Carbon fee collection to start in 2026, reporting next year: Ministry

Taipei, Aug. 29 (CNA) Carbon fees are to be collected starting in 2026, with 2025 being used as a preparation window in which only reporting of emission amounts for the previous year will be required, according to regulations announced by the Ministry of Environment on Thursday.

The regulations for carbon fee collection and how fee-liable enterprises can qualify for preferential rates by achieving certain emission reduction targets were made public on Thursday, with Minister of Environment Peng Chi-ming (彭啟明) calling it a milestone signifying Taiwan "has entered the era of carbon pricing."

The announced regulations will oversee how carbon fees are collected, management of fee-liable enterprises' reduction projects, and standards determining whether the reduction projects undertaken by the enterprises qualify them for preferential carbon fee rates.

Peng said at a press conference that the carbon fee scheme will cover those companies that emit more than 25,000 metric tons of carbon dioxide equivalent (MTCO2e) a year, which covers 281 enterprises (500 factory complexes in total) according to data from 2022.

Together they emit about 155 million MTCO2e a year, accounting for 54 percent of Taiwan's total emissions, according to the ministry.

"If all of these enterprises submit emission reduction projects [in compliance with the announced regulations and targets and with 2030 as the goal year], it is estimated that by 2030 around 37 million MTCO2e can be reduced," Peng said.

"And that is around 14 percent of the emissions of 2005 [or 268.89 MTCO2e], which is the baseline year [for Taiwan's goal of reducing carbon emissions by 23-25 percent by 2030]," he added.

The carbon fee rate, which is still being considered by the carbon fee rate committee, is expected to be set by the end of October and announced by the end of the year, taking effect on Jan. 1, 2025, the minister said.

However, fee collection will not begin until 2026, with fees collected to be based on the enterprises' 2025 emission level, according to the minister.

Fee-liable businesses will still be required to report their 2024 emissions in April 2025 in order for them to become more familiar with the system, he added.

"The enterprises will know how much they have to pay with the rate out in January 2025, and weigh measures they can undertake to reduce emissions and therefore fees," Peng said.

They can propose reduction projects accordingly by June 30, 2025, and if approved, will be qualified for preferential rates for the carbon fees they have to pay in 2026, he explained.

The carbon pricing mechanism will be the driving force for Taiwan's "green growth," the minister said.

As more companies are pushed to accelerate emissions reduction efforts, Peng said the country can benefit from this urgency by investing in the development of decarbonization innovations.

A "green growth fund" supported by the National Development Fund administered by the National Development Council, amounting to NT$10 billion (US$313 million), will be used to support Taiwan's innovative start-ups with net-zero technologies or ideas, Peng said.

The ministry has reached out to the insurance, finance, and venture capital sectors for more investment in green industries, he added.

Meanwhile, environmental groups released a statement after the announcement, criticizing the ministry for "giving up emissions in 2024" and maintaining various preferential measures for fee-liable enterprises that the groups railed against during the regulation drafting period.

The groups reemphasized the need for a higher carbon fee rate and called on the carbon fee rate review committee, which is scheduled to meet again in early September, to set a price of NT$500 per metric ton and at least NT$300 per ton after all the qualified discounts are taken into consideration.