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Taiwan's Next Steps in Carbon Pricing: A Dialogue Between Minister Peng and German Expert

Release Date : 2026-09-15

The Ministry of Environment (MOENV) held a press conference today (15th) titled "Taiwan’s Next Steps in Carbon Pricing: A Dialogue Between Minister Peng and German Emissions Trading Expert Dr. Jürgen Landgrebe." Minister Peng Chi-ming and MOENV Advisor Dr. Jürgen Landgrebe outlined the policy direction for Taiwan's transition from carbon fees to a Cap-and-Trade Emission Trading System (ETS). MOENV stated that Taiwan's carbon fee system officially launched in 2025 with its first levy completed. Moving forward, Taiwan will adopt a dual-track approach combining carbon fees and ETS. Through phased pilots, capacity building for enterprises, and market infrastructure development, carbon pricing will drive substantive emission reductions and industrial transformation.

Minister Peng Chi-ming noted that establishing Taiwan's carbon fee system was a major challenge, requiring a balance between decarbonization goals, industrial competitiveness, and social acceptance. Carbon fees provide stable and predictable pricing, whereas ETS sets a total cap and lets market trading determine the price, aligning mitigation efforts more closely with national targets. The ETS pilot is planned to initially engage major emitters with existing voluntary reduction plans to build institutional experience ahead of scaled-up decarbonization efforts post-2030.

Minister Peng asked Dr. Jürgen to address three key international insights:

1. Is adopting ETS or a dual-track system becoming the preferred policy direction globally over carbon fees/taxes alone?

2. Does ETS provide a stronger driver for large-scale net-zero transition by leveraging green finance—especially by enabling businesses to treat allowances as carbon assets and encouraging financial sector participation?

3. Can ETS facilitate international carbon market linkages better than carbon fees or taxes?

Dr. Jürgen noted that Taiwan has built a solid foundation with GHG inventory, verification, and carbon fee systems, making it ready for the next phase. However, ETS implementation is an evolving process requiring continuous adjustments to caps, allocations, and market rules during the pilot, alongside stakeholder communication to build trust. He highlighted that ETS is shifting from "cap and trade" to "cap and invest." For Taiwan, effective auctioning and revenue recycling can transform carbon pricing from mere price signals into vital funding for green technology and industrial transformation.

Dr. Jürgen further emphasized that ETS effectiveness hinges on aligning caps with reduction pathways, ensuring appropriate allowance allocations, and establishing robust market stability mechanisms. Compared to carbon taxes or fees, ETS frameworks with similar caps, MRV systems, and market rules offer greater potential for international linkage. System linkages broaden compliance options for enterprises, improve market liquidity, and aid price discovery. Early institutional capacity building will help Taiwan align with global carbon markets.

Regarding the roadmap, MOENV plans to propose a draft ETS pilot scheme by the end of this year, complete system design and enterprise readiness next year, and launch the Taiwan ETS pilot by 2028. Currently, MOENV is conducting expert consultations and stakeholder discussions to formulate concrete proposals for core issues, including regulatory scope, cap setting, allowance allocation, and market operations. Workshops and carbon market simulations will also be organized to help enterprises build operational capacity.

During the conference, MOENV Advisor Professor Shih Wen-chen from National Chengchi University explained the core principles and framework of ETS, while Chen Hsiu-wen, General Manager of the Taiwan Carbon Solution Exchange (TCX), presented progress on market infrastructure. The Taiwan ETS trial auction platform, developed jointly by TCX and the European Energy Exchange (EEX), is scheduled to go live in late November. Subsequent developments will focus on trading and registry systems, accompanied by process verification and operational testing. MOENV stressed that it will continue to deepen international cooperation and domestic dialogue, advancing system design, enterprise capacity, and market infrastructure to refine Taiwan's carbon pricing mechanism, supporting industrial low-carbon transition and global competitiveness.

Source: https://enews.moenv.gov.tw/moenv-news/zh-tw/News/14112
Photo by: Ministry of Environment News
Written by: Ministry of Environment News
Date: 2026.9.15