Taipei:Business groups have expressed their support for government subsidies aimed at state-run utility Taiwan Power Co. (Taipower) and oil company CPC Corp., Taiwan. The subsidies are intended to help these companies manage the impact of rising international oil, natural gas, and coal costs. This support comes despite opposition from some scholars who argue that the financial burden should not fall on taxpayers.

According to Focus Taiwan, Vice Economics Minister Lai Chien-hsin emphasized the necessity of government intervention during a public hearing of the Legislative Yuan's Economics Committee. Lai noted that since 2020, both companies have been mandated to absorb the increased costs without passing them on to consumers, leading to significant financial losses.

CPC has faced NT$674 billion in untransferred oil and gas costs, culminating in accumulated losses of NT$91 billion by the end of September. Taipower's financial strain is even greater, with losses reaching NT$371.2 billion since 2020 due to elevated natural gas and coal costs. The State-Owned Enterprise Management Act allows the government to compensate for these policy-related losses, and Lai sought legislative backing for a NT$71.1 billion supplementary budget for Taipower.

Support for the subsidies comes from business leaders like Liu Shou-jen of the General Chamber of Commerce, who attributes the losses to global energy price increases rather than company mismanagement. Leu Jang-hwa of the Chinese National Federation of Industries also backs the subsidies, advocating for a transparent review mechanism to ensure only appropriate losses are covered.

However, opposition lawmakers and some academics, such as National Taipei University of Business professor Huang Yao-hui, criticize the subsidies. They attribute Taipower's losses to Taiwan's nuclear-free energy policy, which has increased reliance on costly natural gas. Yeh Tsung-kuang of National Tsing Hua University argues that Taipower and CPC should strengthen their finances independently, rather than relying on public funds.

The debate highlights differing views on the energy policies of the ruling Democratic Progressive Party, which aims to phase out nuclear power and increase natural gas usage to 50% of the electricity mix by 2025. This policy shift, combined with a slower rollout of renewable energy, has led to increased natural gas imports and higher costs, exacerbated by global events such as the COVID-19 recovery, Russia's invasion of Ukraine, and the ongoing conflict with Iran. Opponents of the subsidies suggest that maintaining nuclear power could have mitigated Taiwan's exposure to fossil fuel price volatility.