Taiwan is planning its own CBAM and an emissions trading system, President Lai Ching-te said on 2 November. The country already charges large industrial emitters a carbon fee, and a border mechanism could add a charge to imported materials too.
For a Taiwanese steel processor, that could change the cost of buying steel from abroad. Its European customers already face the EU’s CBAM when importing covered Taiwanese steel products, so the processor could see carbon costs in both its feedstock price and the cost of selling into Europe. Lai did not give a launch date or final product list for Taiwan’s CBAM; whether imported steel will be covered is still to be settled.
How the fee reaches steel buyers
Taiwan’s carbon fee initially covers power and manufacturing businesses emitting more than 25,000 tonnes of carbon dioxide equivalent a year. The standard rate is NT$300 per tonne, with reduced rates of NT$50 or NT$100 for businesses whose approved reduction plans meet the corresponding targets. The rates took effect in January 2025, with payment for that year’s emissions due by May 2026.
A mill paying the fee may recover some of it through its steel price. A processor can therefore pay part of that carbon cost through the material invoice even if its own factory is below the threshold for paying the fee directly.
If Taiwan’s planned CBAM covers steel, buying from a foreign mill could also bring a carbon charge. That could narrow the cost gap between imported and locally made steel, while raising the processor’s input bill where the overseas supplier does not absorb the charge.
What happens when the steel goes to Europe
Taiwan’s Climate Change Administration estimates that around 2,600 Taiwanese businesses are affected by EU CBAM, using 2024 export data. Steel-related products account for most of the covered goods, at about 2.8 million tonnes.
EU rules allow carbon payments made abroad to reduce the number of CBAM certificates an importer owes. For deductions based on actual payments, the importer has to substantiate the carbon cost paid on the declared emissions, after rebates and compensation. Using the standard NT$300 rate for a mill paying NT$50 would overstate the amount available for that deduction.
An accepted deduction leaves the European importer buying fewer certificates. If the mill has passed its Taiwanese fee through in the steel price, however, the buyer pays some of the carbon cost in the supplier’s invoice and the remainder through EU certificates.
