Government committee recommends basic carbon fee of NT$300/tCO2

Taipei, Oct. 7 (CNA) A review committee established by Taiwan's government on Monday recommended setting a basic carbon fee rate of NT$300 (US$9.31) per metric ton of carbon emissions.

In addition to the basic rate, preferential rates of NT$50/tCO2 and NT$100/tCO2 were also recommended for companies that meet defined emissions reduction targets, the committee said.

The fees, to be applied initially only to companies emitting more than 25,000 metric tons a year, are expected to be collected starting in 2026, based on actual emissions in 2025.

The year 2025 will be used as a dry run in which large emitters will only have to report emissions amounts for 2024 but will not have to pay carbon fees, according to the committee.

The review committee issued its long-delayed recommendations -- which still must be approved by the Ministry of the Environment -- after reaching a consensus on Monday, during its sixth meeting since March of this year.

It had previously said it was considering a basic fee rate in the NT$300-NT$500/tCO2 range.

The Environment Ministry has said around 500 emitters are expected to meet the 25,000-metric ton threshold for paying a carbon fee.

At a meeting in July, the committee reviewed estimates showing that a carbon fee of NT$300 per metric ton would lead to a 0.12 percentage point drop in gross domestic product (GDP), while a NT$500 fee would cause a 0.2 percentage point fall.

Every 0.1 percentage point drop in GDP is equivalent to around NT$23.5 billion, based on Taiwan's 2023 GDP, according to the ministry.