55 Taiwan Sporting Goods Manufacturers Association al phase of its EU CBAM, set to officially start in 2026, which will regulate the financial adjustment of imported CBAM goods, while the UK is also expected to initiate its UK CBAM for regulated imported CBAM goods in 2027. However, the primary sports goods such as footwear (CN code: 6402, 6403, 6404); sportswear and swimwear (CN code: 6112, 6211); and balls, articles and equipment, golf goods, water sports, and racquet sports (CN code: 9506) are not yet directly regulated under the EU and UK CBAM schemes, meaning that for importers in Europe and the UK, there is currently no need to concern about additional carbon tariff costs on sports goods imported from Taiwan. However, potential direct and indirect impacts should be considered for Taiwan’s manufacturers. While the Taiwan government will levy carbon fees on regulated main emitters under Article 28 of the Climate Change Response Act, in the future, Taiwan may also apply the ‘Carbon Border Adjustment Mechanism’ (i.e., Taiwan CBAM) on regulated imported products or raw materials under Article 31 of the Act. According to the WTO’s national treatment and non-discrimination principles, although Taiwan has not yet declared what CBAM goods may be included, the high carbon leakage products categorized from regulated sectors such as iron and steel, aluminum, plastics, synthetic fibers, and glass are potentially concerned for further border adjustments control. Therefore, Taiwan sports goods manufacturers or subcontractors could foresee a potential cost increase of carbon border adjustments under the ‘Taiwan CBAM,’ affecting the production cost structure. Furthermore, in the future, the production cost changes resulting from the implementation of the Taiwan CBAM will further squeeze the already sensitive bargaining space in the EU and UK, which account for about 40 percent of the global sports goods trade market, and threaten international competitiveness. Fulfilling preparation from supply chain net-zero decarbonization to Scope 3 disclosures International sports goods manufacturing is diverse and detailed. Taiwanese firms usually serve as subcontractors or processors for major international manufacturers in the industry’s overall value chain. Therefore, given the changes driven by the carbon border adjustments, the pivotal shift is focused on the management requirements for embedded carbon emissions related to ‘raw materials’ (i.e., precursors), which are to be regulated and
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