Groups urge government to finalize carbon fee rate

As the government is to start collecting carbon fees in 2025, which would be based on 2024 emissions, the carbon rate should be set this year, advocates said

Environmental advocacy groups on Thursday called on the government to finalize how much it would charge companies for carbon emissions.

The Green Citizens’ Action Alliance, together with the Environmental Rights Foundation and the Taiwan Climate Action Network, questioned the government’s resolve to reduce carbon emissions.

The Ministry of Environment is prioritizing the implementation of a carbon credit exchange system, which “has no real substantive effect on reducing carbon emissions,” Environmental Rights Foundation researcher Lin Yenting (林彥廷) said.

The exchange is based on the premise that big emitters can fulfill their obligation to reduce carbon emissions simply by purchasing credits if they fall short of their commitments, Lin said.

In other words, the exchange system is a nonstarter for carbon emissions reduction in the absence of a carbon fee, Environmental Rights Foundation lawyer Lu Kuanhui (呂冠輝) said.

“We have only three months left until we get to 2024,” which is supposed to be the baseline year of carbon emissions quantification for fee collection to happen in 2025, “but the rate has still not been decided,” Lu said.

Starting in 2025, carbon fees are to be collected annually from businesses that emit more than 25,000 tonnes of carbon dioxide the previous year, the ministry said.

As next year is to serve as the basis for the collection of carbon fees in 2025, the carbon fee rate should be finalized by the end of this year.

As for the actual carbon fee rate, the government has hinted that it might be NT$300 per tonne of carbon emissions, which is too low, Taiwan Climate Action Network chairman Chao Chia-wei (趙家緯) said.

The US Environmental Protection Agency has estimated that the cost of carbon emissions on society not reflected in market prices, known as the “externality” of carbon emissions, is about US$190 a tonne, Chao said.

“That would mean only 5 percent of the externality is reflected at the NT$300 rate,” he said.

Based on his group’s calculations, a rate of NT$500 per tonne would be the minimum necessary for Taiwan’s cement, steel and petrochemical industries, which account for one-quarter of the nation’s carbon emissions, to take the initiative to cut emissions.

The government has also proposed offering a preferential rate or a discount on carbon fees for companies in target industries that take initiatives to reduce emissions, an idea that the environmental groups did not support.

John Chung-en Liu (劉仲恩), an associate professor of sociology at National Taiwan University, said the preferential rate would defeat the purpose of charging carbon fees, which is that “polluters pay,” and would be more cumbersome to implement.

The ministry’s Climate Change Administration said that carbon fees would be charged if the companies that applied for the preferential rate failed to reach their proposed emission reduction goals.

It said the accusation that it was prioritizing a carbon credit exchange was “a misunderstanding,” as the carbon fee collection system was designed to be complemented by other measures aimed at pressuring companies to cut emissions.

It said the exchange has always been seen as “the last resort,” but did not explain why it has yet to set a carbon rate.