Minister of Environment Peng Chi-ming, accompanied by Taiwan Representative to the European Union and Belgium, Roy Chun Lee, led a delegation from the Climate Change Administration to the EU to conduct exchange on air quality governance, carbon emission trading, chemical substance management, circular economy, climate change and the Global Plastic Treaty, sharing Taiwan’s specific practices to implement carbon reduction.
Peng briefed EU's high level experts on Taiwan’s current progress, including trial implementation of carbon fees this year and full enactment in 2025. It also plans to launch full cap control and emissions trading within four years.
The Emission Trading System (ETS) established by the EU in 2005 is the most mature in the world with many stakeholders and plays a role in diplomacy, and thus can serve as a useful reference for Taiwan. Exchanges with the experts covered emission monitoring plans, inventory, inspection, total volume settings, emission quota allocations and auction, trading market structure and emission quota payments.
The MOENV plans a further delegation to Europe in 2025, drawn from academia, environmental organizations and industries to gain insight into carbon pricing to complete Taiwan’s regulations and facilitate follow-up legal implementation.
The EU’s carbon border adjustment mechanism (CBAM) is a tariff that targets carbon leakage in offshore production of imported goods to the bloc’s 27 member nations. It is currently in its transitional phase (2023-2026) with only selected industries including cement, iron, steel, aluminum, fertilizers, electricity and hydrogen subject to the tariff. After 2026 all imported goods will be subject to the tariff and Taiwan’s metal fastener, steel and aluminum industries are mainly affected.
In the transition period domestic industry has completed declarations with government guidance. After the EU CBAM is fully implemented, domestic carbon pricing will need to integrate with the EU and the MOENV stated that this visit determined through face-to-face discussion that Taiwan carbon fees can be deducted from EU CBAM certificates and detailed regulations for the deduction will be announced in mid-2025.
Due to the complexity of CBAM regulations, the MOENV will assign full-time personnel to the EU early next year to keep abreast of the latest developments and participate in negotiations to assist response by domestic industries.
Peng said the visit had established a robust communication channel that has given Taiwan more confidence and better understanding in the development of carbon pricing and the carbon fee first system, especially as domestic enterprises are very concerned about CBAM. The EU has also gained a clearer view of Taiwan's ambitions in climate change efforts as an important global technology supply chain. (POC-E)
Write to Taiwan Today at ttonline@mofa.gov.tw