NDRC: Define Energy Consumption Quotas        

According to an official from the National Development and Reform Commission (NDRC) on June 15th, to enforce the "Energy Conservation Law" recently revised, China will take measures to promote energy conservation and increase the using efficiency of energy. The government will continue to implement policies favorable to energy conservation, promote the reform to energy pricing system and further straighten up the prices of oil products and natural gas at an optimal time.    
   "China will also implement the differential power price policy, urge various localities to withhold power price favors to enterprises with high energy consumption," said the official. "Tax favorable policies will be implemented to encourage imports of advanced technologies and equipment for energy conservation and environmental protection. We will further strengthen credit supports to energy-saving renovation projects, and support enterprises to issue energy-saving corporate bonds."
   The "Energy Conservation Law" revised in October 2007 has been effective since April 1st, 2008. (CCR2008 No. 7)
   China will continue to help local governments to accelerate the establishment of energy conservation supervision agencies in order to unfold law enforcement supervision in respect of energy conservation. Energy conservation inspection activity will be conducted and greater efforts will be made in administrative law enforcement. More severe punishments will be dealt to acts in violation of the "Energy Conservation Law". Criminal responsibilities will be affixed to acts that constitute crimes.
   The "Energy Conservation Law" revised has added the contents concerning energy-saving in construction, communication and transportation, and public institutions. Energy-saving management and standard systems are perfected, including target responsibility, assessment and evaluation and elimination of products, equipment and production processes with high energy consumption.
   Jiang Kejuan, a researcher from the Energy Research Institute of NDRC, said on June 17th that the survey report on energy tax has already been prepared. "The impact of collecting energy tax on the Chinese economy will be ignorable."
   According to Mr. Jiang, the collection of energy tax has a remarkable inhibiting effect on the future energy demand in China. If the tax rate was RMB50 per ton of standard coal, the energy demand would be down by 6.3%. Two factors are considered in the collection of energy tax. One is the promoting role of the import reduction in the economy. The other is the substitution effect caused by the reduction of investments in energy sectors and the increase of investments in some emerging sectors. The GDP loss will be very small. The collection of energy tax will therefore have a positive impact. The GDP growth will basically be affected either.