February 2024
Elva Chuang and Tina Lee
Starting from 2025, Taiwan will implement the carbon fee. On December 29, 2023, the Ministry of Environment announced the draft of the “Regulations Governing the Collection of the Carbon Fee.” Although this announcement was not disclosed the specific content of the draft, it outlined preliminary regulations regarding the “Businesses Subject to the Carbon Fee,” “Carbon Fee Declaration, Payment Schedule and Procedures,” “Carbon Fee Calculation,” and ” Reduction Credits for Deductions of Carbon Emissions.”
I. Businesses Subject to the Carbon Fee
Businesses that meet the requirements outlined in the annexed table of “Businesses Subject to Inspection and Registration for Greenhouse Gas Emissions” [1](e.g., electricity business steel manufacturing business, petroleum refining business, cement business, semiconductor business, thin-film transistor liquid crystal display business) will be subject to the imposed carbon fee. With a total annual greenhouse gas emissions of 25,000 metric tons of carbon dioxide equivalent from direct emissions and indirect emissions from electricity consumption throughout their entire factory or premises, these businesses are subject to the imposed carbon fee.
II. Carbon Fee Declaration, Payment Schedule, and Procedures
Starting from 2025, businesses subject to the carbon fee must, by the end of May each year, calculate the amount they need to pay based on the greenhouse gas emissions from January 1 to December 31 of the previous year, using the prescribed carbon fee rate. They should then fill out the carbon fee declaration form and payment voucher according to the format specified by the central competent authority. The carbon fee should be self-paid to the designated financial institution by the central competent authority and reported to the central competent authority (Ministry of Environment) via online transmission. However, businesses obtaining previous approval from the central competent authority may submit their declaration in writing.
III. Carbon Fee Calculation
The calculation of the carbon fee entails multiplying the greenhouse gas emissions emitted by the businesses subject to the fee in the preceding year by the designated carbon fee rate established by the central competent authority.
IV. Reduction Credits for Deductions of Carbon Emissions
In accordance with Articles 27 and 30 of the Climate Change Response Act, there are provisions for using foreign and domestic reduction credits to offset a certain proportion of the carbon fee. The “domestic reduction credits” include voluntary emission reduction programs, offset projects, and early action projects. Currently, reduction credits obtained from early action projects are only applicable for offsetting emissions occurring in the years 2024 and 2025. The use of “foreign reduction credits” requires obtaining approval from the central competent authority (Ministry of Environment) before being used to offset carbon fee emissions.
[1] “Businesses Subject to Inspection and Registration for Greenhouse Gas Emissions” and the annexed table https://oaout.moenv.gov.tw/law/LawContent.aspx?id=GL006011#lawmenu (last visited February 1, 2024).
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