Taiwan Collects Nearly NT$5 Billion in First Carbon Fee Cycle: Semiconductor Industry Leads Contributions

Taipei: The Ministry of Environment (MOENV) announced that it has successfully collected NT$4.97 billion (US$158.08 million) during Taiwan's inaugural carbon fee collection cycle. This milestone marks a significant step in the country's efforts to mitigate carbon emissions. According to Focus Taiwan, a total of 461 factories operated by 240 companies contributed to the carbon fees. Among these, 123 semiconductor manufacturing facilities were the largest contributors, accounting for approximately NT$2.2 billion. Notably, 33 facilities operated by Taiwan Semiconductor Manufacturing Co. (TSMC) were part of this significant contribution. The electricity supply sector added NT$635 million through 19 facilities, while 29 steel plants paid NT$400 million. Nine concrete plants contributed NT$130 million, as reported by the MOENV. The initial revenue estimate for the carbon fee was around NT$4.5 billion, but the final amount exceeded expectations. This increase was attributed to some factories that had initially app lied for preferential rates through voluntary emissions reduction plans later withdrawing their applications or having them rejected, thus subjecting them to the standard rate of NT$300 per metric ton of carbon emissions. MOENV Climate Change Administration Director-General Tsai Lin-yi highlighted that 430 factories applied for preferential rates of NT$50 or NT$100 per metric ton. However, 28 of these applications were either withdrawn or rejected. Most rejections occurred because the proposed emissions reduction measures did not meet regulatory standards. Additionally, some companies withdrew their plans due to economic growth and expanded production capacity, which made their original reduction targets unattainable. In response to global uncertainties, including ongoing international conflicts, the MOENV offered installment payment and deferral options. Despite this, all affected facilities chose to pay in full. The Climate Change Response Act mandates that carbon fee revenue is allocated to a greenhouse gas management fund for emissions reduction and climate change-related research. Tsai mentioned that the fund's management committee has approved the allocation of NT$2 billion to subsidize emissions-reduction projects and climate-adaptation research by industries and local governments. Additionally, NT$500 million will be used to provide credit guarantees and interest subsidies for participating industries. Environment Minister Peng Chi-ming noted that the market's carbon reduction costs are estimated at NT$3,000 to NT$6,000 per metric ton. Based on this benchmark, the NT$4.97 billion collected represents an estimated carbon-reduction value of between NT$150 billion and NT$300 billion. Peng also pointed out that the semiconductor industry's significant contribution to carbon fees is due to its robust growth, while traditional sectors like textiles have experienced minimal impact. Under Taiwan's Regulations Governing the Collection of Carbon Fees, companies emitting at least 25,000 metric tons of carbon di oxide annually are obligated to pay carbon fees based on their total emissions. These regulations, effective from Jan. 1, 2025, applied to emissions generated in 2025, with the first payment cycle deadline set for May 31, 2026.