Climate Change Administration

Taiwan's carbon fee system formally took effect last year (2025). At today's meeting, the Carbon Fee Rate Review Committee received briefings on the review principles for recognizing entities at high risk of carbon leakage, as well as on the emission reduction results and cost analysis of the Self-Determined Reduction Plans submitted by entities subject to carbon fees. Committee members affirmed the emission reduction results expected from the carbon fee system.

The Ministry of Environment explained that entities subject to carbon fees submitted a total of 430 Self-Determined Reduction Plans last year, which the Ministry is currently reviewing. Of these, 190 have been approved by the review panel, while 24 facilities have withdrawn their applications. The Ministry also briefed the Committee on the “Review Principles for Assessment of Applications by Entities Subject to Carbon Fee for Recognition as Having High Carbon Leakage Risks,” announced in January 2026, and on the status of applications received. According to Ministry statistics, 212 facilities applied under the 17 designated industry categories announced, and 22 facilities applied under individual-case criteria, for a total of 234 facilities. The Ministry will subsequently form a review team together with the Ministry of Economic Affairs to conduct the review, which is expected to be completed by the end of April this year, so that entities subject to carbon fees can pay their carbon fees in May.

Regarding the emission reduction results and cost analysis brought about by the Self-Determined Reduction Plans, Ministry statistics show that the plans put forward approximately 2,781 reduction measures in total, expected to deliver annual greenhouse gas reductions of approximately 47.45 million metric tons of CO2e by 2030 (Year 119). The Ministry further explained that the carbon fee system was originally estimated to deliver emissions reductions of 37 million metric tons of CO2e — an estimate based on the conservative assumption that all entities subject to carbon fees would adopt the designated reduction targets under Appendix 2. In practice, approximately 67 facilities opted for the stricter reduction targets under Appendix 1, so the reduction results are expected to be even higher. A further breakdown of the reduction results by measure type shows that conversion to low-carbon fuels accounted for approximately 55%, process improvement and energy efficiency enhancement measures accounted for approximately 40%, and the use of renewable energy (including self-generated and self-consumed power as well as externally purchased green power) accounted for approximately 5%. Committee members also recommended that relevant cases be compiled and disclosed publicly in due course, to further encourage participation by Taiwan's industries in the carbon reduction transition.

In addition, the Ministry analyzed the cost of the reduction measures under the Self-Determined Reduction Plans. The analysis found that some of the reduction measures currently proposed already deliver a net economic benefit at negative cost — meaning that, once the costs are amortized, energy cost savings exceed installation, operating, and maintenance costs. This is mainly the case for measures such as energy efficiency enhancement and process improvement, demonstrating that the carbon fee system is indeed driving industries to more proactively adopt reduction measures that generate long-term economic benefits.

Committee members at this meeting also expressed strong interest in the disclosure of information relating to the Self-Determined Reduction Plans. The Ministry of Environment stated that it plans to publish the approved Self-Determined Reduction Plans in batches on its system by the end of February this year, including their reduction targets and the reduction measures adopted.

Finally, Committee members expressed strong approval and commendation for the rate at which entities subject to carbon fees have submitted Self-Determined Reduction Plans and for the results achieved, both of which have exceeded original expectations. Most members also emphasized the Committee's 2024 (Year 113) proposal on the fee rate trajectory — phased increases in two-year periods through 2030 — as well as the provision that the emission adjustment coefficient for high carbon leakage risk will be raised in phases going forward. They reminded industries to invest early in emission reduction to prepare for the medium- to long-term planning of the carbon fee system.