Taiwan's recommended carbon fee too low: Environmental groups

Taipei, Oct. 7 (CNA) Environmental groups criticized the basic carbon fee and preferential rates a Taiwan government committee recommended on Monday, calling them "passive" and too low to affect the behavior of big carbon emitters.

The committee recommended a basic rate of NT$300 (US$9.31) per metric ton of carbon emissions that would be reduced to NT$50/tCO2 and NT$100/tCO2 for companies meeting defined preferential emissions reduction targets.

Seven environmental groups, including the Green Citizens' Action, Environmental Rights Foundation and Taiwan Climate Action Network, issued a joint statement expressing their disappointment with the proposals.

Aside from all of the rates being too low, the groups panned the discounts on preferential rates for high carbon emitters deemed as having "high carbon leakage risk" (those that could move offshore to avoid carbon fees).

In the cases of those companies, the preferential rates of NT$50 or NT$100 per metric ton of emissions would be multiplied by an "emissions adjustment coefficient," proposed initially at 0.2.

That would yield carbon fees of NT$20 or NT$10, which is "less than a tea egg," the groups complained.

The calculations related to the preferential rate discount were made according to carbon fee regulations announced by the Ministry of Environment (MOENV) in August.

Even without the discount, the low pricing could send the "wrong signals" to large carbon emitters and will not incentivize zero-emission transitions, the groups argued.

Moreover, if the price gap between Taiwan's carbon fees and those of its main trading partners widens, Taiwan's export competitiveness may be compromised, they said.

Greenpeace Taiwan believed the basic carbon fees to be too low to effectively reduce carbon emissions, saying that companies could see them as an affordable operating expense or pass them on to consumers rather than invest resources to reduce emissions and the fees.

The global community will also see Taiwan's "passive" carbon rate regulations as an indication that Taiwan lacks the determination to reduce carbon, the organization said.

Chao Chia-wei (趙家緯), the director of the Taiwan Environment and Planning Association, said the next step for the government would be to adapt to moves by the global community, such as the European Union's carbon border adjustment mechanism (CBAM), and he hoped that the review committee would revisit the low carbon fees next year.

He also voiced concerns that the revenue from such low rates, which he estimated at NT$6 billion, would not be enough to cover the subsidies being distributed by the government to encourage carbon reduction measures.

The MOENV said that the rates will increase step by step, and will be adjusted depending on circumstances such as voluntary reductions, industry competitiveness and international carbon fees.

According to the ministry, when the carbon fees are first collected in 2026, they will only be imposed on companies that emit more than 25,000 metric tons of carbon per year.

At present, it said, four factories in Taiwan emit 10 million metric tons of carbon per year, 178 emit between 100,000 and 1 million metric tons, and 183 emit 50,000-100,000 metric tons.

Under a scenario in which companies make no effort to reduce emissions, factories that emit 10 million metric tons of carbon would pay NT$3 billion in carbon fees, while those emitting 100,000 metric tons would pay NT$22.5 million in carbon fees, the MOENV said.

If, on the other hand, all companies qualified for the preferential rate of NT$100/tCO2, annual carbon fees would add up to around NT$6 billion, the ministry estimated.

According to MOENV statistics, Taiwan's net carbon emissions in 2022 totaled 264.14 million metric tons carbon dioxide equivalent (285.97 tCO2e of emissions minus 21.83 tCO2e in emissions absorbed by carbon sinks), with 51 percent coming from the manufacturing sector.

The recommendation committee suggested that the rates be adjusted to NT$1,200-NT$1,800 by 2030, which should be in line with international rates, it said.