Taiwanese exports to the EU are unlikely to suffer from higher carbon credit prices in the bloc. That’s according to a statement from the Economics Ministry on Thursday. Many were alarmed when the EU’s carbon credits broke EU$100 per ton of carbon for the first time on Tuesday.
The ministry says as gas prices have risen following Russia’s invasion of Ukraine last year, European energy producers have been increasingly relying on coal. Because coal emits more carbon dioxide than natural gas, producing the same amount of energy requires more carbon emissions. That causes demand for carbon credits to rise, which in turn raises their price.
The rising carbon prices caused some to fear Taiwanese exports to the EU would also become more expensive, hurting their competitiveness. The EU’s Carbon Price Adjustment Mechanism will force importers to report and pay for the emissions tied to their products.
The Economics Ministry says Taiwanese exports to the EU are still exempt from the mechanism until 2026, meaning short-term changes to carbon prices will not affect them. It adds the mechanism will be slowly implemented over time, and Taiwanese exporters will only have to pay low carbon prices at first.
The ministry adds Taiwan is a trade-oriented country, and managing its transition to net-zero carbon emissions is key to maintaining international competitiveness.