Taiwan Passes Climate Law With 2050 Net Zero Goal and Carbon Fee Scheme

Lawmakers in Taiwan have passed a climate bill that seeks to establish a carbon fee system for large emitters and sets a goal of reaching net-zero emissions by 2050.

The “Climate Change Response Act” was initially approved by the Cabinet in April of last year and passed its third and final reading on January 10, following consultations by ruling and opposition party lawmakers.

The work to implement the legislation and emissions targets will be led by the Executive Yuan's National Council for Sustainable Development, which will coordinate with central government agencies and other stakeholders to draft climate "action plans."

The plans will be reviewed a minimum of every four years and be implemented by local governments, according to the legislation.

The new Act states that the net-zero goal be introduced in phases as a mechanism to collect carbon fees on "direct", and later "indirect" emissions from entities whose emissions reach a certain threshold. The system will likely take effect from the beginning of 2024.

In terms of incentives, the act will allow companies to apply for carbon fee discounts if they switch to using low-carbon fuel, adopt carbon-negative technologies, or use renewable energy sources to reduce their emissions.

Meanwhile, all revenues from the carbon fee system will be placed into a "Greenhouse Gas Management Fund," which will be used for such purposes as subsidizing corporate investment in carbon reduction technologies and reimbursing local governments for climate policy-related costs.

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