Environmental Impact Assessment: Taiwans climate progress goes largely unnoticed

While China’s emissions may be stabilizing, Taiwan’s economy is producing far less carbon per dollar of output — even as its manufacturing sector keeps growing

• By Steven Crook / Contributing reporter

Last month, media outlets including the BBC World Service and Bloomberg reported that China’s greenhouse gas emissions are currently flat or falling, and that the economic giant appears to be on course to comfortably meet Beijing’s stated goal that total emissions will peak no later than 2030.

China is by far and away the world’s biggest emitter of greenhouse gases, generating more carbon dioxide than the US and the EU combined. As the BBC pointed out in their Feb. 12 report, “what happens in China literally could change the world’s weather.”

Any drop in total emissions is good news, of course. By a different metric, however, China’s progress hasn’t been nearly so impressive.

Because total emissions tend to increase whenever there’s a boom, then shrink when the economy slumps, experts regard carbon intensity, which reveals how much CO2e is emitted for a given amount of economic activity, as a better indicator. Taiwan’s per capita emissions are a bit higher than China’s, yet recent figures indicate that it is responsible for CO2e emissions of less than 0.19 metric tons per US$1,000 of GDP. To produce output of the same value, China’s economy adds at least 0.41 metric tons of CO2e to the atmosphere.

Taiwan’s carbon intensity is as low as Japan’s and below that of South Korea (estimated at 0.21 to 0.23 metric tons), a country whose development trajectory mirrors that of Taiwan. Of course, international media isn’t likely to highlight this fact, or that Taiwan’s total emissions posted year-on-year declines in 2022, 2023, 2024 and last year, despite economic growth in those years of 2.59 percent, 1.28 percent, 4.59 percent and 8.63 percent, respectively. The rollout of renewables is one factor; burning large amounts of gas rather than coal is another.

According to the most recent edition of the Global Carbon Budget (GCB, published Nov. 13, 2025), Taiwan is one of 35 countries that have “decreased their fossil CO2 emissions significantly…while growing their economies in the decade 2015-2024.” The list includes South Korea and the US, but neither China nor Japan.

By “significantly,” the scientists who collaborated on the GCB report mean they’re at least 95 percent certain that the reduction is due to government policy and technological improvements, not economic malaise or sheer luck (for example, agreeable weather lessening demand for heating or air conditioning).

Over half of the 35 are European nations which have seen many of their carbon-intensive industries, such as steelmaking, relocate to Asia. The decline in Taiwan’s carbon intensity, which in 2010 was north of 0.23 metric tons of CO2e per US$1,000 of GDP, is especially impressive because the country’s industrial structure continues to be heavily weighted toward energy-intensive manufacturing, most famously semiconductors.

EXTERNAL PRESSURES

Independent of any climate-related motivations, export-dependent economies like Taiwan don’t have a great deal of choice when it comes to reducing their greenhouse gas emissions.

Since Jan. 1, the EU’s Carbon Border Adjustment Mechanism (CBAM) has increased costs for non-EU suppliers of aluminum, iron, steel, fertilizers, cement and related commodities. From 2028 onward, the scope of the mechanism will be greatly expanded to include downstream products like appliances, auto parts, cookware and cutlery, and heat sinks for CPUs.

The CBAM has been described as “a financially binding carbon border tax” that aims to level the playing field between EU manufacturers (who pay for their emissions under the EU’s Emissions Trading System) and non-EU manufacturers who might not face similar carbon-pricing costs.

EU Carbon Permits are financial instruments, bought and sold not only by companies such as steel mills that must purchase them if they’re to comply with EU rules, but also by hedge funds and other speculators. At the end of last month, the market price of a permit representing the right to emit one metric ton of CO2e was just under 70 (US$82.30 or NT$2,593).

Since the start of this year, certain Taiwanese enterprises have been required to pay carbon fees based on their greenhouse gas emissions last year. The standard rate is NT$300 per metric ton, and those who’ve been working to cut their emissions under Ministry of Environment supervision enjoy steep discounts.

The CBAM allows exporters to deduct any carbon costs already paid in their home country, but if Taiwan’s rates remain low, local businesses will still have to pay a substantial additional amount to the EU when shipping to European markets. Upping rates would keep that revenue within Taiwan, but quadrupling it (as some propose) might undermine companies’ ability to invest in the technologies they need to adopt if they’re to become green enough to survive long term.

Last year, the BRICS grouping of countries denounced the CBAM as “unilateral, punitive and discriminatory protectionist measures [being made] under the pretext of environmental concerns.” At the same time, some in the EU say the carbon-pricing mechanism might unintentionally cause greater emissions by undermining the continent’s eco-friendly manufacturers — and it isn’t the only feature of the international trade landscape that worries some environmentalists.

TRUMP AND PUTIN

A guest post published by Carbon Brief (Feb. 12), analyzing the apparent plateauing of China’s greenhouse gas emissions, noted that while emissions attributed to the energy, transportation and metals sectors all fell in the 2024-25 period, the biggest drop was associated with the production of cement and other building materials. There can be no doubt that China’s ongoing property sector crisis has helped rein in emissions.

The post went on to say that, while almost every part of China’s economy reduced its emissions last year, the chemicals industry was a notable exception. Rising consumption of coal (up by 15 percent) and oil (up 10 percent) inflated the sector’s greenhouse gas emissions.

This surge has been linked to China boosting its production of ethylene, a hydrocarbon gas which is a key building block for a huge variety of plastics. Until recently, China took a third of the US’s ethylene exports and almost half of its ethane exports. (Ethane can be turned into ethylene). The US has an abundance of ethane — a byproduct of natural gas fracking — so it’s extremely difficult for Chinese producers, who make ethylene from oil or coal, to compete on price. However, trade tensions since US President Donald Trump’s return to office are driving Beijing to reduce its dependence on American suppliers.

Rather than buy shipments of ethane and/or ethylene, Taiwan has focused on “cracking” naphtha (a liquid derived from crude oil) into ethylene and other valuable byproducts. The carbon footprint of this process is about double that of turning ethane into ethylene, but Taiwan currently lacks the infrastructure, such as specialized terminals, for large-scale imports of liquid ethane. Change is on the horizon, however: Formosa Petrochemical Corp is retrofitting one of the crackers it operates at Mailiao (麥寮) in Yunlin County so it can handle ethane feedstock from next year.

Notoriously, Formosa Petrochemical was until recently the world’s largest importer of Russian naphtha, taking nearly 90 percent of its total supply from the country that invaded Ukraine. The company — part of the Formosa Plastics Group, which is responsible for around 15 percent of Taiwan’s total greenhouse gas emissions — is believed to have spent around US$4.7 billion on Russian naphtha since early 2022.

Negative publicity (including CNN reports on Oct. 2 and Oct. 9 last year) prompted Formosa Petrochemical to say it’d stop buying Russian naphtha as soon as its contracts expire. Some Taiwanese enterprises still import coal from Russia, however, apparently because it’s cheap. For the sake of short-term financial savings, those companies are risking their reputations. Global markets are more transparent than ever, and a supply chain that’s dirty (in the environmental or the ethical sense) is often a liability that no discount can fully offset.

Steven Crook, the author or co-author of four books about Taiwan, has been following environmental issues since he arrived in the country in 1991. He drives a hybrid and carries his own chopsticks. The views expressed here are his own.