Taiwan Expects NT$4.5 Billion in Carbon Fees

The Ministry of Environment (MOENV) estimates that Taiwan will collect NT$4.5 billion in its first year of carbon fee implementation, marking a significant step in the nation’s efforts to reduce greenhouse gas emissions through market-based mechanisms.

The carbon fee, which took effect in January 2026, applies to large emitters in the power, manufacturing, and cement sectors, requiring them to pay based on verified carbon dioxide emissions above government-set baselines. The fee starts at NT$200 per metric ton of CO₂ and is scheduled to increase gradually over the next five years.

According to MOENV, the projected revenue reflects emissions data from approximately 200 major facilities covered under the initial phase of the program. The agency emphasized that the estimate is based on self-reported emissions verified through third-party audits and satellite monitoring where available.

The funds collected will be directed into a dedicated climate action account, with plans to allocate a portion toward renewable energy subsidies, industrial decarbonization grants, and support for small and medium enterprises transitioning to lower-carbon operations. MOENV stated that specific allocation ratios will be finalized by mid-2026 following public consultation.

Taiwan’s carbon fee system is part of its broader Climate Change Response Act, which aims to achieve net-zero emissions by 2050. The legislation, passed in 2023, established the legal framework for carbon pricing, emissions trading, and mandatory reporting for high-emission industries.

Officials noted that while the inaugural year’s revenue falls short of some early projections due to lower-than-expected industrial output in certain sectors, compliance rates have exceeded 95 percent among covered entities. MOENV attributed the high compliance to clear guidelines, phased implementation, and outreach efforts conducted in 2025.

The Environmental Protection Administration, which operates under MOENV, will oversee enforcement and auditing. Penalties for underreporting or non-payment include fines up to NT$1 million per violation and potential inclusion in a public non-compliance list.

Industry representatives have expressed cautious support for the system, calling for predictability in future fee increases and greater transparency in how revenues are reinvested. Some manufacturers have begun investing in energy efficiency upgrades and on-site renewable generation to reduce their fee exposure.

MOENV plans to publish the first official carbon fee collection report in July 2026, detailing actual revenues, emission reductions achieved, and administrative costs. The agency said it will also evaluate whether to expand the program to additional sectors, such as aviation and maritime transport, in future phases.