Taiwan is set to introduce a carbon fee in 2025, targeting approximately 500 companies with rates between NT$300 (approx. US$9.30) and NT$500 per metric ton. However, the final fee structure and its alignment with international policies like the European Union's Carbon Border Adjustment Mechanism (CBAM) remain unresolved, sparking debate among industry leaders and government officials.
Officials from Taiwan's Ministry of Environment acknowledge the complexity of the carbon fee system, with particular concerns that local companies may face dual carbon costs from both Taiwan's fee and the EU's CBAM starting in 2026. This could leave industries—particularly high-emission sectors like cement, steel, and petrochemicals—at a competitive disadvantage in the global market.
While Taiwan's carbon fee may qualify for deductions under CBAM, the method for calculating these deductions remains uncertain, raising fears that insufficient offsets could significantly impact companies' bottom lines.
The proposed policy aims to push businesses toward decarbonization by incentivizing investment in cleaner technologies. However, there are concerns that increased costs could be passed on to consumers, leading to price hikes. Without careful design and international coordination, Taiwan's carbon fee could put local industries at risk, potentially yielding limited environmental benefits.
For Taiwan to succeed, the carbon fee needs to strike a balance between environmental goals and economic competitiveness, ensuring that companies are not penalized twice under both local and global carbon regimes. This delicate balancing act will be crucial for the policy's effectiveness and acceptance by the business community.
