CBAM and Taiwan: What China Steel Corporation and Taiwan's Industrial Exporters Must Do

Taiwan CBAM Exposure by Sector

China Steel Corporation — Taiwan's Single Largest CBAM Exposure

China Steel Corporation (CSC, often called Taiwan Steel to disambiguate from PRC entities) operates an integrated BF-BOF complex in Kaohsiung with capacity around 12–13 million tonnes per year. EU-bound exports are approximately 1.0–2.2 million tonnes annually across hot-rolled coil, cold-rolled coil, and specialty grades. As an integrated BF-BOF site with modern but ageing equipment, CSC's actual embedded emissions are close to the EU default (1.95–2.15 tCO2/t actual versus 2.18 default). The CBAM saving from documenting actuals is small per-tonne but significant in absolute terms given the volume — EUR 2–15 million annually. CSC is investing in carbon capture pilots and electric arc furnace addition; the CBAM verification trail is the audit record for those investments.

The Taiwan Carbon Fee and CBAM Equivalence Question

Taiwan's Climate Change Response Act 2023 introduced a domestic carbon fee starting at NT$300/t in 2025, scheduled to rise gradually. The fee covers approximately 500 large emitters including all major CBAM-relevant facilities. At current rates (about EUR 9/tCO2), the fee is well below the threshold for CBAM Article 9 deduction. The substantive question is whether the fee will rise enough — and whether Taiwan will pursue formal equivalence — to gain meaningful CBAM offset by 2027–2028. Most analysts assume not before 2030.

Why Taiwan's CBAM Story is Different from PRC China's

Three structural differences. First, Taiwan is treated as a separate customs territory by the EU — Taiwan-origin goods are evaluated independently of PRC origin, which matters for CBAM declarations and for the EU buyer's audit trail. Second, Taiwan's grid emission factor (~0.51 tCO2/MWh) is lower than mainland China's (~0.85 tCO2/MWh) due to higher gas share, lowering aluminium/electricity-intensive sector actuals. Third, the political and economic separation means Taiwan exporters are less exposed to any potential EU action on PRC dumping in CBAM-covered sectors. The combined effect is that Taiwan exporters generally see better CBAM economics than mainland Chinese counterparts.