An update on Taiwan's Carbon Solution Exchange
03 June 2024
Jessie Lee, Partner at AGA member firm Caliber CPAs in Taiwan provides an update concerning the recently launched Taiwan Carbon Solution Exchange (TCX).
Following the inauguration of Taiwan’s first carbon credit transaction platform, launched to achieve Taiwan's 2050 Net-Zero Goals, Taiwan will levy the carbon fee from 2025. Enterprises that emit more than 25,000 metric tons of carbon per year will be required to pay these fees, the amount of which will be determined by calculations undertaken in 2024.
The Taiwan Carbon Solution Exchange (TCX) offers two main pillars for domestic carbon credits. The Voluntary Emission Reduction Project allows enterprises to transfer, trade, and auction publicly and transparently to those who need to offset carbon fees or meet the offset plan requirements.
Secondly, the application of the GHC Offset Emissions Plan offers several carbon reduction measures for enterprises to obtain offset quotas. These offset quotas can be used for the environmental impact assessment requirements of new or changed emission sources by the business.
In order to address the needs of ambitious carbon neutrality goals in the supply chain and action plans of global brand enterprises, TCX buys high-quality carbon credits from the international market. Companies are now able to open accounts for international carbon credit purchases on the platform and according to the draft act proposed, international carbon credits can be used to offset carbon fees at 5% cap, as per the policy in Singapore.
Despite this, many countries have chosen a carbon "tax" or cap-and-trade system to tackle the issue. To align with international standards and attain Net-zero, Taiwan will continue to evolve its carbon tax system. As carbon fees increase, they will need to be classified as a tax to ensure proper utilization and allocation of financial resources. It is essential to turn carbon fees into carbon taxes.
For more information click here Jessie Ching-Yi Lee李靜怡 or email jessie@alliott.com.tw
Further reading:
Taiwan's carbon exchange inauguration
About Caliber CPAs:
As AGA's representative CPA firm in Taiwan, Caliber is a full service accounting firm with an international perspective.
The team at Caliber are dedicated to providing clients with business solutions for current finance, taxation and accounting issues as well as offering strategies for success in the future. Read more here.