Taiwan's Ministry of Environment has set its carbon fee at NT$300(US$10) per ton of CO2, a rate that has sparked pushback from both environmental advocates and industry leaders.
Public interest groups argue the fee is too low to drive meaningful change, while companies say it's too high, warning it could hurt competitiveness and deter future investment. The Ministry of Economic Affairs(MOEA) has pushed to allow industries to retain cash for green investments, but Environment Minister Chi-Ming Peng remains firm, calling the fee a difficult but necessary step to uphold Taiwan's environmental commitments.
Peng clarified that the fee targets corporate emitters. With active emissions cuts, the government expects to collect just NT$6 billion per year; without them, this figure could rise to NT$30–40 billion. Local and global studies suggest carbon pricing is effective at pushing companies to decarbonize.
The Industrial Development Administration(IDA) within the MOEA supports balancing different industry perspectives, especially those from high-emission sectors. Instead of imposing a high fee, the IDA advocates for incentivizing green tech investments through tax breaks included in a recent Statute for Industrial Innovation revision.
Minister Peng noted that the NT$300 rate has drawn mixed reviews, with environmental groups calling it too low and industry associations saying it's too high. Taipower and CPC Corporation have deemed it reasonable, given that decarbonization is now a global priority.
Peng argued the green transition could fuel Taiwan's economy, where green jobs are rising, with 20,000 roles already tied to this sector. Despite differing views between the Ministry of Environment and Economic Affairs on policy impacts, Peng emphasized that companies committed to decarbonizing can qualify for discounted rates of NT$50–100 per ton, subject to adjustment every two years.
The Ministry's report outlines that the fee will apply to registered entities with emissions of over 25,000 tons of CO2e per year, including power, gas, and manufacturing sectors while excluding construction, residential, commercial, and transportation. GDP impact is projected to be minimal, between 0.009% and 0.12%, with negligible inflationary effect on the Consumer Price Index (CPI), estimated at 0.006% to 0.08%.
Countries like Singapore, Japan, China, South Korea, and Indonesia already have carbon pricing schemes, and Taiwan officially joined this movement on August 29, 2024, with guidelines on carbon fees and emissions reduction targets, marking a shift to a carbon-priced economy.
After six deliberative meetings this year, Taiwan's Carbon Fee Review Committee recommended the NT$300 starting rate, which the Ministry of Environment finalized on October 8, 2024. Next, the Ministry will proceed with formal regulations, encouraging businesses to plan emissions reductions proactively.
