Taiwan’s Ministry of Environment plans to pilot a dual-track system in 2026, combining carbon fees with total emissions caps and an emission trading system. (Image: iStock)
Taiwan launched its carbon fee regime this year, with formal collection scheduled to begin in 2026. As part of the Ministry of Environment’s roadmap, a dual-track mechanism combining a carbon fee and an emissions trading system (ETS) is set to be piloted next year.
In an interview with RECCESSARY, Minister of Environment Peng Chi-ming (彭啓明) acknowledged that a carbon fee of TWD 300 per ton is insufficient to trigger large-scale corporate decarbonization or stimulate green finance. Only a market-based carbon pricing mechanism, he said, will unlock green finance.
Yet, translating this dual-track policy into practice presents challenges. Experts have identified three key hurdles the government must address. China Steel Corporation (CSC), a member of the Ministry’s “Green Pioneer Alliance,” also offered recommendations for both the pilot phase and eventual rollout of the dual-track mechanism.
Dual-track carbon pricing aims to strengthen financial leverage for corporate decarbonization
To complete Taiwan’s ETS framework, Minister Peng led a delegation of corporate representatives to Germany in June to observe its EU ETS operations. The Ministry plans to launch the pilot phase of ETS next year, with full implement of both carbon fees and ETS expected by 2027 or 2028.
Meanwhile, Taiwan Carbon Exchange has signed a Memorandum of Understanding with the European Energy Exchange (EEX), leveraging EEX’s experience operating the EU ETS.
Minister Peng explained that the move toward a dual-track mechanism that combines carbon fees and ETS was driven by the varying levels of awareness and capacity among businesses. “Some companies have set their internal carbon prices as high as USD 300, while others already see TWD 300 as too steep,” he said.