000 by 2030.

Lin Yu-hsuan, a researcher at the Taiwan Climate Action Network, pointed out that carbon fees need to exceed US$100 per ton to make it economically viable for high-carbon industries like steel, cement, and chemicals to invest in carbon reduction technologies. She also emphasized that any related carbon fee discounts should have sunset clauses and not be permanent exemptions.

The Industrial Association stated that different industries have varying capacities to bear the carbon fee, and since reducing emissions requires cost investment and the economy is cyclical, companies should be allowed to retain funds for low-carbon transformation investments. They argued that the proposed fee rate is still too high and hinders industrial transition. Additionally, the current plan does not align with Taiwan’s version of the EU Carbon Border Adjustment Mechanism (CBAM), making it impossible to tax imported high-carbon products, effectively encouraging the import of such goods.

The Ministry of Economic Affairs expressed a strong hope that the rate would consider Taiwan’s international industrial competitiveness, particularly in relation to major export competitors like Japan and South Korea. However, their opinion was not adopted by the committee, and they expressed regret, stating that they would continue to voice their concerns in the future.

TSMC reiterated that it would comply with the regulations and the announced implementation plan, expecting no impact on its financial performance. CPC Corporation, one of the major carbon emitters, reported that it emitted 6.54 million tons of greenhouse gases last year, and it is currently reviewing its reduction plans, aiming to submit a voluntary reduction plan by the end of June next year, in line with the Ministry of Environment’s regulations, to qualify for discounted rates.