Taiwan’s MOENV Announces Review Principles for Designating Businesses at High Risk of Carbon Leakage 
On January 12, 2026, Taiwan’s Climate Change Administration under the Ministry of Environment announced the Principles for Reviewing Applications for Designation of Businesses at High Risk of Carbon Leakage Subject to Carbon Fee Collection. The principles took effect immediately upon promulgation.
Article 6 of the Carbon Fee Collection Regulations stipulates that, in order to prevent carbon leakage caused by industrial relocation following the collection of carbon fees, businesses may apply for approval of a voluntary reduction plan from the central competent authority. If the business is subsequently recognized through review as operating in an industry with a high risk of carbon leakage, a preferential emission adjustment factor may be applied.
The newly issued principles were established to govern the designation of businesses considered at high risk of carbon leakage, and specify application eligibility, required documents, review procedures, and post‑approval management.
Eligibility for Application for Designation as a Business at High Risk of Carbon Leakage
Businesses meeting any of the following eligibility may apply for the designation:
- Businesses belonging to industries listed in Annex 1 as having a high carbon leakage risk.
Annex 1 includes 17 industries, such as chemical raw materials manufacturing, plastic and synthetic rubber raw materials manufacturing, printed circuit board manufacturing, optoelectronic materials and components manufacturing, computers and peripheral equipment manufacturing, and data storage media manufacturing. - Businesses whose payable carbon fees for the collection year account for 30% or more of their corporate gross profit, or whose gross profit is negative for the collection year.
- Businesses whose primary products are subject to anti-dumping duties announced by the Ministry of Finance.
- Businesses significantly affected by the U.S. “equal tariff” policy during 2025–2026.
Required Documents for Application
Different sets of documents are required depending on which eligibility criteria apply.
Businesses meeting Eligibility 1—those operating in industries listed in Annex 1—have the fewest required documents. They must submit:
- Documents related to establishment, registration, or operation that have been approved by the competent authority of the relevant business sector.
- Proof of approval for the voluntary emission reduction plan issued by the Ministry of Environment.
- Any additional documents designated by the Ministry of Environment.
Businesses meeting Eligibility 2 (carbon fees ≥ 30% of gross profit or negative gross profit) must submit:
- The same three documents are required under Eligibility 1.
- Documents showing the corporate gross profit of the business for the collection year.
- A carbon leakage risk assessment report.
Application Deadline
Eligible businesses must submit application materials to the Ministry of Environment by January 31 each year. However, extensions may be requested if timely submission is prevented by natural disasters, epidemics, or other justified causes.
For the inaugural year of the system (2025), businesses that submitted voluntary reduction plans by June 30, 2025, but did not receive approval by December 31, 2025, may submit the application for the voluntary reduction plan as a temporary substitute for the approval documents. The official approval documents must then be submitted by April 30, 2026.
Preferential Carbon Fees for Businesses Designated as High Risk
Article 6 of the “Carbon Fee Collection Regulations,” promulgated in 2024, states that when a business’s voluntary emission reduction plan passes review and the business is designated as being at high risk of carbon leakage, an adjustment factor is applied to the emissions subject to carbon fees. In the initial stage, an adjustment factor of 0.2 applies, effectively granting an 80% reduction in carbon fees payable.
The full Chinese (Traditional) version of the principles is available at the following URL:
https://gaz.ncl.edu.tw/downFile.jsp?flag=P&sysid=E2601442
