Work

Incorporating Carbon Fees into the Efficiency Evaluation of Taiwan’s Steel Industry Using Data Envelopment Analysis with Negative Data

Year: 2025

Type: article

Abstract: Carbon fees are scheduled to be levied in Taiwan, posing unprecedented challenges for the steel industry, given its high emissions and risk of carbon leakage. This study explores the potential impact of this policy on steel industry performance by incorporating projected carbon fees into the efficiency assessment. The Slacks-Based Measure (SBM) and Super SBM models in Data Envelopment Analysis (DEA), which account for negative data, are used to evaluate the operational efficiencies of 30 listed steel firms across supply chain segments in 2024 under baseline and carbon fee scenarios. Results reveal that incorporating the carbon fees mitigates the upward bias that overestimates inefficient firms’ SBM scores, triggers broad efficiency declines and ranking reshuffling (most severe upstream, moderate midstream, and least downstream), and widens cross-firm efficiency dispersion. Moreover, the study finds that excessive carbon fees and operating profit deficiencies are the main input- and output-side drivers of inefficiency, highlighting improvement potential in carbon cost management and profitability gains. To date, the efficiency implications of carbon fees for Taiwan’s steel industry have remained underexplored. Our findings offer empirical insights and a timely reference for steel firms to refine sustainability strategies ahead of forthcoming carbon fees.

Source: Sustainability

DOI: 10.3390/su17188384

Authors: Shih-Heng Yu, Ying-Sin Lin, Jia-Li Zhang, Chia-Shan Hsu, Shu-Min Cheng

Institution: National United University

Language: English

Topic: Efficiency Analysis Using DEA

Subfield: Management Science and Operations Research

Field: Decision Sciences

Domain: Social Sciences

SDGs: Climate action, Responsible consumption and production, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $2,896