Carbon Fee Implementation Begins Nationwide

Starting from the dawn of 2024, businesses across Taiwan have commenced the implementation of carbon fees. This initiative stems from the enactment of the Climate Change Response Act on January 10, 2023, with the aim of propelling the transition towards a low-carbon society in response to the global climate crisis.

Carbon fees represent a pivotal carbon pricing mechanism designed to compel businesses emitting greenhouse gases to bear the associated costs, thereby fostering the reduction of carbon dioxide emissions. Distinct from carbon taxes and trading, in Taiwan, carbon fees are remitted to the Environmental Protection Agency, earmarked for the establishment of carbon reduction measures, energy transition policies, and public infrastructure.

The primary targets for carbon fee collection encompass businesses with annual carbon emissions surpassing 25,000 metric tons, spanning sectors like electricity, steel, refining, and cement. Companies are mandated to complete emission inventories by April 2025's closure and furnish carbon declaration forms for payment by May's end.

Although the precise fee rates for carbon remain undisclosed, companies can mitigate their carbon fees through avenues such as securing reduction quotas and implementing voluntary emission reduction plans. Furthermore, electricity companies can furnish emission documentation for power consumption to further curtail their emissions.

Nevertheless, carbon fees constitute merely a fragment of Taiwan's broader carbon pricing system. In the future, the Environmental Protection Agency will delve deeper into regulations like carbon taxes and comprehensive emission controls to refine the carbon pricing mechanism. Additionally, entities subject to carbon fee collection can proffer voluntary emission reduction plans to qualify for preferential rates, while the establishment of carbon trading platforms will unlock further avenues for businesses to trim their carbon footprints.

Upgrade of the Environmental Protection Agency Delays Carbon Fee Collection by One Year

Effective January 1, 2024, with the Environmental Protection Agency in Taiwan being upgraded to the Environmental Department, the initiation of carbon fee collection is underway. However, the onset of carbon fees has been deferred by a year, now set to commence in 2025. Leveraging the total emissions recorded for the entirety of 2024 as the basis for calculation, this decision reflects considerations for businesses, affording them additional time for preparation and adjustment.

Throughout the process of carbon fee collection, businesses can propose voluntary emission reduction plans to secure preferential rates. The Environmental Department will engage closely with diverse industries to shape carbon fee formulations and voluntary reduction plans. Subsequently, drafts of pertinent regulations will be tabled by late 2023, with a rate review committee slated for early convening next year to establish carbon fee rates, thereby enabling businesses to promptly allocate budgets.