Taipei, Oct. 4 (CNA) The Minister of Environment and Minister of Economic Affairs were questioned in the Legislative Yuan (LY) on Wednesday about the scheduled collection of carbon fees and the potential impact on local enterprises.
The Ministry of Environment has announced that the collection of carbon fees will start in 2025, based on the amount of carbon registered by enterprises in 2024. In this phase, only 512 enterprises that emit more than 25,000 tonnes annually will be subject to the fees.
The carbon fee rate has not yet been determined, but a “preferential rate” is to be provided to companies that voluntarily make an effort to cut carbon emissions.
Interview: Taiwan’s carbon fee rate will take CPI into consideration, says minister of enviroment
Democratic Progressive Party Legislator Hung Sun-han (洪申翰) expressed concerns over the preferential rate, worrying that it could become a product of “haggling” between enterprises and the ministry, after witnessing many meetings between the two sides.
Carbon pricing is a tool to “shift the burden for the damage back to those who are responsible for it, and who can reduce it,” Hung cited the World Bank as saying.
Hung added that the global trend is to attribute a higher social cost to greenhouse gases, citing the U.S. Environmental Protection Agency’s report in late 2022 which increased the cost from US$51 to US$190.
The lawmaker also pointed out that when the Climate Change Response Act was amended, Article 29 about the preferential rate was the most controversial and debated clause.
“An explanation was therefore added to the article specifying the standard to qualify for the preferential rate, in which SBTi (science-based target initiative) was cited,” Hung said, adding that an objective and quantifiable standard is required.
SBTi is a partnership between international nonprofit organization Carbon Disclosure Project (CDP), the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It aims to push the private sector to reduce greenhouse gas (GHG) emissions and provides a clearly-defined, science-based criteria for companies to do so.
Hung asked Minister of Environment Shieu Fuh-sheng (薛富盛) to commit to taking SBTi into account when setting the regulation concerning the preferential rate, which has not yet been announced, to which the minister responded positively.
The DPP lawmaker also expressed doubt over the possibility “green inflation” raised by the minister in the media interview could be caused by setting too high a carbon fee.
“To avoid green inflation, what we should do is not lower carbon fees which are the responsibilities that these emitters should bear,” Hung said. “We can consider other financial measures such as [the Inflation Reduction Act] employed by the U.S. government that rolls out incentives for enterprises to have greener products or plans.”
Opposition Kuomintang (KMT) Legislator Chang Yu-mei (張育美) also cautioned the minister that as the transitional period for the European Union’s CBAM (Carbon Border Adjustment Mechanism) officially started on Oct. 1, “we certainly want our companies to pay fees within our border rather than pay tariffs to other countries.”
She pointed out that according to Ministry of Economic Affairs, Taiwan will be affected by 212 of the 248 product categories subject to CBAM. “So small and medium enterprises (SMEs) should be prepared as well.”
Hsieh said the 512 big emitters account for about 70 percent of the carbon emissions in Taiwan, and are also the upstream companies whose carbon reduction efforts will be required to include their SME suppliers, which is the reason why the big emitters are first included in the carbon fee scheme.
Minister of Economic Affairs Wang Mei-hua (王美花) also addressed DPP Legislator Tsai Pei-hui’s (蔡培慧) inquiries over Taiwanese SMEs’ anxiety about international requirements over carbon emission reduction.
“There are only about 16 certified [carbon reduction] verification institutions right now for more than 100,000 [manufacturing SMEs] in the country,” Tsai said.
Wang said SMEs are currently not subject to scheduled carbon fee collection, but added that “the ministry has helped establish an ‘Industrial Carbon Neutrality Alliance’ where major enterprises are taking the lead in helping SMEs cut carbon emissions in their supply chains.”
