To establish a carbon pricing system in Taiwan and steadily promote carbon reduction, the Ministry of Environment (MOENV) has announced the drafts of "Regulations Governing the Collection of Carbon Fees," "Designated Greenhouse Gas Reduction Goal for Entities Subject to Carbon Fees," and "Regulations for Administration of Self-Determined Reduction Plan." The three draft regulations announced on April 29 make up the supporting mechanism for future implementation of the carbon fee system, aimed at accelerating and scaling up the reduction efforts of entities subject to carbon fees.
The MOENV emphasizes that the primary goal of the carbon fee system is to incentivize reductions rather than generate fiscal revenue. The draft regulations will serve as important guidelines for the feepayers, helping them to plan their carbon reduction measures and pathways towards Taiwan's 2050 net-zero target. There is a 60-day public consultation period for these regulations, during which the MOENV will engage in social dialogue to build consensus among all stakeholders.
Key points of the three draft regulations:
The draft of "Regulations Governing the Collection of Carbon Fees"
The drafts of "Designated Greenhouse Gas Reduction Goal for Entities Subject to Carbon Fees" and "Regulations for Administration of Self-Determined Reduction Plan":
According to Article 29 of the Climate Change Act, entities that submit self-determined reduction plan—including strategies such as switching to low-carbon fuels, adopting negative emission technologies, improving energy efficiency, utilizing renewable energy, or enhancing industrial processes—may apply for approval of preferential rates. The MOENV’s drafts are aimed at achieving the nation's 2030 reduction target.
To encourage the carbon fee payers to drive reductions among non-payers, the ministry has set a ratio of 1.2 for using the emission reduction credits from voluntary reduction projects and offset projects to deduct chargeable emissions, with a cap of 10% of the feepayer's total chargeable emissions. Additionally, for industries that are not at high risk of carbon leakage, the ratio for using the credits from pre-implementation project reductions in the early two years of the carbon fee implementation is set at 0.3. These non-high-risk industries are also permitted to use internationally recognized reduction credits, up to 5% of their chargeable emissions.
The ministry emphasizes that the carbon fee system is designed primarily to incentivize reductions rather than generate revenue. The aim is to accelerate Taiwan's industrial decarbonization and low-carbon transformation through the economic incentives provided by the carbon fee mechanism.
Taiwan's Carbon Fee