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Taiwan Proposes Adding Loan Guarantees, Interest Subsidies to Carbon Fee Fund’s Permitted Uses

Taiwan’s environment ministry has opened public comment on a draft amendment that would let its Greenhouse Gas Management Fund be used to back loan credit guarantees and interest subsidies for companies undertaking emissions-reduction and climate-adaptation projects, according to the Climate Change Administration, part of Taiwan’s Ministry of Environment (MOENV). The pre-announcement, issued July 7, targets Article 4 of the regulation governing the fund’s receipt, custody and use, which was last revised by the Executive Yuan in January 2025.

The fund is financed primarily through carbon fee revenue and is classified as a special fund under Taiwan’s Budget Act, meaning its administration rules require Executive Yuan approval. MOENV said the proposed change is meant to lower credit risk for lenders and mobilize private capital through public-private cooperation, giving businesses a more concrete financing tool for reaching net-zero targets. Alongside the regulatory amendment, the ministry has also drafted separate implementing guidelines for the loan guarantee and interest subsidy scheme, which were discussed at a stakeholder meeting on June 18 and will inform the rule’s rollout.

Comment materials are available via MOENV’s news portal, with the draft also set to appear on the Executive Yuan’s official gazette site three days after the announcement. Feedback collected during the comment period will be incorporated before the measure is submitted to the Executive Yuan for final approval under Budget Act Article 21.

Carbon Market Context

  • The move reflects a broader pattern across Asian carbon-pricing jurisdictions of channeling carbon fee or levy revenue into transition-finance instruments — such as credit guarantees and subsidized lending — rather than direct grants, as governments look to leverage limited public funds with private capital for industrial decarbonization.

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