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Premier stresses need to improve energy policy amid tax dispute

Premier Sean Chen stressed the need to make an improved energy policy yesterday as industry leaders urged the government to postpone a plan over industry energy taxes.

Chen made his point in a speech delivered at a forum gathering government officials and industry leaders to discuss Taiwan's energy policy.

He noted that Taiwan relies on imports for over 99 percent of its energy and average energy consumption per person is high.

"A strong energy policy is vital for the nation as it closely related to national security, economic development, environmental protection and a sustainable environment," Chen told the meeting.

The meeting touched on several issues, such as the future of the nation energy structure, a stable electricity supply, renewable energy development, carbon reductions and nuclear power.

But special attention was given to the government's plan to introduce energy taxes.

Many industry leaders urged a halt to the tax plan to avoid the adverse impact it may have on consumer prices, particularly given the current economic downturn.

Others said the tax proposals should be set aside until a more thorough plan can be devised. They said the government should carefully study the cases of other developed countries before finalizing its own version.

Many of them said that energy-related products, such as naphtha, that are used as industrial materials, should be exempted from the energy tax.

The Finance Ministry said that the energy taxes are not meant to increase government income.

The creation of the tax will take into consideration possible impacts on the competitiveness of industries, the ministry said.

It also pointed out that a consensus has long existed that no energy tax will be levied on energy products that are used as industrial materials.

A common point industries have been making is that Taiwan must not become an economy with high energy costs, which they say will undermine the nation's competitiveness in the face of Japan and South Korea.

Tsai Lien-sheng, secretary-general of the Chinese National Federation of Industries, said nuclear power is clean energy and should be given a place in Taiwan's energy policy.

The government must clearly say how much of the electricity generated in Taiwan will come from nuclear power, he said.

He emphasized that as long as safety can be guaranteed, construction on the country's Fourth Nuclear Power Plant must be completed as soon as possible.

Environmentalists have been pressing the government to close the existing three nuclear power plants and stop construction on the fourth.

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