Government releases tentative outline of carbon pricing plans

Taipei, Dec. 29 (CNA) The Climate Change Administration (CCA) on Friday released a tentative outline of Taiwan's future carbon pricing structure, including capping large polluters' use of carbon credits to reduce carbon fees at 5 percent of total emissions.

In a statement, the CCA said that it had made the outline public to allow the proposals to be reviewed by stakeholders ahead of the publication of an official draft.

The publication of the official draft will trigger a 60-day public consultation period, after which the regulations will come into force, the CCA added.

The proposed regulations released Friday reaffirmed that carbon fees would be introduced for "big emitters" -- companies whose direct and indirect annual emissions exceed 25,000 metric tons -- beginning in 2025, affecting an estimated 512 companies.

However, some borderline cases with ongoing decarbonizing efforts could find themselves under the 25,000-ton threshold by 2024, the baseline year for calculating carbon fees to be paid in 2025, according to CCA Deputy Director-General Huang Wei-ming (黃偉鳴).

Those in the electricity industry, iron and steel, oil refinery, cement, semiconductors, thin-film transistor liquid-crystal display (TFT-LCD), and all companies with simply direct fossil fuel emissions exceeding the 25,000-ton threshold would be subject to fees, the CCA said.

Regarding the use of international carbon credits to reduce fees, this will be capped at 5 percent of a company's total emissions in the preceding year, the CCA said.

FEATURE/Taiwan set on carbon 'fee' rather than 'tax' to cut carbon

International carbon credits debuted on the Taiwan Carbon Solution Exchange (TCX) on Dec. 22, and the CCA said that the 5 percent limit on their use followed the same standard as Singapore.

However, credits already purchased on the TCX will not be counted when calculating carbon fees for 2025, the CCA said.

"There will be further discussion with the TCX on what international carbon credits will be introduced onto the exchange so they will be able to waive our carbon fees," Huang said.

Meanwhile, the CCA also proposed allowing big emitters to reduce fees by purchasing ministry-authorized domestic carbon credits from firms carrying out emissions reduction projects.

The CCA did not clarify if big emitters' use of domestic carbon credits would be restricted in the same manner as international credits.

As to why the CCA had released a predraft instead of an official draft of the regulations, Huang said that this was to allow for "a round of wider communication with society, creating a more solid consensus."

Huang added that a consensus before announcing the draft among stakeholders, including the industries affected by the fees, could help the 60-day consultation period go more smoothly.

Although Huang did not give an exact date for the official draft's publication, he said it was "expected to be done" along with the final version of the regulations in the first quarter of next year.

Friday's release did not mention the exact carbon fee rate but the CCA has said previously it will decide on this figure in the first quarter of next year.

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