Carbon fee system to be finalized in a few months

It could take one to two months to finalize the carbon fee rate, as a review committee has not yet decided on the rate, but a plan to collect the fees from next year remains unchanged, Minister of Environment Shieu Fuh-sheng (薛富盛) said on Wednesday.

The Ministry of Environment was previously scheduled to announce the carbon fee rate this quarter.

However, Shieu told a legislative hearing that after a second meeting of the carbon fee rate review committee on Tuesday, the rate has still not been decided, but is expected to be finalized “in one or two months.”

Shieu said that although there would be no change to the carbon fee collection schedule, “the starting date of the calculation of feeliable carbon emissions, initially set on Jan. 1, could be postponed, depending on when the carbon fee rate is set.”

According to the schedule previously announced by the ministry, entities that emit more than the equivalent of 25,000 tonnes of carbon dioxide a year would start to pay carbon fees next year, based on their emissions this year.

Asked about the review committee’s preliminary conclusions after two meetings, the minister said it has been agreed that the rate should be increased incrementally, with 2030 as the endpoint, in order for businesses to be able to plan operations accordingly.

The rate is to be based on science, while also taking into consideration the consumer price index and electricity rate hikes, he added.

Lawmakers also asked whether the fees paid domestically could be discounted from the EU’s Carbon Border Adjustment Mechanism (CBAM) when the latter starts to charge a carbon levy in 2026.

Shieu answered in the affirmative, but also said that not all carbon fee-liable emitters export their products to the EU.

“It will be mostly those small and medium enterprises that are not big emitters, mainly screw and fastener manufacturers, that will be affected by CBAM, and the Ministry of Economic Affairs has been working to help them respond to the measure,” Shieu said.

Environment ministry data showed that 550 emitters meet the 25,000-tonne threshold, according to 2022 emissions.