To the central content area

Carbon Pricing System Ready to Launch with Diverse Tools to Promote Effective Carbon Reduction

line sharePrint Content

The Climate Change Response Act (氣候變遷因應法) was announced and implemented on 15 February this year, with the carbon fee collection system as its primary focus. It encourages regulated enterprises to take the initiative to reduce emissions, and those who achieve the specified reduction targets are eligible for preferential rates. This initiative aims to intensify and accelerate emission reductions by enterprises, while also incorporating a mechanism of granting carbon offsets for voluntary emission reduction to extend incentives to a broader range of entities. Through a variety of tools, the system is aimed to promote effective carbon reduction across Taiwan.

In Taiwan, greenhouse gas emissions are primarily from the electricity generation and manufacturing industries. The enterprises regulated by the Climate Change Response Act that are required to inventory and register emissions include traditional industries affecting people's livelihoods, such as electricity, steel, cement, papermaking, petrochemicals, and refining, as well as the optoelectronic semiconductor industry. These industries collectively account for nearly 80% of Taiwan's total emissions.

Carbon fee collection is implemented based on emissions to achieve the national emission reduction targets of different stages. The primary targets for the planned collection are the aforementioned electricity generation industry and large-scale manufacturing industries. According to the Climate Change Administration (CCA), starting from 2024, greenhouse gas emissions from entities subject to carbon fee collection will be accounted for carbon pricing. Preferential rates are available to enterprises that switch to low-carbon fuels, adopt negative emissions technologies, improve energy efficiency, use renewable energy, or improve manufacturing processes and are able to effectively lower emissions and meet specified reduction targets. And those who do not meet the targets in due time will be required to make payments to cover the shortfall.

The CCA stated that it aims to use a variety of mechanisms to guide enterprises to intensify and expedite emissions reductions. It is anticipated that related draft sub-laws will be proposed by the end of this year. The fee rates will be submitted for discussion to the review committee in the first quarter of next year, and they will be officially approved and announced by the MOENV.

The CCA emphasized that the carbon fee collection system is complemented by various tools, including using the inventory, audit and registration of greenhouse gas emissions to ascertain emissions, establishing emission benchmarks for enterprises to follow, and promoting voluntary emission reduction trading to extend incentives to a wider range of entities. At the current stage, draft sub-laws are being progressively preannounced, and consultation meetings are being held in preparation for the implementation of the system.

Excerpt from Major Environmental Policies, September 2023

Ministry of Environment