Fri, Oct 06, 2023 page3

• Ministers grilled about rollout of tax for carbon

  • Staff writer, with CNA
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  Legislators on Wednesday questioned ministers about the schedule for the rollout of carbon fees and potential effects on local enterprises.

  The Ministry of Environment has said that carbon fees are to start in 2025, with levies based on the amount of carbon that enterprises emit next year.

  In this phase, only 512 enterprises that emit more than 25,000 tonnes annually would be subject to the fees.

  

  Minister of Environment Shieu Fuh-sheng attends a question-and-answer session at a legislative committee in Taipei on Wednesday.

  Photo: Tien Yu-hua, Taipei Times

  The rate has not yet been determined, but a “preferential rate” is to be provided to companies that voluntarily make an effort to cut carbon emissions.

  Democratic Progressive Party (DPP) Legislator Hung Sun-han (洪申翰) asked whether the preferential rate would produce “haggling” between firms and the ministry.

  Carbon pricing is a tool to “shift the burden for the damage back to those who are responsible for it, and who can reduce it,” Hung said, citing the World Bank.

  The global trend is to attribute a higher social cost to greenhouse gases, Hung said, citing a report late last year by the US Environmental Protection Agency showing that the cost had risen to US$190 from US$51.

  When the Climate Change Response Act (氣候變遷因應法) was amended, Article 29 — which describes the preferential rate — was the most controversial clause, he said.

  “An explanation was added to the article specifying the standard to qualify for the preferential rate, in which an SBTI [science-based target initiative] was cited,” Hung said, adding that an objective and quantifiable standard is required.

  SBTI is a partnership between international nonprofit organization the Carbon Disclosure Project, the UN Global Compact, the World Resources Institute and the World Wide Fund for Nature.

  It aims to push the private sector to reduce greenhouse gas emissions and provides criteria for companies to do so.

  Hung asked Minister of Environment Shieu Fuh-sheng (薛富盛) to commit to taking SBTI into account when setting the preferential rate, which has not yet been announced, to which the minister responded positively.

  Hung expressed doubt over the possibility of “green inflation” from carbon fees, an issue raised by Shieu in a media interview.

  “To avoid green inflation, what we should do is not lower carbon fees, which is a responsibility emitters should bear,” Hung said. “We can consider other financial measures such as [the Inflation Reduction Act] employed by the US government that rolls out incentives for enterprises to have greener products or plans.”

  Chinese Nationalist Party (KMT) Legislator Chang Yu-mei (張育美) told Shieu that as the transition period for the EU’s Carbon Border Adjustment Mechanism (CBAM) officially started on Sunday, “we certainly want our companies to pay fees within our border rather than pay tariffs to other countries.”

  According to Ministry of Economic Affairs, Taiwan is to be affected by 212 of the 248 product categories subject to CBAM, Chang said.

  “So small and medium-sized enterprises [SMEs] should be prepared as well,” she said.

  The 512 “big emitters” in Taiwan account for about 70 percent of carbon emissions and they are the upstream companies whose carbon reduction efforts would be required to include their SME suppliers, which is why the big emitters are to be the first in the carbon fee scheme, she said.

  Minister of Economic Affairs Wang Mei-hua (王美花) addressed DPP Legislator Tsai Pei-hui’s (蔡培慧) inquiries over SMEs’ anxiety about international requirements over carbon reduction.

  “There are only about 16 certified [carbon reduction] verification institutions for more than 100,000 [manufacturing SMEs] in the country,” Tsai said.

  SMEs are not subject to the planned carbon fee collection, Wang said, but added that her “ministry has helped establish an Industrial Carbon Neutrality Alliance, in which major enterprises are taking the lead to help SMEs cut carbon emissions in their supply chains.”
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