A leading steelmaker in South Taiwan revealed its plan to implement a carbon surcharge of NT$150 per ton (equivalent to $4.63) for new orders scheduled for delivery in January 2024. Another rebar manufacturer in the region also made a similar announcement on November 9th for deliveries in January 2024.
Taiwan is set to impose a carbon emission tax starting in January 2024, but the exact tariff has not been announced by the country's Ministry of Environment. Some steel facilities in South Taiwan have committed to refund excess charges to customers if the final tariff is set below NT$150 per ton. However, they will require additional payment from customers if the tariff exceeds NT$150 per ton.
Steel producers across the island have not yet shown a similar intention to implement carbon surcharges. For instance, benchmark scrap price setter Feng Hsin in Central Taiwan stated that it would not introduce a carbon fee for the time being and would await further announcements from local authorities regarding the carbon fee.
In August, the Ministry of Environment announced that 512 companies exceeding 25,000 tons per year of CO2 emissions would be subject to a carbon emission tax in 2024, based on their emissions for the current year.
Some market participants believe that a NT$150 per ton carbon tax is almost negligible and will likely be disregarded in the near future. However, others think it will further weigh on already suppressed scrap and steel sales.
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