Taiwan implemented its carbon fee scheme in 2025 and collected the initial round of levies in 2026, amounting to approximately NT$4.9 billion. The carbon fee mechanism is structured to promote decarbonization rather than increase fiscal revenue. It employs differential rate structures, enabling regulated enterprises to retain resources for low-carbon investments instead of exclusively paying carbon fees. As a result, the first-year revenue is relatively modest compared to international carbon pricing schemes. Nevertheless, strategic allocation of this revenue remains essential for advancing Taiwan’s low-carbon transition.
In this context, the Ministry of Environment partnered with Josh Burke, Baran Doda, Trevor Laroche-Theune, Victor Alejandro Ortiz Rivera, and Professor Luca Taschini of the Grantham Research Institute on Climate Change & the Environment to produce the report titled Evolution of Carbon Pricing in Taiwan: Carbon Fee Revenue Use Options.
The report draws upon both theoretical and practical aspects of international carbon pricing. It first categorizes current uses of carbon pricing revenue according to their intended purposes. Subsequently, it analyzes selected international case studies to illustrate how mechanisms can be structured to achieve policy objectives. The report concludes by offering ten institutional recommendations tailored to Taiwan’s context.
A key objective of cross-institutional and cross-national collaboration is to synthesize global perspectives to inform local solutions. In this study, the Chung-Hua Institution for Economic Research served as the local collaborating team, providing institutional background and policy interpretations related to Taiwan’s carbon pricing. This support ensured that the outcomes of the collaboration align with Taiwan’s practical realities. Link to the report Evolution of Carbon Pricing in Taiwan: Carbon Fee Revenue Use Options. The report is also published on the official website of the London School of Economics and Political Science (LSE):