Manufacturers that reduce carbon emissions by 25 to 28 percent by 2030 would be able to pay carbon fees at preferential rates, the Ministry of Environment said yesterday.
The ministry proposed the incentive in accordance with Article 29 of the Climate Change Response Act (氣候變遷因應法), which states that businesses subject to carbon fees can propose voluntary carbon reduction plans and apply for a preferential rate if they improve manufacturing processes and reach the government-set goal by switching to low-carbon fuels, adopting negative emissions technologies, increasing energy efficiency, using renewable energy or taking other measures to reduce greenhouse gas emissions.
“This is a goal temporarily set for manufacturers, and we still need to discuss it with all stakeholders. The goal will also be subject to review in different phases,” Climate Change Administration Deputy Director-General Huang Wei-ming (黃偉鳴) said.
Photo: Chen Chia-yi, Taipei Times
Based on the Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Report (AR6), the world must limit carbon emissions to an average of 5 billion tonnes per year from 2020 to 2100 if the global temperature increase is to be kept within an average of 1.5°C above pre-industrial levels, Huang said.
“When translating to the percentage of carbon reduction for corporations and using this year as the base year, companies must cut carbon emissions by at least 25.2 percent by 2030,” he said, adding that the goal stated in the act requires an “absolute reduction” of carbon emissions, rather than simply an improvement in production efficiency.
“The goal must also be set based on science-based technology initiatives. Even if new studies and technologies would surely appear after 2030, we can still set a goal based on technologies currently available,” he said.
Deputy Minister of Environment Shih Wen-chen (施文真) said the carbon reduction targets for manufacturers should be aligned with Taiwan’s “nationally determined contributions” to carbon reduction by 2030, or about 24 percent.
Climate Change Administration Director-General Tsai Ling-yi (蔡玲儀) said that emission reduction targets would be set based on manufacturing characteristics, adding that this would allow manufacturers to apply carbon-reduction measures more flexibly.
Details of the preferential rates for manufacturers who reach targets have yet to be finalized, the ministry said.
Separately, the ministry rejected allegations that carbon fees would cause Taiwan’s housing prices to surge by 15 to 35 percent, saying it suspected it was a tactic to inflate housing prices.
Housing prices consist of construction costs, land acquisition costs and sales profits, and about 15 to 35 percent of housing prices come from construction costs, it said.
An analysis by the Directorate-General of Budget, Accounting and Statistics showed that steel, metals and other building materials account for about 21 percent of construction costs, while cement accounts for about 10 percent, it said.
Carbon fees are imposed on manufacturers of steel, cement and other products that could produce greenhouse gas emissions of 25,000 tonnes or more, the ministry said.
The carbon fee would be calculated based on general and preferential pricing schemes, with the latter to be applied to those who meet carbon reduction targets set by the government, it said.
“Our estimates showed that levying carbon fees would only affect housing prices by 1 percent,” the ministry said, adding that its assessment is congruent with that stated in the IPCC’s AR6 report, which limited the effect to less than 1 percent.
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