57 Taiwan Sporting Goods Manufacturers Association demands, most major international suppliers can conduct carbon emissions inventory reports and product carbon footprint investigations. In contrast, SMEs, mainly those not subject to the regulated emitters under the CCRA below 25,000 tCO2e/year, might not been subject to comply with emissions inventory disclosure or net-zero emissions requirements in their trade conditions. Nevertheless, suppose their products’ CN code falls under the scope of the EU’s CBAM regulation (e.g., stainless steel frames or aluminum baseball bats). In that case, the manufacturers or traders must report and detail the embedded carbon emissions associated with production processes. Suppose the purchased precursor materials are also regulated products (e.g., stainless steel raw materials like steel rods, sheets, or coils). In that case, those materials’ emissions shall be reported from the country of origin for each production process. The calculation of embedded carbon emissions per tonne of the products shall be reported based on annual or fiscal year data (e.g., annual emissions of Product A (X tCO2e)/ annual production weight of Product A (tonnes)). However, this process would involve information disclosure in existing business contract obligations between suppliers and manufacturers, particularly regarding confidential product information. Manufacturers may need to work closely with their suppliers to ensure the necessary information to comply with the CBAM regulation’s reporting requirements and apply better supply chain management and sourcing strategies. The Taiwan Ministry of Environment (Taiwan MOENV) will soon levy the carbon fee as a carbon pricing instrument based on the certified direct and indirect GHG emissions inventory data from regulated emitters in the previous year. Following the GHG emissions inventory information gathering, verification, error correction, and carbon fee determination every year, the manufacturers still need a subsequent process to re-calculate and certify the “carbon price” coverage for all products. However, in line with the CBAM emphasis on avoiding double taxation between trading economies for any specific product, Taiwan’s products may be subject to higher carbon price coverage due to including both direct and indirect emissions within the levying scope of the carbon fee for the EU’s importers. In turn, it allows for greater financial deductions in carbon border adjustment, enhancing the overall price competitiveness of products exported to the EU. However, the practical challenge remains whether businesses can manage the complexity of converting and providing relevant supporting documents within a limited timeframe. From the perspective of the Taiwan MOENV, the annual GHG emissions of a manufacturing facility will serve as the basis for carbon fee calculation. In conducting CBAM declaration, companies need to reallocate embedded carbon emissions in each product and align with the CBAM reporting scopes, leading to complexity in recertification and accounting processes. Meanwhile, “complex products” that involve domestic or imported purchased precursor
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