
In late October, the Ministry of Environment (MOENV) announced that Taiwan would begin a long-delayed carbon fee program for businesses starting January 1 next year. The program is part of the government’s efforts to counter climate change, with Taiwan’s commitment to reach net-zero carbon emissions by 2050 enshrined in law.
A general fee of NT$300 per metric ton of carbon dioxide equivalent (CO2e) will be charged, initially to companies emitting over 25,000 metric tons of these gases annually. The companies affected by the new fees have been given a one-year grace period to prepare. These large emitters will report their 2024 emissions to the government next year but will not need to pay anything until 2026, when fees will be based on their 2025 emissions.
The MOENV says it expects around 500 companies and organizations to meet the 25,000-metric ton threshold for paying the fee.
The move amounts to a small but significant step for Taiwan in implementing carbon pricing policies. After this initial phase, the rates will be increased annually, the MOENV says.
In preparation for the carbon fee implementation, MOENV has established a Carbon Fee Review Committee comprising 21 members, including six representatives from civil society organizations and domestic industry associations. This committee is tasked with assessing the fee rates and incentive measures to ensure a balanced approach that considers both environmental goals and industrial competitiveness. The international business community has criticized the government for excluding international companies from the committee, noting that these companies can share best practices and experiences from other markets.
The revenue generated from the carbon fees will be allocated to Taiwan’s Greenhouse Gas Management Fund. This fund is dedicated to supporting greenhouse gas reduction initiatives, the development of low-carbon and negative emission technologies, and providing subsidies and incentives for investments in emission reduction technologies. By channeling resources into these areas, the government aims to facilitate a smooth transition toward a low-carbon economy and achieve its net-zero emissions target by 2050.
To further encourage emission reductions, the MOENV has introduced the Management Regulations for Voluntary Greenhouse Gas Reduction Projects. This framework allows enterprises and government agencies to propose and implement voluntary reduction projects, earning “reduction credits” or “carbon credits” upon successful execution. These credits can be used to offset carbon fees or be traded with other entities, promoting a collaborative effort across sectors to achieve national emission reduction goals.

“According to the recommendations of the Rate Committee, after 2030, the rate levels will be raised to between NT$1,200 per ton and NT$1,800 per ton,” the ministry told Taiwan Business TOPICS in emailed notes. “This design provides a clear price signal, enabling regulated entities to invest in emissions reductions as early as possible.”
In addition to the general carbon fee, preferential rates will be offered to companies that meet defined emissions reduction targets, with rates of NT$50 or NT$100 per metric ton of CO2e at the beginning of the program in 2026.
“For regulated entities to enjoy preferential rates, they must submit emissions reduction commitments and detailed action plans, which must be reviewed and approved by the Ministry of Environment,” the ministry says. “The measure aims to ensure the effectiveness of emission reductions while reducing the financial pressure on regulated entities in the early stages of the system, allowing them to focus on investments in emission reduction.”
Some environmental groups had earlier criticized the rate of NT$300, saying it was far too low to have any substantial effect on the climate crisis.
For their part, economists have generally found carbon fees to be reasonable, saying that while the companies involved might experience challenges in the short term, pursuing these policies could ultimately force them to innovate, invest in emissions-saving technologies, and find ways to save energy – adding significant long-term value.
“This will pay off eventually,” says Kelvin Lau, senior economist for Greater China and North Asia at Standard Chartered Bank. “The short-term pain for companies will be inevitable, but it needs to be done.”
Ma Tie-ying, an economist at Singapore-based bank DBS, says carbon fees could help indirectly promote a green energy transition in Taiwan, creating a potential new economic driver. Last year, renewables accounted for around 10% of Taiwan’s total energy generation, and the government hopes to push that figure to 20% by 2026. However, bureaucratic hurdles have deterred some renewables companies – particularly in the offshore wind industry – from investing further in Taiwan.
Taiwanese companies’ expenditures to reduce carbon emissions could also be offset if their products align with EU standards under the Carbon Border Adjustment Mechanism (CBAM), which comes into full effect in 2026. The mechanism calculates the emissions in imported goods and uses the data to determine an EU import tariff, aiming to prevent “carbon leakage” – the outsourcing of climate-unfriendly production to foreign countries.
In October, Europe received 7.8% of Taiwan’s exports, according to the Ministry of Finance. Bum Ki Son, a regional economist with Barclays, adds that exports of goods to countries under CBAM regimes account for 0.7% of Taiwan’s GDP and 11.4% of domestic production.
Major Western tech companies have been leading the push for a transition to green energy, putting pressure on many Taiwanese suppliers to follow suit. But economists note that many Taiwanese companies lack knowledge on how to reduce carbon emissions and need more direction and technological support from the government.