[Opinion] Taiwan’s Climate Change Response Act: Key Points, Concerns, and 2023 Lookout

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TWYCC Taiwan Youth Climate Coalition（台灣青年氣候聯盟）

2 min readMar 5, 2023

On January 10, Taiwan Legislature passed the highly anticipated “Climate Change Response Act,” an amendment to the “Greenhouse Gas Reduction Act” enacted in 2015.

The act formally established the country’s net zero climate target by 2050. Various “carrots and sticks” measures will be introduced to regulate the emissions and encourage low-carbon economic development, including emissions reduction quotas and using carbon fees.

Taiwan is one of a handful of countries in Asia that has passed a law with a net-zero climate target. The government has shown a response to the international trend of tackling climate change with increasingly stringent legal instruments.

Key points:

The new climate act covers issues on not only mitigation, but also adaptation, carbon fees, and incentives for the development of low-carbon technologies.
Emissions reduction targets will be announced for different stages and the “direct” and “indirect” emissions will be regulated.
Carbon fees will be collected from entities with emissions reaching certain thresholds.
Collected carbon fees will be placed into a “Greenhouse Gas Management Fund,” which will be used for mitigation and adaptation activities.
The “National Council for Sustainable Development” of the Executive Yuan will be the coordinator of matters encompassed in the act.
The concept of “just transition” is incorporated into the new act.

What requires attention:

Carbon Fees or Carbon Credits?

Entities that exceed the allocated emissions quota will be allowed to use offset projects to receive quotas, while no more than 10% of the total emissions can be offset. It is unclear if companies will be more incentivized to buy offsets if the price of credits is much lower than the carbon fees.

Offset Projects

The offset projects allowed under the act include GHG reduction projects and GHG removal projects. However, using GHG reduction offset credits for a net-zero target is not recognized by international guidelines like the SBTi Net-Zero Standard and ISO Net-Zero Guidelines. Allowing the use of such credits could reduce the credibility of the country’s net-zero claim.

Carbon Tax

The EPA said that a carbon fee system might be followed by a carbon tax system if appropriate. However, it is currently unclear if the system should be planned, and which government agency would be the coordinator.

What to expect in 2023:

12 subsidiary regulations are expected to be proposed within the year’s first half. The prioritized topics include carbon fees, carbon accounting, and the GHG Management Fund.

While keeping an eye on the subsidiary regulations of the act, we should also continue to closely follow the international regulatory trend on companies’ GHG emissions, disclosure, and management.