Taiwan Publishes Draft Principles for Reviewing Applications for Recognition of Businesses at High Carbon Leakage Risk 
On December 18, 2025, Taiwan’s Climate Change Administration under the Ministry of Environment released a draft of the Principles for Reviewing Applications for Recognition of Businesses at High Carbon Leakage Risk Subject to Carbon Fee Collection and opened it for public comment. The comment period lasts until Jan. 1, 2026.
Article 6 of the Regulations on Carbon Fee Collection stipulates that, to prevent carbon leakage caused by industrial relocation due to carbon fee collection, entities subject to carbon fees that have obtained an approved voluntary reduction plan and are recognized as belonging to industries with high carbon leakage risk may apply a preferential emission adjustment coefficient. The draft principles aim to clarify the qualifications, required documents, review process, and post-recognition management for such businesses.
Qualifications for Application
Businesses may apply for recognition as high carbon leakage risk if they meet any of the following qualifications:
- Belong to an industry listed in Annex 1 as high carbon leakage risk.
※Annex 1 includes 17 industries such as chemical raw material manufacturing, printed circuit board manufacturing, and computer and peripheral equipment manufacturing. - Carbon fees payable for the collection year account for 30% or more of gross profit, or the business has negative gross profit for that year.
- The main products are subject to anti-dumping duties announced by the Ministry of Finance.
- The business was significantly affected by U.S. reciprocal tariff policies between 2025 and 2026.
Required Documents for Application
The required documents vary by qualification. Businesses under qualification 1 (industries listed in Annex 1) need to submit the fewest documents:
- Documents approved by the competent authority regarding establishment, registration, or operation
- Documents related to the voluntary reduction plan approved by the Ministry of Environment
- Other documents specified by the Ministry of Environment
Businesses meeting other qualifications must submit the above documents plus a carbon leakage risk assessment statement and one additional specific certificate. For example, businesses under qualification 2 (carbon fees ≥30% of gross profit or negative gross profit) must provide:
- The same three documents as qualification 1
- Documents showing gross profit for the collection year
- Carbon leakage risk assessment statement
Application Deadline
Eligible businesses must submit application materials to the Ministry of Environment by January 31 each year. Extensions may be requested in cases of natural disasters or epidemics.
Preferential Carbon Fee for Recognized Businesses
Under Article 6 of the Regulations on Carbon Fee Collection (promulgated in 2024), businesses whose voluntary emission reduction plans pass review and are recognized as high carbon leakage risk may apply an adjustment coefficient to their emissions subject to carbon fees. In the initial phase, a coefficient of 0.2 applies, reducing payable carbon fees by 80%.
According to an article in Industrial and Commercial Times on Nov. 3, 2025, if China Steel Corporation qualifies as high carbon leakage risk, its carbon fee in 2026 is estimated at about NT$100 million. This figure is based on the following calculation:
NT$1.875 billion = (18.75 million tons CO₂e※a – 0※b) × NT$50/ton CO₂e※c × 0.2※d
- ※a: 18.75 million tons is the company’s 2024 GHG emissions
- ※b: 0 is the K-value for high carbon leakage risk businesses
- ※c: NT$50/ton CO₂e is the preferential rate A
- ※d: 0.2 is the first-phase emission adjustment coefficient
The full draft principles (in Traditional Chinese) are available at:
https://enews.moenv.gov.tw/page/3b3c62c78849f32f/daddbc32-3f9d-4407-98d1-164d86faa312
