Taiwan eyes local CBAM to shield industries

Mysteel: Taiwan is preparing its own version of the Carbon Border Adjustment Mechanism (CBAM) to protect local industries from the impact of importing carbon-intensive products, Mysteel Global learnt from a report by Taipei media outlet CNA on 14 October.

Taiwan's environment minister, Peng Qiming, stated that details of the mechanism will not be finalised until mid-2025. The Ministry of Environment is collaborating with the ministries of economy and finance to shape the policy. Taiwan has also been in discussions with EU and Japanese regulators to ensure that its carbon levy aligns with international standards.

As a highly export-oriented economy, implementing a carbon fee would benefit Taiwan's local industries in the long run by encouraging efforts to reduce carbon emissions, Peng emphasised.

He also noted that many enterprises, as seen in their ESG reports, have shown more ambitious carbon reduction goals than the government's current plans. For instance, some companies aim to cut emissions by 40% by 2030, surpassing the national target of approximately 24%.

The push for the mechanism follows a recommendation made by a government review committee on 7 October to set a basic carbon fee of TWD 300/tonne (t) ($9.3/t). The committee also proposed preferential rates of TWD 50/tCO2 and TWD 100/tCO2 for companies that meet specified emissions reduction targets.

Starting in 2026, the carbon fees will only apply to companies emitting more than 25,000 t of carbon annually, according to the Ministry.

The EU's CBAM, which serves as a model, is currently applied to imports of certain carbon-intensive goods and precursors at high risk of carbon leakage, such as cement, iron and steel, aluminium, fertilisers, electricity, and hydrogen.

Note: This article has been written in accordance with a content exchange agreement between Mysteel Global and BigMint.