Taiwan should accelerate setting up detailed regulations for carbon pricing and the creation of a carbon credit exchange to reduce carbon emissions and help local manufacturers cope with the imminent “carbon border tax” levied by the EU.
Taiwan has lagged behind developed countries in implementing policies to cut greenhouse gas emissions. According to a report published by the World Bank in May, 68 countries had carbon pricing initiatives, with 36 levying carbon taxes and 32 having emission trading systems.
Taiwan’s proposed climate change response act (氣候變遷因應法), which would provide key regulations related to reaching the government’s pledge to reduce net carbon emissions to zero by 2050, passed the first reading at the Legislative Yuan in May. The Environmental Protection Administration aims to push through the act during the last legislative session that began this month.
However, the bill lacks substantial content and detailed regulations on carbon pricing or penalties for violations. It stipulates that local companies emitting more than 25,000 tonnes of carbon per year would be required to pay a carbon fee, rather than the commonly adopted carbon tax. It does not clearly say how much those large emitters would have to pay, but fees could range from NT$100 to NT$300 (US$3.26 to US$9.77) per tonne of carbon emitted.
The carbon fee would also not adequately motivate local manufacturers to cut their carbon footprints. The charge is much lower than the carbon tax of more than NT$500 per tonne Singapore intends to levy from 2024. The city-state started collecting carbon taxes in 2019, and in February quadrupled the levy. Local businesses may choose to pay the relatively low carbon fee if there is any.
The carbon fee, to take effect as early as 2024, would initially cover about 287 companies from high-emitting industries such as the steelmaking, semiconductor, cement and petrochemical sectors. Industry leaders such as China Steel Corp, Taiwan Semiconductor Manufacturing Co and Formosa Plastics Group would be on the list.
The carbon fee is only a small part of carbon reduction measures implemented by some EU countries, the US, Japan, South Korea, China and Singapore. Other measures usually include carbon trading to help businesses compensate for carbon emissions by funding an equivalent saving of carbon dioxide elsewhere.
Taiwan should set up a carbon credit exchange or trading system to meet growing domestic demand. Local exporters are facing mounting pressure to reduce their carbon footprints to secure orders. Since carbon emissions are included in their customers’ carbon emission reports, businesses with less carbon emissions would have an advantage.
Local businesses need to gear up for the implementation of the carbon border adjustment mechanism by the EU — an import tax designed to corral other countries into tackling climate change.
The carbon border tax could take effect from 2026. About 212 categories worth NT$24.5 billion from Taiwan are expected to be affected by the EU levy.
Since Taiwan does not have a carbon market, businesses are looking overseas. Chimei Corp, which makes polymer materials, synthetic rubbers and specialty chemicals, said it joined Singapore’s global carbon exchange Climate Impact X (CIX) in April and became the first Taiwanese enterprise to complete a carbon credit transaction through the purchase of 10,000 tonnes of carbon credits from the CIX’s Project Marketplace.
As Taiwan’s economy is reliant on exports, government agencies should catch up with the world in setting up a comprehensive carbon emission reduction mechanism that includes carbon fees and carbon trading. This would help local businesses lower costs, secure orders and create new revenue sources by selling carbon savings.
When former president Tsai Ing-wen (蔡英文) first took office in 2016, she set ambitious goals for remaking the energy mix in Taiwan. At the core of this effort was a significant expansion of the percentage of renewable energy generated to keep pace with growing domestic and global demands to reduce emissions. This effort met with broad bipartisan support as all three major parties placed expanding renewable energy at the center of their energy platforms. However, over the past several years partisanship has become a major headwind in realizing a set of energy goals that all three parties profess to want. Tsai
An elderly mother and her daughter were found dead in Kaohsiung after having not been seen for several days, discovered only when a foul odor began to spread and drew neighbors’ attention. There have been many similar cases, but it is particularly troubling that some of the victims were excluded from the social welfare safety net because they did not meet eligibility criteria. According to media reports, the middle-aged daughter had sought help from the local borough warden. Although the warden did step in, many services were unavailable without out-of-pocket payments due to issues with eligibility, leaving the warden’s hands
There is a modern roadway stretching from central Hargeisa, the capital of Somaliland in the Horn of Africa, to the partially recognized state’s Egal International Airport. Emblazoned on a gold plaque marking the road’s inauguration in July last year, just below the flags of Somaliland and the Republic of China (ROC), is the road’s official name: “Taiwan Avenue.” The first phase of construction of the upgraded road, with new sidewalks and a modern drainage system to reduce flooding, was 70 percent funded by Taipei, which contributed US$1.85 million. That is a relatively modest sum for the effect on international perception, and
At the end of last year, a diplomatic development with consequences reaching well beyond the regional level emerged. Israeli Prime Minister Benjamin Netanyahu declared Israel’s recognition of Somaliland as a sovereign state, paving the way for political, economic and strategic cooperation with the African nation. The diplomatic breakthrough yields, above all, substantial and tangible benefits for the two countries, enhancing Somaliland’s international posture, with a state prepared to champion its bid for broader legitimacy. With Israel’s support, Somaliland might also benefit from the expertise of Israeli companies in fields such as mineral exploration and water management, as underscored by Israeli Minister of
RSS